Netflix Inc: Best in Show

Research evidence excerpt

Netflix Inc: Best in Show

UpdateMthe NFL for example, so not pure play ad-tier number) multiplied by the estimated

average number of people within a household. While Netflix doesn’t disclose the

multiplier, Disney had previously disclosed a global average of 2-3 users per

account, which seems like a decent proxy. They also disclosed that >80% of ads

members are actively watching every week, underscoring a deeply engaged

audience. The audience is also unique with 44% of people who see an ad on Netflix

never seeing it on Broadcast TV or other screens.

Live Events Strategy Enhanced w/ More Eventized NFL: Sports remain a core part

of the Netflix live events strategy and their additional NFL games represent a

deepening of the relationship with the league (bring a younger & more international

audience) around key marquee games (in addition to Xmas games, adding week 1

excitement, Thanksgiving weekend programing and a late season week 18

consequential game), which also provides big moments and engagement around

which they can launch new seasons of big hits (think One Piece after the WBC in

Japan). While sports are one component of the live events strategy, roasts like Kevin

Hart (building upon the success of the Brady Roast) and acquiring the rights to the

Westminster Dog Show create unique must-see moments that also have urgency

and high zeitgeist potential. Within the context of a $20bn cash content budget in

2026 (growing ~10% y/y), we view the acquisition of select sports rights including

several marquee NFL games (likely several hundreds of millions of dollars as the

WSJ has reported $75mn per game in prior deal) as money well spent that will drive

strong engagement & retention.

Trailer Time: The content slate heats up with The Boroughs from the Duffer Bros