Netflix Eyes Indian Market, To Produce Local Original Series
Zacks Investment Research | Jun 05, 2016 10:13PM ET
Netflix Inc (NASDAQ:NFLX) is eyeing expansion in the lucrative Indian market. For the first time, the video streaming giant has partnered with an Indian movie production house, Phantom Films, to produce an original series for the region.
The Hindi-English series will be based on Vikram Chandra’s much-admired novel “Sacred Games”, which explores the dark and gritty world of Mumbai’s organized crime, corruption and politics in the face of an economic resurgence in the country.
Erik Barmack, vice president of international original series at Netflix said "Sacred Games reinforces our commitment to bring the authenticity of local stories to Netflix members across 190 countries worldwide."
Netflix has been producing local original content for different markets as it tries to attract new subscribers, more so as its U.S subscriber base is close to attaining maturity. Netflix has been producing a lot of Spanish original series including the much acclaimed Narcos to attract the Hispanic population both in the U.S. and elsewhere.
To establish itself as a leading content provider across the globe, the company is taking a number of initiatives including the development of more kids and family-oriented content. The company had declared that in 2016 it will be launching as many as 31 original series (including both new and sequels), about eight original feature films and 12 documentaries, 35 original kids series and nine stand-up comedy shows.
On the content acquisition front, Netflix has also expanded its partnership with DreamWorks Animation (NASDAQ:DWA) , which will add to its animation offerings. In May 2016, Netflix announced an exclusive agreement with The Walt Disney Company (NYSE:DIS) to become the exclusive pay TV host of the studio’s newest films as well as that from its Marvel, Lucas Films, and Pixar subsidiaries. Netflix had earlier collaborated with Marvel for its super-hit originals Daredevil and Jessica Jones.
Netflix has built its business by streaming TV shows. Now, it has changed gears in trying to boost the user base. Recently, the company inked a promotional deal with Univision Communications Inc. to broadcast two of its shows on TV just before the series’ new season premiers in a bid to attract more users. Univision Network will broadcast Netflix’s Spanish 10 part original series Narcos ahead of its second season premiere while UniMas will air Club de Cuervos.
Also, Netflix said that it will collaborate with Univision to produce another original series “El Chapo” based on one of the world’s most notorious criminals, Mexican drug lord Joaquin Guzman which will be aired on TV (UniMás in 2017) first and then streamed on Netflix for U.S subscribers.
Developing its own IP (Intellectual Property) is definitely a good move, though it will add to costs. But is it likely to be a long-term growth driver. Even a survey report (Apr 2016) from Morgan Stanley (NYSE:MS) stated that Netflix is gaining momentum in its original content offerings and has already surpassed HBO, which held the top spot in the space The company is expected to air 600 hours of original programming in 2016 compared with 320 hours in 2015.
At present, Netflix has a Zacks Rank #3 (Hold). A better-ranked stock in the broader technology space is Facebook Inc. (NASDAQ:FB) which sports Zacks Rank #1 (Strong Buy).
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