Netflix’s recent decision is expected to bring in more than 1000 hours of original programming, up from 600 in 2016
Netflix, Inc. (NASDAQ:NFLX) was recently reported for gradually trimming its licensed TV shows and movies offerings. According to Yahoo Finance, the company had been doing so for a reason. The report suggests that the streaming service plans on expanding its original content offerings to about 60 shows in calendar year 2017 (CY17), double of what it is offering presently. Despite positive expectations, NFLX shares declined approximately 1.92% during active trading Wednesday.
Yahoo! Finance further cited Forbes report which suggests that the increase in original series offerings will expand binge-watching options for Netflix subscribers. The company’s earnings report for the third quarter of fiscal year 2016 (3QFY16) also mentioned that CY17 will represent as the fifth year of its original content strategy. It is expected to bring in more than 1000 hours of original programming, marking an increase of 83.3% year-over-year (YoY).
According to $338.23 billion company’s press release, “Among those 60 scripted shows will be “Dear White People,” based on the 2014 movie of the same name, and “Ozark,” in which Jason Bateman returns to Netflix for a series that “explores capitalism, family dynamics and survival through the eyes of (anything but) ordinary Americans.” Consequently, Netflix will boost it content budget to $6 billion, up 20% YoY.
The move is expected to prove as a money-saver from the streaming business. This is because it enables the company to move away from costly licensed movies and shows. This justifies Allflicks data that showed that the company has trimmed its selection of shows and movies by a third.
Wall Street analysts have mean price target (PT) of $125.22, implying 0.5% downside potential over last close. Moreover, Netflix’s analysts’ ratings include 21 Buy, three Overweight, 12 Hold, one Underweight, and five Sell.