Netflix Taps Into The Superhero Movie Market With Latest Acquisition, Plus Cord-Cutters Beware

by 4 months ago

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“Well y’all – it’s been a great run, but the time has come. @Kingsford #Sponsored” Apparently, NFL player Vince Wilfork likes ribs more than we do…enough for Kingsford Charcoal to sponsor his retirement Twitter post. Big man’s gotta eat.

Market Snapshot

  • The Dow finished higher, extending its hot streak to ten straight days.
  • The S&P and Nasdaq ended up after a strong rally in tech.
  • The pound fell to a ten-month low against the euro.
  • Bitcoin hit a record high—it’s worth nearly three times the price of gold.

Netflix, the Mutant Streaming Service

To all aspiring crime-fighters: you don’t need to be bitten by a spider to develop superhero powers.

Just go out and buy them.

Netflix (+.59%) did just that with its first ever acquisition, purchasing comic book production company Millarworld. KAPOW!!!

Millarworld belongs to Mark Millar, a hotshot comic book producer, and his wife Lucy. Mark’s power is the genetically-engineered brain (well, probably) behind the popular film franchises Kingsman, Kick-Ass and Wanted, which have collectively earned nearly $1 billion at the box office.

So why take his talents elsewhere?

Millar called Netflix “the future,” and it’s easy to see why—Netflix has shown it can successfully bring Marvel characters to the small screen with a strong lineup of Daredevil, Jessica Jones and Luke Cage.

But, what’s really got Millar breaking out the cape? Netflix recently surpassed 100 million subscribers and nearly doubled its stock price in the past year. There’s big potential here.

Okay…what’s in it for Netflix?

We may be living in a time when you can order Chinese food from your watch, but that hasn’t stopped old-fashioned comic books from roaring back into pop culture.

Look no further than Marvel (Millar’s previous employer), which was acquired by Disney (-1.24%) in 2009 for $4.2 billion. Since Tony Stark first strapped on his jetpack in Iron Man, movies in the Marvel Cinematic Universe have grossed over $12.4 billion worldwide.

So as you can imagine…

…of course Netflix wants to tap into this market. And the deal for Millarworld is another step forward.

On the creative front, it’s getting the “modern-day Stan Lee” (legendary creator of X-Men, Fantastic Four, Spiderman and others). But, there’s a cost-cutting play here as well.

With the acquisition of Millarworld, Netflix will now own valuable IP that reduces its pressure to continuously license Marvel characters.

Professor X would be proud.

Cord-Cutters Beware

If commercials aren’t your thing, FX+ might be. For only $5.99/month you can stream a library of FX classics like The Americans and Brew fave Nip/Tuck without commercial interruption. Here’s the catch, cord-cutters—it’s not for you.

Comcast (+.03%) has agreed to offer ad-free FX content only a month after running a similar deal with AMC.

This new subscription model tests FX and AMC’s ability to operate as standalone networks on the strength of their original programming. And if it works, subscription services (like Netflix) could face some healthy competition.

Commercial-free, binge-worthy content is the driving force behind this cable exodus. But with AMC Premiere and FX+, Comcast is fighting back. Because as cable networks are quickly learning, it’s evolve or die.

Burning Rubber…and Cash

Nothing about Tesla (-0.49%) is conservative—the electric cars…the solar energy…the Musk. That’s why you shouldn’t be shocked that it burns through cash faster than Floyd Mayweather after a payday.

Don’t believe us? Tesla had positive free cash flow once in the last 14 quarters, losing a record $1.16 billion in Q2. Here’s the problem—demand for Model 3 is through the roof at 1,800 net reservations per day, but Tesla only has $3 billion left for production.

So what should you do at a time like this? Apparently, issue $1.5 billion in high-yield junk bonds—a first for the electric carmaker.

If Tesla can make every penny count, profitability is in the cards for its least expensive model at $35,000. But, if it can’t…well, Musk might have to catch the next Hyperloop out of town.

Wanna Get Away?

Marriott (+1.10%) is opening up the minibar to Chinese travelers through a new partnership with Alibaba (+3.59%). Free water? Yessss!

As a result of the joint venture, Alibaba’s 500 million monthly active users will be able to book hotel rooms across Marriott’s global empire of 6,200 properties and 30 brands like the Ritz-Carlton and Gaylord.

Of course, there are 1.38 billion reasons American companies like Marriott would like to have access to Chinese consumers, but international travel in particular is an industry that’s ready to explode. Relative to Western travelers, Chinese globetrotters are younger, stay on vacation longer and travel in larger groups.

And if you’re still not convinced this is a gold mine for Marriott, consider this: the nearly $90 billion market grew 20% from 2016.

What Else Is Happening…

  • Activist hedge fund Pershing Square nominated three people, including CEO Bill Ackman, to sit on ADP’s Board of Directors.
  • The Netflix of Asia, Iflix, raised $133 million to provide streaming services in emerging markets.
  • Uber shot down rumors that Travis Kalanick would return as CEO.
  • French automaker Renault (+0.38%) will pursue a joint venture with an Iranian industrial conglomerate to manufacture cars in Iran.

Economic Calendar

  • Monday:
  • Earnings: CBS (+), Twilio (+), Tyson Foods (+)
  • Economic Events: Consumer Credit (-)
  • Tuesday:
  • Earnings: CVS, Hertz, Time Inc, Wayfair, Valeant, Walt Disney, Michael Kors, Plug Power, Ralph Lauren
  • Economic Events: Small Business Optimism Index
  • Wednesday:
  • Earnings: Alibaba, Cars.com, Office Depot, Wendy’s
  • Economic Events: MBA Mortgage Applications, Wholesale Trade
  • Thursday:
  • Earnings: Blue Apron, Kohls, Macy’s, Nordstrom, Noodles & Co, NVIDIA, Snap
  • Economic Calendar: Jobless Claims, PPI
  • Friday:
  • Earnings: Dish, JCPenny
  • Economic Calendar: CPI, Baker-Hughes Rig Count

Water Cooler

(Marvel Cinematic Universe) By the Numbers

Netflix’s acquisition of comic book production company Millarworld has got us thinking about mutants, evil geniuses and dreamy blonde men in tights…all of which can be found in the Marvel Cinematic Universe. And after learning Marvel films grossed $12.4 billion since 2008, we decided to see what else we could dig up. Without further ado:

$1.52 billion—Global box office revenue for 2012’s The Avengers, Marvel’s highest grossing film of the past decade.

$263.4 million—Global box office revenue for 2008’s The Incredible Hulk, Marvel’s least grossing film of the past decade.

7.75Game Informer’s rating, out of 10, for the Lego** Marvel Avenger’s video game. Reaches for controller

82%—Average Rotten Tomatoes rating for all 16 movies in the universe.

$160 billion—potential economic damage done to Midtown Manhattan in the final scenes of The Avengers. There were 15 other Marvel movies. New York will never recover…


The Breakroom

Question of the Day

100 passengers are boarding a plane with 100 seats. The first passenger in line has lost his boarding pass and chooses a random seat to sit in. Each subsequent passenger takes her assigned seat if it is unoccupied. Otherwise, she takes a random unoccupied seat. What is the probability that the last passenger will find her seat unoccupied?

(Give Up?)

Who Am I?

  1. I am the founder of the world’s leading cosmetic company.
  2. I created the Youth-Dew Bath Oil, ushering women into the world of body fragrance.
  3. I was the only woman featured on Time Magazine’s list of most influential leaders of the 20th century.
  4. I was awarded the Presidential Medal of of Freedom in 2004.

(Any guesses?)

Stat of the Day

$325

How much the Colombian government will pay individual farmers each month to stop producing cocaine. This comes as a result of the FARC signing a peace agreement with the Colombian government to relinquish their control on over half of the country’s coca production.

 


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