Streaming giant Netflix Inc NFLX has had many hit shows over the years from “Stranger Things” to “Squid Game” and everything in between.
The company is now looking for more ways to monetize its loyal fans and the success of hit shows similar to other media companies.
What Happened: Netflix ended the second quarter with 238.39 million paid global subscribers and continues to be one of the leading streaming companies worldwide.
While the company gets recurring revenue from subscribers every month and is able to lower churn and keep subscribers thanks to hit shows, Netflix thinks it could monetize its blockbusters better.
A new report from the Wall Street Journal highlights the company’s plan to create experiences and merchandise from hit shows such as “Stranger Things” and “One Piece.”
Plans call for figurines, clothing and more items for “One Piece,” an adaptation of a Japanese manga series and one of Netflix’s newest hit series.
Netflix wants to deepen its fan engagement and also monetize its hit shows and fan bases.
“It’s a way for us to continue a conversation with a fan base that’s really into a show, that really wants to purchase something to show their love for characters,” Netflix Chief Marketing Officer Marian Lee said.
For its “One Piece” merchandise, Netflix partnered with companies such as PacSun, FYE, Bandai and Zara. Products have been in the works for 18 months according to the report.
Along with products, Netflix has also launched experiences that celebrate some of its hit shows. This includes a pop-up restaurant that had chefs make food from hit Netflix shows. Around 40 pop-up fan experiences have been attended by millions of customers since 2021 as well.
Netflix also launched a collection of wedding gowns related to its hit "Bridgerton."
Related Link: Netflix Stock Jumps As Company Contemplates Price Increases
Why It’s Important: Merchandise around hit shows is not new for Netflix. The company has previously released products tied to hit shows such as “Stranger Things” and others.
The biggest difference could be the timing of the released merchandise that puts Netflix on the same level as rival media companies such as Walt Disney Co. DIS.
Instead of waiting to see if a show is a hit and then months afterward for merchandise to be made and hit shelves, Netflix’s new plan could see products released to coincide with a new series or season on the streaming platform.
Toys and consumer products can often lead to more brand awareness. Commercials from companies that make the products can promote an upcoming show or movie for a business such as Disney. The ownership of television, movie and theme park assets alongside Disney+ has helped the company cross-promote its content.
Launching merchandise ahead of time carries more risk for Netflix as it could risk a series or movie being a dud on the platform or not having lasting power.
For Netflix, the trade-off might be worth it as the company missed out on many revenue opportunities along the way.
The report mentioned the hit series “Wednesday” on Netflix. While the series hit strong viewership and went viral, Netflix wasn’t able to capitalize on it, due to not having a plan in place for merchandising and Amazon.com, Inc. AMZN-owned MGM having the rights. Since the show launched, Netflix has partnered with MGM on merchandising.
Instead, fans of the show were left searching for and ultimately buying products based on the series from unofficial collections and third-party sellers.
NFLX Price Action: Netflix shares closed at $376.90 Wednesday versus a 52-week trading range of $211.73 to $485.
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