The streaming giant, Netflix (NASDAQ:NFLX), is expected to announce its second quarter performance on Monday; analysts are expecting a lot from the company, and it is also expected to overtake media rivals due to its diverse and developing libraries. The internet television company is also looking to take its rivalry with other companies in this year’s Emmy.
Analysts are strongly leaning on the successful growth in Netflix’s daily subscribers this quarter and the extreme potential the company can have in the future with its bang for the buck content which is also diverse and well thought off; this is the main edge the internet streaming company has with its traditional competitors.
Q2 Expectations
An analyst from Morgan Stanley noted that the streaming company has the potential to double in the next two years or even before the making it to the 2 million mark; it's expected assets are set hit the $11 billion mark by then. Although a massive dent on the company’s earnings is directed to the budget on production and on their content investments.
On a separate research by Morgan Staley’s Ben Swinburne, traditional media outlets such as Time Warner Inc (NYSE:TWX).,Viacom Inc (NASDAQ:VIA), Discovery Communications Inc (NASDAQ:DISCA), AMC Networks Inc (NASDAQ:AMCX), and Scripps Networks Interactive Inc (NASDAQ:SNI)., are hauling a total of $2 to the $4 mark for their $1 content. On the other hand, Netflix only garners a total of $1 of revenue for every $1 worth of content value.
Swinburne’s Notes
Ben Swinburne noted that, “We see meaningful upside to revenues and margins if Netflix improves its content asset turnover ratio towards that of traditional media peers,” and “Netflix has already built an enormous content library and the recent shift towards self-produced original content reflects an investment for the significant global subscriber (and revenue) opportunity still ahead.”
He also said that “There is no guarantee that Netflix can ever monetize its content with as high a rate of return as traditional TV networks have historically,” and “However, these admittedly imperfect comps point to the potential for materially higher earnings power than the market appreciates today.
Netflix vs. HBO
This year’s Emmy will be featuring the best of HBO and Netflix; both companies will be putting their top tier contents on the line. This would make a clear grasp on the competition between internet streaming and traditional media, all series and contents are looking promising this year and this could be a possible boost for Netflix’s publicity if their contents win some awards.