Netflix to Stream Show Based on Mattel's Ever After High

Zacks Equity Research

Netflix Inc (NFLX) recently announced that it plans to launch a new animated series for kids based on the Mattel (MAT) franchise Ever After High. The new show will be streamed on Netflix in early 2015.

Ever After High is a web series and a fashion doll franchise, which was launched by Mattel in Jul 2013. However, in the Netflix series, the characters will be based upon characters from fairy tales.

Netflix recognizes the fact that kids make up a significant chunk of TV show and film viewers. To capitalize on this, the company had launched its exclusive Internet video streaming service, Just For Kids way back in 2011.

Per Netflix, the highly engaging storylines of Ever After High with new twists to the plot and new characters will be quite entertaining. We believe that this move will not only boost its kids’ portfolio but will also provide it an edge in this space over competitors like (AMZN) and Hulu.

Netflix recently partnered with the Scholastic Media to launch the streaming of a new original TV series based on the iconic TV show The Magic School Bus. The new show would be titled The Magic School Bus 360 degrees

Over the last one year, Netflix has entered into partnerships with major film studios and production houses like The Wachowskis (creators of The Matrix trilogy), J. Michael Straczynski (Babylon 5), Gaumont International, Sony Pictures and The Weinstein Company (TWC), apart from Walt Disney (DIS) and Dreamworks.

These deals have helped Netflix to not only grow its content portfolio but also to move into new segments such as comedy, political thrillers, autobiographies and horror.

This has been the primary reason behind its success in the recent times. Netflix added 11.89 million paid streaming subscribers over the last 12 months. Its total streaming subscriber base increased 12.04 million year over year to 48.36 million, primarily driven by its expanding content portfolio that includes original and popular productions such as Arrested Development and House of Cards.  

International expansion is another key growth driver for Netflix. The company recently announced its plans to enter Germany, Austria, Switzerland, France, Belgium and Luxembourg by the end of 2014.

However, starting operations in a new country demands huge investments and increases marketing and general and administrative expenses considerably. Netflix, therefore, expects the international segment to continue to report a loss for the rest of 2014.

Nevertheless, Netflix’s recent price increases (for both domestic and international new users) will help the company to offset these higher expenses. Moreover, the company’s ever-expanding content portfolio and focus on improving customer engagement will continue to boost subscriber base.

Currently, Netflix has a Zacks Rank # 3 (Hold).

Read the Full Research Report on AMZN
Read the Full Research Report on NFLX
Read the Full Research Report on MAT
Read the Full Research Report on DIS

Zacks Investment Research