Netflix Is Short a Dolly

Netflix lands another piece of original content.

Mar 20, 2014 at 12:38PM

There's more original content coming to Netflix (NASDAQ:NFLX).

The leading video streaming service announced yesterday that Grace and Frankie -- a sitcom starring Jane Fonda and Lily Tomlin with Friends creator Marta Kaufman on board as one of the writers and creators -- will be coming exclusively to its digital vault. The 13 half-hour episodes of the show's first season will debut next year.

Teaming up two-thirds of the trio from the campy 9 to 5 movie seems like a genius casting call. Dolly Parton's agent should be making phone calls about now. Naturally, casting Fonda can be polarizing. The top comments on Netflix's Facebook post are "Hanoi Jane" related with some calls for boycotting Netflix or joining rival platforms.

Netflix will be fine, of course. The very concept of building out a library of exclusive first-run content is that it can appeal to all tastes. House of Cards and serialized dramas may be the service's bread and butter, but Netflix has already dabbled in dark comedies, including Derek and Orange Is the New Black. There was also last year's Arrested Development revival.   

In other words, Netflix doesn't really have to worry about the vocal yet likely limited dissent.

It's hard to fault anything that Netflix has been doing these days. It was the hottest S&P 500 stock last year, and it's crushing the market again so far in 2014. Subscriber growth is on a tear, and its closest competitor -- (NASDAQ:AMZN) -- is boosting its plan's price. Today is the day when Amazon Prime's increase from $79 a year to $99 a year kicks in.

Naysayers have argued that Netflix's growth has come at the expense of its profitability, and that has certainly been true in the past. Netflix invested heavily in streaming content and accepted losses overseas for the sake of brisk international expansion. It's all starting to come together now on the bottom line. Analysts see earnings more than doubling this year and soaring another 82% come 2015.

In the big scheme of things, Grace and Frankie is just another show in Netflix's growing digital library. Whether it stirs up nostalgia the way that Arrested Development did, buzz the way that Orange Is the New Black did, or controversy the way that Derek did, the point is that it ultimately gives some subscribers something more to watch.

When the time comes for Netflix to follow Amazon Prime and increase its rate -- and that will happen -- consumers will have to understand that they are paying more because they're getting more.

Get more out of this top stock
There’s a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it’s one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of and 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.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information