Films for Netflix

Netflix shares rose on news of a multi-year contract with Steven Spielberg's film company Amblin Partners, which will make several feature films a year for the Netflix service.

Netflix (NFLX) has partnered with arguably the world's most famous filmmaker Steven Spielberg, or rather a long-term contract with his film company Amblin Partners.

The financial side of the cooperation is not disclosed, it is known that Amblin Partners will shoot several feature films a year for the service Netflix, and that the contract is not exclusive and the film company will continue to work with other partners.

For Netflix, the deal is a way of retaining its huge number of subscribers, which has reached almost 209 million worldwide. After production of new movies was halted last year due to the pandemic, Netflix has promised to catch up and release more than 70 films in 2021. Netflix plans to spend more than $17bn on content this year.

Quality content is especially important for the global leader today, given increased competition in the streaming services market from Disney (DIS), Apple TV (AAPL), Amazon (AMZN), AT&T's HBO Max (T) and Comcast's Peacock (CMCST).

Two major mergers in the streaming video market have been announced this year and the combined services could create more competition for Netflix.

AT&T's WarnerMedia is merging with Discovery and Amazon has announced the purchase of Metro-Goldwyn-Mayer. It is worth noting that both deals are not yet finalised and require regulatory approval.

Long-term investors should remember that Netflix shares have risen 1,300% over the past decade, creating a company with a market capitalisation of $227bn. With strong operating cash flow and the widest international subscriber reach, Netflix remains a fantastic investment with outperforming market prospects today.

At the same time, market analysts warn that Netflix shares could remain "under pressure" in the short term as the pace of adding new users could slow down in the coming quarters. This is affected by mass vaccinations and the lifting of quarantine conditions, which reduces demand for online entertainment. Many experts also see risks that competitors could take away some of Netflix's market share.