Streaming giant Netflix (NFLX), generally speaking, does not care much about movie theaters. Netflix is a streaming platform, and the leader in the field. But there are some signs that Netflix is reconsidering the notion of theatrical releases beyond the occasional one-off for promotion and awards consideration. And this potential growth vector is catching a lot of investor attention. Netflix shares were up nearly 2% in the closing minutes of Monday afternoon’s trading.
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One of the first signs that something was up was when Zach Cregger—a member of the comedy troupe The Whitest Kids U’ Know, who moved on to be a successful director—got a visit from Netflix’s head of film, Dan Lin. Lin wanted to know if Cregger would be interested in bringing his upcoming film, The Flood, to Netflix. Cregger was willing, but wanted a theatrical installment. Netflix demurred, and now, The Flood is quietly in limbo as it was developed as part of Amblin Entertainment’s deal with Netflix.
But with Netflix bringing out more theatrical titles, and eyeing a possible deal to buy Warner Bros. Discovery (WBD), it may have to expand its business model to accommodate streaming titles. While the logic is sound—Netflix is streaming first, which means a lot of platform exclusives to draw value—theatrical releases mean big money, even by Netflix’s standards. And with Netflix losing talent to studios who will go after the box office, that may be enough to prompt a change.
Avatar Ending
Meanwhile, there is some good news for Avatar: The Last Airbender fans. Netflix’s series is coming to an end after its third season, and the last season just finished filming. Both of the last two seasons are in post-production, which means new episodes, and ultimately a conclusion, should be arriving soon.
Christine Boylan, executive producer and writer on the series, noted, “When we started working on Season 2 we gathered three forces: integrity, hope, and joy. And here we are almost three years later wrapping the end of production with an immensely talented and devoted team that met those ideals and exceeded them. I am eternally grateful to be part of this important, hilarious, action-packed team who is bringing this epic live action story to the world.”
Is Netflix Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 26 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 37.03% rally in its share price over the past year, the average NFLX price target of $1,399 per share implies 24.83% upside potential.
