Netflix contract with Spielberg: blockbuster for stocks?
The streaming service traded without significant fluctuations yesterday. Consider the medium-term impact of this news on Netflix.
The essence of the agreement
Spielberg’s studio will direct several films for Netflix over the next few years. At the same time, the Amblin Partners agreement with Universal Pictures Comcast does not lose its force.
Amblin Partners and Netflix did not disclose financial details and declined to comment on the content.
Steven Spielberg is a legend of the world film industry, director of blockbusters “Jaws,” “Alien,” “Indiana Jones,” “Jurassic Park,” and others; he is also an Oscar winner. For many years Spielberg has held the title of the highest-grossing director: his films in total earned more than $ 10.5 billion at the box office.
There is no word yet on what Spielberg himself will play in creating content for Netflix – the intrigue is that the director is a defender of the traditional film industry, with which streaming services have been in fierce competition in recent years. Netflix can now pay Hollywood stars in royalties, with the company planning to spend $ 17 billion on content this year.
What does this mean for Netflix?
Although Netflix is the leader in the streaming industry with 208 million subscribers, competition has intensified over the past year. Already on the heels of Walt Disney, AT&T with HBO and Amazon, which is buying the film company MGM.
Expanding the library and improving the quality of content is the right decision for Netflix, and the lion’s share of the streaming service’s success depends on it. This strategy will also increase the number of clients. It is because of the smaller-than-expected influx of customers in the first quarter of 2021 that Netflix stock has dropped significantly in value.
Amblin films will not be available until late 2021 at the earliest. New content could further enhance Netflix’s profile, which has won 36 Oscar nominations this year.
Promotions
Since the report’s publication for the first quarter of 2021 at the end of April, Netflix stock has dropped significantly in value. The decline stopped at $ 480; now, the lateral direction continues to form.
On July 20, the company will release its 2Q07 results, expecting to see new customer growth of 1 million, up from 10.09 million last year. KeyBanc Capital Markets analyst Justin Patterson said his company expects Netflix to add only 800,000 new customers and give a weak forecast for the third quarter.
The analyst’s target remained at $ 650 and expects to see more subscribers this year thanks to the release of new films and new seasons of TV series.
Stephen Kahall of Wells Fargo believes the long-term outlook for Netflix is positive. However, in the near term, investors are wary of the company’s stock, influenced by vaccinations and increased competition in the streaming market.
The long-term view is moderately positive – content development can ensure the company’s financial stability, and the Spielberg deal is one of the factors for such success.
Netflix stock is down 8.1% since the beginning of the year and has risen 9.5% over the past 12 months.
