Netflix has been on a steady course of strengthening its content portfolio offerings to fuel its growth momentum, riding on the expansion of its partner base and an escalating subscriber count. Over the past six months, its shares have surged by 28.8%, outshining the Zacks Consumer Discretionary sector’s growth of 3.3%. The upsurge can be attributed to the continuous expansion of its subscriber base, directly fueling its subscription revenues, along with the robustness of its content portfolio and partnerships.
The recent unveiling of a long-term partnership with the World Wrestling Entertainment (WWE) under TKO Group Holdings, Inc. entails the exclusive airing of WWE’s RAW on Netflix every week, commencing January 2025. RAW, a flagship show on the Comcast-owned USA Network, boasts 17.5 million unique viewers annually.
This rights deal, amounting to over $5 billion, extends for a decade and will initially cater to the audiences in the United States, the United Kingdom, Canada, and Latin America.
The collaboration serves as a strategic move for Netflix to amplify its revenues and garner subscribers from the United States and Canada (UCAN) region as well as Latin America (LATAM). In the fourth quarter, the company secured 2.81 million and 2.35 million paid subscribers from the UCAN and LATAM regions, respectively.
For international viewers, Netflix will exclusively broadcast RAW as well as WWE’s other weekly shows such as SmackDown and NXT, premium live events including WrestleMania, SummerSlam, and Royal Rumble, along with documentaries, original series, and upcoming projects in the near term.
The significant long-term commitment to live streaming of RAW marks Netflix’s maiden foray into live events catering to a dedicated, multi-generational fan base of WWE viewers. Live sports present an opportunity for Netflix to retain these viewers who might have otherwise refrained from a Netflix membership post its crackdown on password-sharing.
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
Netflix’s Growing Subscriber Base Fortifying Against Competition
The current Zacks Rank #1 (Strong Buy) company is leveraging its expanding subscriber base and robust content portfolio to drive top-line growth in the near term and defend against competition from rivals like Amazon AMZN and Roku ROKU. Details of today’s Zacks #1 Rank stocks can be accessed here.
Recently, Amazon disclosed its collaboration with Diamond Sports Group, making Prime Video the primary streaming partner for airing the group’s live content, thus providing Prime Video’s users access to live MLB, NBA, and NHL games among others.
Roku also expanded its reach by partnering with Tennis Channel to launch the latter’s second channel, T2, on The Roku Channel, offering free continuous access to live coverage of top tennis players and signature events for its audience exceeding 100 million.
Netflix is poised to introduce a range of sports content on its platform in the near future, including episodes of NASCAR: Full Speed (Season 1), Sunderland ‘Til I Die (Season 3), Formula 1: Drive to Survive (Season 6), Full Swing (Season 2), Tour de France: Unchained (Season 2), and more.
At the conclusion of the fourth quarter, Netflix tallied 260.28 million paid subscribers globally, marking a 12.8% year-over-year upswing. For the initial quarter of 2024, Netflix anticipates a sequential decline in paid net sub additions (reflecting seasonality as well as a possible pull forward from the robust fourth quarter results of 2023) but a year-over-year uptick of 1.8 million.
The Zacks Consensus Estimate for Netflix’s 2024 revenues is estimated at $38.40 billion, signifying a 13.9% year-over-year growth. The consensus mark for earnings has soared by 11 cents over the past 30 days to $16.08 per share.
Netflix remains steadfast in navigating the cutthroat streaming landscape with its robust business strategies, consistently widening its moat and enthralling a burgeoning global audience base.
