The Striking Deal That Proves Netflix, Inc.'s Staying Power

Comcast strikes deals to bring "House of Cards" and "Orange Is the New Black" to Xfinity.

Mar 18, 2014 at 6:08PM

Forget about betting against Netflix (NASDAQ:NFLX), Fool. Even the streaming sensation's fiercest rivals are taking to the service in ways we'd never have considered just a few years ago.

Count Comcast (NASDAQ:CMCSA) among the latest to jump on the Netflix bandwagon. According to Variety, the company inked a deal with Sony (NYSE:SNE) to sell the first season of House of Cards to Xfinity subscribers. Sony holds international and home video distribution rights to the series, which was partially funded through Media Rights Capital.

Comcast is also buying early access to certain Sony films, including American Hustle and Captain Phillips. Other TV and film properties to be available via Xfinity include The Amazing Spider-Man, Breaking Bad, and Cloudy With a Chance of Meatballs 2.

House Of Cards

Kevin Spacey's Frank Underwood gets his way again. This time, with Comcast. Source: Netflix.

The undeniable influence of excellent TV
Yet it's the Netflix-branded content that makes the agreement so interesting, especially when you consider it's not the only time Comcast has gone shopping for shows originating on the streaming service.

Variety says Comcast has also acquired rebroadcast rights to Orange Is the New Black via Netflix distribution partner Lions Gate Entertainment (NYSE:LGF). Xfinity subscribers will be able to purchase single episodes in May. House of Cards arrives mid-April, CNET has confirmed.

Can investors expect the new Xfinity Store to have an impact? Not if history serves. Cable communications still provides an overwhelming share of company profits, and at a healthy 25% margin. Efforts to experiment and diversify are funded almost entirely by Comcast's core business.

Once more proving irony never disappoints
Even so, the company deserves credit for helping bring a better menu of programming to broadcast TV subsidiary NBCUniversal. Consider The Blacklist, which has delivered strong ratings all season while earning James Spader a Golden Globe nomination for best actor in a drama series. Yet, ironically, it's Netflix -- the upstart it once panned -- that Comcast turns to for help completing the Xfinity programming picture.

"What used to be called 'reruns' on television is now called Netflix. We're not seeing it cut into our core business, but we are glad as a producer of content to see the value of that content rising," Comcast CEO Brian Roberts said three years ago in a wide-ranging interview with The Wall Street Journal.

Famous last words, Mr. Roberts. In licensing Netflix content, you've only firmed up Xfinity's status as the sort of "rerun TV" you once accused Netflix of offering. Here's hoping you'll at least profit from the about-face.

Master your future
Plenty of viewers know that House of Cards and Orange Is the New Black are hit shows that make plenty of money, but very few investors know how to properly translate the big audiences into profits for their portfolio. Check out The Motley Fool's free guide for new investors to figure out how to pick better media stocks based on rising ratings of their favorite hit shows.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Netflix at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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