Netflix (NASDAQ:NFLX) subscribers got a rare double dose of original content on Friday. Happy Valley -- the British six-episode cop drama that aired earlier this year on BBC One -- became available exclusively to Netflix stateside subscribers. However, the one that investors will want to catch closely is BoJack Horseman.
Unlike Happy Valley or last year's Derek, this isn't a series that is being billed as a Netflix original but has already aired overseas. This is an entirely new show that viewers are experiencing for the first time on the premium streaming service.
This is also Netflix's first foray into adult animation. There are plenty of cult faves out there in the Adult Swim vein, and it's easy to see how that kind of irreverent animated fare could work well on Netflix's unrestricted platform.
There's clearly demand for this kind of content. Browsing through the "Popular on Netflix" section on Netflix finds Archer and Futurama -- and the slightly more commercial but still risk-taking Family Guy and Bob's Burgers -- among the most streamed shows currently on the site. If BoJack Horseman resonates with its target audience it could naturally go a long way to retain the typically fickle and jaded subscribers who are ideal candidates for cancellation. Just to assess the potential here, Cartoon Network's Adult Swim accounted for 18 of the top 50 telecasts on basic cable among adults ages 18-34 for the month of March.
There's also star appeal here. Arrested Development's Will Arnett voices the titular character, a human-like horse that is coping with his irrelevance two decades after starring in a 1990s sit-com. Other celebrities doing voice work include Strangers With Candy's Amy Sedaris and Breaking Bad's Aaron Paul.
BoJack is the New Orange
No one is expecting this to be the next House of Cards or Orange is the New Black, but it comes at a time when Netflix is hitting on all cylinders and a sleeper hit wouldn't hurt that momentum. The stock hit an all-time high on Thursday, and the dot-com darling is coming off another blowout quarter. Revenue soared 37% and profitability skyrocketed 145% with global streaming subscribers topping 50 million worldwide.
A large part of Netflix's success is that this is a scalable business model, and the bigger it gets the harder it is for smaller rivals to try and outspend it. Netflix closed out its latest quarter with $7.7 billion in future streaming content obligations. Amazon.com (NASDAQ:AMZN) has assembled an impressive catalog of third-party content in a short time, but will it ever have enough market penetration to justify that Netlfix-esque kind of contractual commitment?
The disparity makes Netflix even more attractive when it comes to originals. Amazon thought it had a pretty neat idea a little more than a year ago. It put up several pilots for shows that it was considering to bankroll, letting its audience vote for the ones that they wanted to watch. It settled for a pair of sit-coms -- Alpha House and Betas -- that premiered late last year.
Both shows continue to carry positive quality ratings, but Amazon's limited streaming audience relative to Netflix's has resulted in a drought of buzz. That's a bigger problem than you think. If you're a studio with a show to sell are you really going to want to go with Amazon over Netflix as your first choice? Just in case the answer isn't obvious, keep in mind that Netflix originals landed 31 Emmy nominations last month, more than double the 14 nods it received when it first turned heads last year with House of Cards and the Arrested Development revival.
Could a foul-mouthed horse be Netflix's big hit? Viewers will get to decide, and if Netflix stock continues to rise in the coming months, we'll know the answer.