It is All About Exclusive Content for Netflix, Inc. (NFLX)

By working with DreamWorks, Netflix can strengthen its unique content offerings, thus make it a better investment for shareholders. On the other hand, by working with Netflix to maximize its online and mobile exposure, DreamWorks shareholders will benefit from the growing distribution channels while the trends continue to shift toward online and mobile. This deal makes both Netflix and DreamsWorks better investments.

Unlike Netflix’s strategy to provide unique content, and DreamWorks’ focus on content creation, Viacom and Amazon have different objectives. While both Viacom and Amazon are operating with a more diversified model, their partnership fits well to maximize their viewership and subscribers. For Amazon shareholders, it is definitely a good news to gain from Netflix’s short-term pain; however, in the long-term, Amazon will have to combat harder as Netflix continues to evolve and become stronger with its exclusive content offerings.

Bottom line

It is expected that more deals similar to the DreamWorks deal will be signed for Netflix as it continues to position itself as an expert programmer. On the other hand, more studios, such as DreamWorks, will continue to enter into online and mobile space. Mobile Internet has just begun to accelerate its force to disrupt the existing media and entertainment landscape. Netflix is well positioned with a clear strategy to leverage the rising mobile Internet trend.

Nick Chiu has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, DreamWorks Animation, and Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Nick is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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