Netflix, Time Warner, Sony's, and Walt Disney highlighted in Zacks Analyst Blog

Netflix, Time Warner, Sony's, and Walt Disney highlighted in Zacks
                                 Analyst Blog

PR Newswire

CHICAGO, Jan. 17, 2013

CHICAGO, Jan. 17, 2013 /PRNewswire/ announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Netflix (NFLX), Time Warner
(TWX), Sony's (SNE), Inc. (AMZN) and Walt Disney (DIS).


Today, Zacks is promoting Four daily picks are offered free.

Here are highlights from Thursday's Analyst Blog:

Netflix's New Content Deal

Video streaming services provider Netflix (NFLX) recently signed a new content
deal with Turner Broadcasting System and The Warner Bros. Television Group
("WBTVG"), both divisions of Time Warner (TWX).

The partnership will enable Netflix to offer some of the popular Cartoon
Network shows such as Adventure Time, Ben 10, Regular Show, Johnny Bravo and
Warner Bros. Animation's Green Lantern on its "Just For Kids" section starting
from March 30, 2013. "Just for Kids", as the name implies, is targeted at
children aged 12 and under.

Netflix will also stream Adult Swim shows that include Robot Chicken, Aqua
Teen Hunger Force, Sony's (SNE) The Boondocks and WBTVG's Children's Hospital.
In addition to these shows, Netflix subscribers will also be able to access
season 1 and 2 of the critically acclaimed television series Dallas from
January 2014.

The new content deal further strengthens the partnership between Netflix and
Time Warner. Earlier this month, Netflix entered into an agreement with WBTVG
to stream eight current (produced in 2012-2013 season) television shows that
include 'Revolution', 'Political Animals', '666 Park Avenue' 'The Following',
'Longmire', 'Chuck', 'Fringe', and 'The West Wing' in 2014.

The addition of all these popular television shows will not only diversify
Netflix's streaming portfolio but will also strengthen its position in the
video-on-demand ("VOD") market. We believe that the deal would be
incrementally beneficial for the company in attracting new subscribers as well
as retaining the old ones.

Amid increasing competition from streaming providers such as HBO,
Inc. (AMZN), Huluas well as newly launched services from cable and media
companies, Netflix remains focused on boosting its streaming portfolio with
varied content. Apart from recent movies and documentaries, Netflix is also
boosting its original content portfolio.

Netflix's partnerships with leading Hollywood studios and entertainment
companies such as Metro-Goldwyn-Mayer, Twentieth Century Fox, Hasbro studios,
The Weinstein Company ("TWC"), Epix, Walt Disney (DIS) has enabled it to offer
varied content. Through its original television shows, Netflix has been
venturing into different genres like comedy, political thrillers,
autobiographies as well as horror. Netflix is expected to stream five original
series by 2013 end.

The improved content has also driven customer engagement lately. In the
recently concluded third quarter of 2012, the total unique subscribers
(domestic and international) jumped 25.7% year over year to 31.8 million.

Nevertheless, increasing licensing and renewal fees coupled with higher
investment on content delivery network (CDN) development and overseas
expansion will hurt profitability going forward. Netflix needs to pay $5.0
billion for streaming content obligations, out of which $2.1 billion is to be
paid within the next 12 months.

Moreover, when compared to some of its cable and communications peers who have
diversified revenue and cash flow streams, Netflix relies solely on streaming
for future growth as its DVD rental business continues to lose subscribers. We
believe that the streaming market is becoming overcrowded and this will hurt
Netflix's margins going forward.

We remain Neutral on Netflix over the long term (6-12 months). Currently,
Netflix has a Zacks Rank #3 (Hold).

Today, Zacks is promoting Four daily picks are offered free.

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