A detailed look at content cost expectations
We have taken a detailed look at Netflix programming costs and, in particular, self-produced content which now represents a $4bn asset on the balance sheet and which will be a major driver of content costs as this is amortised over the next few years. Our analysis shows that cash content cost growth from here can be relatively muted, implying 2018 could be the peak year for FCF losses which we believe could be a positive catalyst for the stock.Netflix is engaged in subscription streaming entertainment service including TV series, documentaries and feature films across a variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, without commercials. Additionally, several members in the United States subscribe to the company's DVD-by-mail service. The company improves its streaming content with a focus on a programming mix of content. The company's members can download a selection of titles for offline viewing. The company operates its business as a global operating segment.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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