Netflix (NASDAQ:NFLX) airs a handful of original shows, including Emmy winner House of Cards and future awards favorite Orange Is the New Black. But the streaming video veteran doesn't actually produce these shows in-house, preferring to farm that work out to specialists in the field.
Many Netflix skeptics see this outsourcing model as a sign of weakness, doomed to long-term failure. But is that really true?
In the video below, Fool contributor Anders Bylund explains how AMC Networks (NASDAQ:AMCX) and Time Warner's (NYSE:TWX) HBO actually follow the same model in many cases. Lions Gate (NYSE:LGF-A) and Sony (NYSE:SNE) may not own any American distribution networks, but they're more than happy to create high-quality content like Breaking Bad or Mad Men for others to distribute. Netflix simply follows a tried-and-true industry practice here.
The Motley Fool recommends AMC Networks and 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.
More from The Motley Fool
Netflix Earnings: What to Watch
Can Netflix convince investors it can maintain strong momentum in 2018?
Could Netflix Produce Disney-Sized Revenue Someday?
At least one analyst thinks so and predicts Netflix will rank second in the next three to five years.
3 Stocks for Baby Boomers to Reach Their Goals
Investors looking to achieve financial targets for retirement should consider these timely opportunities.