Netflix is undeniably king when it comes to the streaming video game, and even its closest competitors are nowhere near catching up. In fact, Netflix has so much appeal that Apple is reportedly considering shelling out big bucks to buy it. Now we know that Apple isn't the only party excited. As it turns out, Wall Street is super psyched about Netflix right about now as well. Here's what's happening.
Wall Street firm Macquarie Research has raised its rating for Netflix shares due to the success of the strategy of producing and releasing so much original content, which indicates that all Netflix's investments in originals is actually paying off. In a note to clients this week, Macquarie Research analyst Tim Nollen described Netflix as "miles ahead" with regard to original content quality, viewing time, and programming hours. The dominance in the streaming game isn't expected to change, which means that investing in Netflix could be a very good move for folks on Wall Street.
Shares of Netflix rose by 1.5% in the premarket session on January 2, according to CNBC, and the target price for shares increased to $220 from Friday's $200, marking a 15% boost. Additionally, Netflix's overall stock rose by 55% in 2017. Macquarie Research goes on to predict that Netflix's original content will increase to 60% in 2020, while only approximately 25% of Netflix's content in 2017 was original. While the originals have already cost Netflix a huge chunk of change, there's a big silver lining for investors. All the original programming means that Netflix will have fewer licensing fees to pay, which could result in a savings of $2 billion.
If those reasons weren't enough to justify investment in Netflix for Wall Street buyers, Tim Nollen has more. Netflix has been working to expand distribution relationships on an international scale, and efforts are being taken to develop offerings of local content in different markets all over the world. Additionally, Netflix is reportedly looking into finding ways to reduce password-sharing, which has begun to alarm streaming services and digital cable providers. Some companies are reportedly more concerned about password-sharing than others, and it makes sense that the idea of Netflix cracking down sounds pretty good to Wall Street.
Of course, given consumers' growing frustration with commercials, other companies are expanding into streaming services, including Disney and DC Comics. While DC's direct-to-consumer streaming service is intended to be up and ready to go by the end of 2018, Disney's service is still a couple of years away and may not threaten Netflix. All things considered, we shouldn't worry about Netflix right about now. We can really only cross our fingers that Netflix doesn't start raising its price to subscribers again.
For what you can watch on Netflix nowadays and in the coming weeks, take a look at our 2018 Netflix premiere guide. If streaming isn't always your style, swing by our midseason TV premiere schedule for your options on cable and broadcast TV. Be sure to stay tuned to CinemaBlend for the latest in TV and movie news, and take a listen to the latest episode of the Cord Cutter Podcast for debate about Netflix's recent Bright.
