Netflix Signs Deal with Chelsea Handler - Analyst Blog

Netflix Inc. NFLX recently signed a deal with renowned comedian and actress, Chelsea Handler to create a new talk show slated for launch in 2016. However, the show has not been named yet and there has been no confirmation on when it will be streamed.

Chelsea Handler is a renowned comedian, actress, author, television anchor and producer of American origin. Currently, she hosts a late night talk show called “Chelsea Lately” on E! Network, which is scheduled to end on Aug 26, 2014.

This new talk show is believed to have an updated format and will feature Chelsea's unfiltered opinions on all topical entertainment as well as cultural issues. Moreover, it will also include guest interviews conducted by Chelsea.

The deal also includes a stand-up special along with four docu-comedy specials, all featuring Chelsea. All of these will be exclusively streamed by Netflix.

Meanwhile, with an intention to expand in the international arena, Netflix has been holding negotiations with the Deutsche Telekom AG (DTEGY) for a probable marketing alliance. Reportedly, Netflix has been holding negotiations with other German telecom companies as well.

Moreover, Netflix has recently revived “The Killing” for a final season comprising six episodes. This is not the first time that the company is reviving a series that met an untimely end. The company also helped revive Emmy Award winner show Arrested Development.

Over the last one year, Netflix has entered into partnerships with major film studios and production houses like The Wachowskis (creators of The Matrix trilogy), J. Michael Straczynski (Babylon 5), Gaumont International, Sony Pictures and The Weinstein Company TWC, apart from Walt Disney DIS, Dreamworks and Mattel.
    
These deals have helped Netflix to not only grow its content portfolio but also to move into new segments such as comedy, political thrillers, autobiographies and horror. The company's diversified offerings help it to stand out among other content streaming providers such as Amazon AMZN, HBO and Hulu.

This has been the primary reason behind its success in the recent times. Netflix added 11.89 million paid streaming subscribers over the last 12 months. Its total streaming subscriber base increased 12.04 million year over year to 48.36 million, primarily driven by its expanding content portfolio that includes original and popular productions such as Arrested Development and House of Cards.  

Rising content cost and increase in expenditure on account of international expansion remain near-term headwinds.

Nevertheless, Netflix's recent price increases (for both domestic and international new users) will help the company to offset these higher expenses. Moreover, the company's ever-expanding content portfolio and focus on improving customer engagement will continue to boost subscriber base.

Currently, Netflix has a Zacks Rank #3 (Hold).