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Netflix Testing Button to Let Users Skip Opening Credits

Zacks Equity Research

Netflix, Inc. NFLX on Friday took yet another step to enhance viewers' experience. The company announced that it was testing a button that will enable users to skip the introductory credits on selected TV shows. This button will appear on the title of the show and display “skip intro”.

Netflix spokesperson said that the company is testing this function as part of several A-B tests it conducts every year. Per media reports, it is yet to be available across all media platforms and presently accessible by viewers using computers.     

This option comes as a relief for viewers who dislike watching the opening credits repeatedly. Notably, skipping the credits will save time and allow users to concentrate on the main part of the show.

Reportedly, popular television shows like House of Cards, Iron Fist and Mad Men are available with this option.

Along with this move, Netflix has decided to do away with the five-star rating system. Instead there will be a either thumbs up or thumbs down option to rate the content on Netflix.

It can be inferred that Netflix is desperate to gain competitive advantage over its competitors such as Amazon AMZN Prime, YouTube and Hulu plus and this move will surely attract more viewers.

We note that Netflix has outperformed the Zacks Broadcasting-Radio/TV industry in the last one year. While the stock gained 43.6%, the industry returned 16.6%. The upside can be attributed to the company’s continuing subscriber growth and expanding original content product portfolio. The addition of new and user friendly viewing options can also be another reason for this growth.

We note that the company’s continuing focus on international expansion is driving its top line, providing competitive leverage against the likes of Amazon Prime. In the latest quarter, Netflix added 5.12 million international subscribers and anticipates adding another 3.70 million in first-quarter 2017.

Currently Netflix carries a Zacks Rank #3 (Hold).

Key Picks

Two better-ranked stocks in the broader technology space include ITV Plc ITVPY and Grupo Televisa TV. Both have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Long-term earnings growth rates for ITV and Grupo are currently pegged at 3.5% and 17.08%, respectively.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
Grupo Televisa S.A. (TV): Free Stock Analysis Report
ITV PLC. (ITVPY): Free Stock Analysis Report
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