Netflix, Inc. (NFLX): Is The Company’s Newest Show a Bomb?

With Netflix, Arrested Development has really found a perfect match. Its jokes, which rely on having viewers follow a plot line that expands out across several episodes, are perfect for the binge-viewing that Netflix encourages by releasing entire seasons at once. Also, its loyal — and already existing — built-in fan base has plenty of other similar viewing options, as Netflix has a wealth of comedic programming.

While Hemlock Grove looked risky from the start, Arrested Development has all the signs of being a major winner for Netflix original programming.

Original programming: a gamble worth taking
In the end, original programming looks like a savvy move for Netflix even if some series don’t realize their full potential. The company is filling out different genres, which will give it a catalog that appeals to a wide audience. Future series involve science-fiction fare Sense8 and programming for children.

Original programming offers a few key differentiators for the company:

Licensing content from premium channels has either been impossible (such as from HBO, which is relying on its own HBO Go platform) or prohibitively expensive (such as when Netflix didn’t renew its deal with Starz). Creating its own content allows Netflix to have a library of content that can compete with HBO and other premium channels.

One of the trickiest issues in licensing content is that deals must be struck country by country. That makes international expansion, where Netflix sees much of its future growth, a tricky issue. However, if HBO owns the programming, it allows it to fill out a library much more rapidly in countries it’s expanding to.

Finally, Netflix, Inc. (NASDAQ:NFLX) is purely an “always connected” service right now. With original programming, this could allow some content to be downloaded to a device when Internet connections aren’t available. This may seem trivial, but consider that Spotify has gained quite a bit of popularity, in part because it can make music available for offline viewing. If you’re a business traveler who’s ever had to deal with spotty Wi-Fi connections in airports and hotels, you know the value of offline viewing.

While early signs for Hemlock Grove look mixed, the future of Netflix’s original programming looks bright. After a couple of years of seemingly doing no right, the company is making moves that strategically make a lot of sense.

The article Is Netflix’s Newest Show a Bomb? originally appeared on Fool.com.

Eric Bleeker, CFA, has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Netflix.

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