The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary:

• Netflix will likely lose more Disney and Marvel-licensed TV series and movies.
• The upcoming launch of Disney+ requires Netflix to find other third-party content providers for its streaming business.
• Warner Bros and DC Comics are white knights that can help Netflix survive the loss of Disney and Marvel-licensed shows.
• Netflix can spend billions of dollars on original content but it can never match the long-term pull of Marvel or DC superheroes-themed movies and shows.
• Netflix still needs globally-famous third-party licensed shows to attract more international subscribers.

No amount of money can help Netflix (NFLX) produce original content that can match the appeal of Marvel-licensed shows. More Marvel-themed shows at Netflix are not getting renewed because The Walt Disney Company (DIS) is building its own Disney+ paid streaming service. Disney+ is expected to launch later this year. It was already reported two years ago that Disney won’t be renewing its licensing deal with Netflix by 2019.

Losing Disney and Marvel-licensed TV shows and movies can likely derail Netflix’s amazing subscriber growth since 2013. From only 44.13 million global subscribers in Q4 2013, Netflix ended Q4 2018 with more than 148 million subscribers. Nobody can deny it that Disney-owned assets/intellectual property (inclusive of Marvel and Star Wars shows) helped propel the subscriber growth of Netflix.

(Source: Statista)

It was therefore a great relief that Time Warner (TWX) allowed Netflix to license DC Universe-themed TV shows. Aside from DC Comics’ Black Lightning TV series, Netflix also landed the international rights to stream Titans – a DC Universe superhero dark drama.

Time Warner & DC Universe Can Replace Disney And Marvel Shows

My takeaway is that Warner’s massive movie library (and new releases) can compensate for Disney’s foretold abandonment of the Netflix platform. DC Universe superheroes-themed TV shows can also replace the upcoming death of Marvel-licensed shows on Netflix. DC Universe-licensed Netflix shows Black Lightning and Titans are getting rave reviews and loyal followers (that includes me). Yes, sir, Titans is now also available for us, Netflix Philippines subscribers.

(Source: Netflix)

I suspect that Netflix found DC Comics as easier to deal with when it comes to international streaming rights. Time Warner (parent company of DC Comics) is likely amiable to charging lower international streaming licensing fees. Like it or not, DC Comics touts cult-hit superheroes and villains who can equal the global popularity of Marvel characters. Batman, Superman, Robin, The Joker, Aquaman, and Wonder Woman has decades-long track record of having hit TV shows and movies.

Time Warner has streaming services but it realized that working with Netflix is more profitable than going all-out against it. Netflix has almost 150 million subscribers. People in America could afford two or more monthly streaming services. However, most customers in other countries will likely ignore Warner’s WB Movies All Access and DC Universe paid streaming services because they can only afford Netflix’s $6-$10 monthly plan.

Unlike Disney’s managers, Time Warner’s management believes licensing their movies and DC Comics intellectual property is the best way to monetize from non-US paid streaming customers. Netflix is undisputedly the best and most successful global streaming platform right now.

My long-term view is that Time Warner will compete with Netflix in the U.S. However, Time Warner will continue to collaborate with Netflix when it comes to other countries. Going forward, it might be cheaper for Netflix to just license other companies TV shows and movies rather than spending $13 billion+++/year on producing original shows.

Time Warner’s eager helping hand is likely the reason why Netflix’s stock just keeps soaring in spite of the Disney threat. NFLX now touts a year-to-date return of +31.42%. I still rate it as a buy. My fearless Netflix stock forecast is that the amazing reception of Black Lightning and Titans on the Netflix platform will likely compel DC Comics to develop and produce more TV shows based on its roster of superheroes.

(Source: YTDreturn.com)

Conclusion

My fearless Netflix stock forecast is that it will continue to prosper even without licensing Disney and Marvel intellectual properties. Netflix is already too big to fail. Further, Time Warner and DC Comics both tout a rich trove of globally famous heroes and movies. They can help Netflix attract and retain the loyalty of more international customers.

Netflix needs to keep attracting long-term subscribers so it can finance its super-high annual budget ($13 billion last year) for producing original movies and TV shows. Licensing other companies’ content so it can attract more international subscribers is a legitimate move. Netflix’s revenue growth rate is already slowing down. It cannot afford to slow down its strategy of attracting more subscribers outside the U.S.

As you can see from the chart below, Netflix’s quarterly revenue y/y growth rate is now less than 30%. It could only mean that losing Disney movies and Marvel shows can further handicap Netflix’s growth. It’s a good thing that Time Warner and DC Comics are still willing to license their intellectual properties to Netflix.

My buy endorsement for NFLX is also due its super bullish one-year algorithmic market trend forecast from I Know First. NFLX’s 12-month forecast is 483.76, almost 5x the score of 100 (buy signal).

Technical indicators and moving averages are also screaming NFLX as a buy. We should be not be deaf when opportunity is knocking at our doors.

(Source: investing.com)

Past I Know First Success with Netflix Stock Forecast

I Know First has been bullish on Netflix stock forecast in the past. On August 8, 2017 the I Know First algorithm issued a bullish 1 year Netflix stock forecast with a signal of 44.54 and a predictability of 0.45, the algorithm successfully forecasted the movement of the NFLX share. After a year, NFLX shares rose by 93.53% in line with the I Know First algorithm’s forecast. See chart below:

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Please note-for trading decisions use the most recent forecast.