The analysts say the release of new Netflix-backed television series and feature-length films augurs well for the Los Gatos, Calif.-based media producer's subscription numbers, while its recently announced plans to exclusively stream popular films and TV shows from Walt Disney (DIS) - Get Report will help drive growth in the second half of 2016.
In the past, the report said, the release of original content has boosted subscribers, a trend the three analysts see continuing with a "strong slate" of new shows. The researchers point to a normally positive relationship between original television series and the number of new subscribers added dating back to the first quarter of 2013. The analysts also note Netflix's first-quarter gain of 2.2 million U.S. subscribers far exceeded expectations of 1.8 million.
Neither Cantor Fitzgerald analyst Youssef Squali, who worked on the report, nor a Netflix spokesman could be reached for comment.
Shows that have already been released or are scheduled to be released in the second quarter include the second season of the comedy "Unbreakable Kimmy Schmidt," which launched April 15, and the fourth season of drama-comedy "Orange is the New Black," out on June 17. Chelsea Handler's thrice-weekly talk show, "Chelsea," debuted on May 11, though it is off to a rough start as, according to press reports, the show has lost executive producer Bill Wolff.
In the first quarter, the company released "Fuller House," a spin-off of the Bob Saget-led 1980s-90s comedy "Full House," and the fourth season of the political drama "House of Cards."
There's no shortage of upcoming releases of original content, either. This quarter, the streaming behemoth announced plans to launch series for "Marvel's The Punisher;" an unnamed thriller with Naomi Watts, who will play a therapist; and an untitled series on the ongoing corruption scandal in Brazil involving state-run oil company Petrobras, which allegedly inflated the price of contracts with construction firms for nearly a decade.
The positive outlook comes after Netflix chief content officer Ted Sarandos and CEO Reed Hastings, while fielding an inquiry from a Recode analyst on the first-quarter earnings call, batted back the idea of making any smaller acquisitions to aid the company as it ventures into producing its own feature-length films.
"[W]hat you're seeing not just on the films but also on several of our series where Netflix is increasingly the studio and the network on those shows, so we are building that efficiency [of original film creation] in-house," Sarandos said, according to a transcript of the call.
"When you look at the growth in our originals," Hastings added, "you can see that we can deliver on that on this organic hiring basis which of course is much stronger for the long term than if you tried to juice it with [mergers and acquisitions]."
Netflix first introduced its new films in July 2015 when it announced its first slate of original movies. Among the films released this year include "Crouching Tiger, Hidden Dragon: Sword of Destiny" on Feb. 19, and "The Fundamentals of Caring" on June 24.
The analyst report also notes expectations that the Netflix-Disney partnership, which gives exclusive rights to Netflix for subscription television and begins this September, will drive user growth. The companies announced the deal in December 2012 but did not announce until recently when those streaming rights would begin. It will include films from Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios and Disneynature.