Netflix to offer new horror series

The company is laying the groundwork to stand out from other rivals jumping into the video-streaming business.

By Benzinga Mar 21, 2012 6:57PM

By Brandon Pilzner, Benzinga

Shares of Netflix (NFLX) saw strength Wednesday, closing up 4.4% to $120.10 after the company announced an exclusive deal with notable horror director Eli Roth.

Netflix will give members exclusive access to "Hemlock Grove," a series based on the critically acclaimed novel by Brian McGreevy. The series, slated to run for 13 episodes, updates classic monster archetypes for a post-industrial America in a tale of alienation, adolescence and murder.

Investors may have keyed in on this exclusive deal, or Wednesday could have been another day of mystery momentum for the stock. At any rate, shares broke out early and stayed close to the $120 range for much of the trading day.

Benzinga reached out to Justin Colatosti, analyst at Dawson James, for his take on the announcement. "It's tough to pinpoint a single headline to a movement in the stock," Colatosti stated. "However, this just continues Netflix's plan for exclusive content."

After a tumultuous 2011, Netflix has been pursuing a strategy of offering exclusive, original shows to customers. It's spending $100 million to license "House of Cards," starring Kevin Spacey. It also debuted the original series "Lillyhammer" and has licensed a number of new episodes of cult favorite "Arrested Development."

Netflix agreed to a deal with Lions Gate Entertainment (LGFlast year to stream all seven seasons of the television hit "Mad Men."

"The long-term story remains the same," Colatosti concluded. "Netflix's future will likely depend on the pricing and offering from Verizon (VZ) and Coinstar's (CSTR) Redbox."

Verizon and Coinstar announced a joint venture in February that aims to offer streaming and downloadable videos as well as disc rentals from Redbox kiosks. The service is expected later this year, and will likely become Netflix's biggest competitor.

The battle of cheap streaming has yet to begin in earnest, and Netflix is already laying the groundwork to stand out from the rest of the field.

More from Benzinga:
Mar 22, 2012 2:09PM
It sounds like Netflix is trying to expand their market. It should be interested to see if this is successful.
Mar 22, 2012 1:50PM
Wow, this should get interesting. Will Netflix become an online version of HBO?
Mar 22, 2012 8:34AM
I'm sure investors are very worried about the VZ/CSTR deal, however, still need more info to see if it will eat up NFLX sub growth.
Mar 22, 2012 2:45PM
Netflix better stay strong because I don't feel like acclimating to ANOTHER new service!
Mar 22, 2012 2:01PM
After the struggle it faced last year, it will be interesting to watch Netflix compete with the likes of Redbox/Verizon&Coinstar.
Mar 22, 2012 1:49PM
Not sure what is scarier - the horror series or NFLX's numbers
Mar 22, 2012 9:13AM
wow, i guess that announcement guarantees 20m viewers for the show if it ever gets here.  i don't think another vampire series is going to push that 3.5B they need in sales. 
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