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These are the three most important shows for Netflix: Analyst

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Nat Schindler, Bank of America Senior Internet, Digital Media Analyst joins Yahoo Finance’s Alexandra Canal and the Yahoo Finance Live panel to discuss the latest news from Netflix.

Video Transcript

ZACK GUZMAN: Well, if you're like me, you might be overwhelmed with all the streaming options out there. And when one kind of gets stale with the content, you might look towards canceling, moving over to another. So how important are those tent poles for each platform? Our next guest says rather important, especially when you're focusing on Netflix and what they have coming out next year in terms of new seasons of some of my favorites-- don't know if your favorites are the same-- but "Stranger Things" coming out.

And for more on what it means for the streaming wars, happy to bring on our next guest, Nat Schindler here, Bank of America Senior Internet Digital Media Analyst joins us, alongside Yahoo Finance's Alexandra Canal in the discussion. And Nat, your note kind of walks through the bumps that we see for Netflix subscribers when they do have new content in those major releases. Talk to me about what people should be expecting for what it means on the subscriber front.

NAT SCHINDLER: Well, I want to be careful to say it's not necessarily on subscribers. It's definitely on app downloads and usage that when you see some of these tent pole titles, whether it's "Stranger Things"-- everybody talks about "The Witcher"-- "Lucifer," "Ozarks," "Cobra Kai," a lot of these titles bring in people into usage and into app downloads. Probably relates to subscribers as well. But it is difficult to prove that from the data.

ALEXANDRA CANAL: And Nat, I'm very excited for a lot of that second slate content coming out for Netflix. "Sex Education," "You" being some of the many shows that I'm excited to watch. And "You" is an interesting story because it first debuted on Lifetime, but really didn't see that pop until it came over to Netflix, thus leading to all of those additional seasons.

And we are seeing a similar story play out with "Manifest." That was on NBC. NBC canceled that series. Fans freaked out. Netflix stepped in, and now they will be producing and releasing one final last season for "Manifest." So it seems like Netflix is this redemptive character in a world of bad, evil cable providers. So what do you think this all says when it comes to the future of cable, especially [INAUDIBLE] more in tune with where consumers are and have a better way of pushing out and elevating that content?

NAT SCHINDLER: Well, I think it goes to the ability of a asynchronous streaming platform that makes its money from subscriptions is just much easier for it to monetize content. So a show like "Manifest" or even shows that were quite popular on Fox, like "Lucifer" at one point, they can falter. And if they lose audience at that time, they can't generate the ad dollars to pay for the show, so they have to be canceled. Or they can't justify the usage of that slot. Well, there are no slots on Netflix. And if the dollars can justify it from bringing in subscribers, then it's worth it to them.

So they can bring back shows that are real crowd favorites. And they can actually get them to a much bigger distribution. At this point, most TV networks have a fraction of the usage-- or actually, all TV networks have a fraction of the viewership that Netflix has. So, you can expand the value of any piece of content by shifting it off of NBC, CBS, Fox, ABC, and moving it onto Netflix. And plus, it goes into global distribution as opposed to just the US.

AKIKO FUJITA: And Nat, I wonder if you can speak to the competitive landscape here. When we're were talking about shows on Netflix that have been around for years now, especially if you think about something like "Stranger Things," what other streaming service has that kind of franchise that can continue to keep people coming back to the service?

NAT SCHINDLER: Well, clearly, that's what Disney has. That's Disney's value, is its franchises. Disney isn't really making content that isn't franchises. That's what they do. They're driving their entire use case based on "Star Wars" and Marvel and Disney princesses. And those are powerful, and I don't doubt that.

But I really want to push back on this phrase, "competition." I've always thought that's interesting. Everybody seems to think that, that the streaming networks compete. And I guess, in a sense, they do. But in reality, to a consumer, consumers don't watch networks. They don't subscribe to, I need a streaming service this month, so I should get a-- because I hear they're important to have streaming services. No, they want to watch shows.

So what matters is whether-- what content is on a network. They want to watch "Stranger Things," they have to watch it on Netflix. There is no other option. They want to watch "Wanda Vision," they have to watch it on Disney. And that's all there is. The difference between Netflix and the other streaming services really comes down into the amount of content they release and how broad they can get.

Netflix is going-- trying to be that platform that has something for everybody. Disney isn't trying to be that. They have their family targeted. They have some of their tentpole "Star Wars" and Marvel. And that's about it. You're not going to see "The Crown" style content on Disney.

ALEXANDRA CANAL: And Nat, you bring up an interesting point that it is really all about the shows. But we are seeing Netflix getting into video games. They have the Netflix shop, where viewers can go and buy merch from some of their favorite shows. But one of the things that was always unique about Netflix and, say, at Disney Plus, is that streaming was the only thing that they were focused on. Do you think as they introduce these other ancillary businesses, it's going to impact that focus that has gotten them to where they are today?

NAT SCHINDLER: Oh, count me as one of the guys who's very skeptical on this over belief in these new businesses. I have-- when they came out with their big talk about moving into gaming, they caveated and said that mobile gaming about their current content. This is marketing, as is the Netflix shop. They're not going to make a lot of money, anything that really moves the needle, selling "Stranger Things" merch. But that merchandise might get people excited about "Stranger Things" and thus subscribe to Netflix.

So I find all these things just fairly interesting marketing ideas. Until-- especially on gaming, until I see them really stepping up to the console wars or stepping in with really big, expensive hit games on the "Call of Duty" level, I don't see them really in gaming. They're in marketing of their titles with games.

ZACK GUZMAN: Yeah, it all goes back to streaming, much like Amazon and all going back to signing up for Prime, too. I mean, that's another kind of way to think about it, I suppose. But Nat Schindler, Bank of America senior internet digital media analyst joining us here today, alongside Yahoo Finance's Allie Canal, appreciate you both for the conversation. I will anxiously await the return of "Stranger Things."