Just as the the world's largest streaming service announced a stock split in an effort to make its shares more accessible to retail investors, Netflix is showing that it's also willing to tinker with its trademark format of releasing all episodes of its original shows to allow for binge watching.
Netflix declared a seven-for-one stock split as shares doubled in 2015 amid projections that the streaming service will continue to expand as it enters new markets around the world. Shares of the Los Gatos, Calif.-based company rose as high as $700 in premarket trading.
The stock split comes as Netflix experiments with how best to release its original programming, one of the central attractions to the service. At least three new shows will follow a week-by-week release strategy: Canadian disease drama Between, a new series starring Ashton Kutcher and a yet-to-named talk show from the comedian Chelsea Handler.
In all three cases, Netflix is showing that the all-at-one release method it has created might not be suited for all shows at all times.
"I do think Netflix's trademark shift to binge viewing was less about shifting to that new model and more about experimenting with the model," said James McQuivey, media analyst with Forrester Research. "I have always understood that Netflix would use whatever model works best to generate awareness and viewership of specific shows."
So far, Netflix's more than 41 million U.S. subscribers have bought into the company's binge-style release method. That number of subscribers was one of the reasons BTIG media analyst Rich Greenfield recently raised his 12-month price target on Netflix's stock by 45% to $950 a share.
"Just a few years ago, the knock on Netflix was there was not enough to stream [and] watch," Greenfield said. "Now, consumers are building up personal bucket lists of series they want to see on Netflix [as] new and library content is coming on faster than it can be consumed.
In the case of Between, Netflix has chosen to release a series in a manner that is nearly the opposite of how it has done every one of its original series to date. The program airs first on the City TV network in Canada on Thursday nights at 8 p.m. Eastern time, then the episodes make their Netflix debut at 11:30 p.m. EST the same night. The show's first-season finale is slated for June 25.
Laura Martin, who covers Netflix for Needham, said Netflix's approach to Between suggests the company is experimenting with the same lessons that the TV industry learned over more than 50 years of broadcasting.
"The best way to generate repeat visitation is to put out new episodes periodically," Martin said. "The idea is if you go there once a day or a week to watch your favorite show, you end up watching other stuff. When you sit down to watch all episodes at once, you tend leave when you are done and you lose that halo effect."