Netflix, Inc. (NASDAQ:NFLX) is deciding to buck the trend into live sports that competitor Amazon.com, Inc. (NASDAQ:AMZN) is making, the company said in its Q1 earnings release on Monday afternoon. In the report, which was accompanied by a 1.4 rally after the bell, Netflix said they will continue to aggressively grow their original content, which includes shows like Stranger Things, Narcos, and House of Cards, by continuing to plan about $2 billion in negative free cash for this year.
According to noted entrepreneur Mark Cuban, this strategy will help the company by giving them the opportunity to create longer shelf lifes for their shows. Cuban tells Benzinga that with given the amount of content the company has, they will be able to "remarket some of it to traditional distribution channels in the future."
When asked why Netflix wouldn't compete with Amazon—which recently outbid Twitter Inc (NYSE:TWTR), Facebook Inc (NASDAQ:FB), and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) for live NFL content—Cuban said the company doesn't have enough subscribers yet. But he added that it wouldn't be long until the cost per sub for live will be negligible for Netflix.
"It won't be long until the cost per sub for live [events] will be negligible," he said in an email. "I think they will realize that live drives people to the service as subscribers and expands the number of hours consumed."
As for the type of live events he sees Netflix potentially getting into, the Dallas Mavericks owner told Benzinga "Sports last."
Amazon and Netflix are Cuban's two largest as of February 17th.
Netflix shares initially responded negatively to Netflix's Q1 earnings report, trading as low as $139.65 after hours. Once the street had a chance to digest the information, shares began to erase those losses, trading up 1.36% at $149.46.
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