Netflix (NASDAQ: NFLX), the DVD-rental and movie-streaming giant, on just announced its first acquisition after 20 years in business.
Netflix will be buying Millarworld, the eponymous, 15-year-old independent production company of British comic book impresario Mark Millar. You may know Millar from such titles as Kick-Ass, Wanted, and Kingsman, all of which were previously adapted into successful movies, and some of which have generated associated franchises.
Netflix will be creating new content, including films and series, based upon characters in the existing Millarworld portfolio that have not already been optioned. Millarworld will continue to develop new stories under the Netflix label. As the deal includes Millarworld's intellectual property, Netflix will have control over the creation, production, marketing, and branding of all future Millarworld stories. The price of the acquisition was not disclosed.
The acquisition also continues an overall trend at Netflix of expanding their catalogue of original content, through which it hopes to distinguish itself in an increasingly crowded streaming market. In 2016 Chief Financial Officer David Wells has said the company hopes to have half of its content consist of original content over the next few years.
Netflix already has experience in adapting comic books to the screen with its own Marvel titles, including Jessica Jones, Daredevil, and Luke Cage, and has successfully carved out a niche of other original content, like the critically-acclaimed Narcos and House of Cards.
Driven in part by an increase in international subscriptions but also perhaps by exclusive access to its own original content, Netflix has quadrupled subscribers over the last 5 years, reaching over 104 million subscribers worldwide.
The Millarworld deal has drawn comparisons to Disney's (NYSE: DIS) acquisition of Marvel comics in 2009. The acquisition was extremely profitable for Disney, which has raked in over $8.5 billion in global box office sales for its Marvel titles since the merger. Disney currently has 10 more Marvel productions planned through 2019.
Indeed, Disney and Netflix have emerged as competitors in more way than one. On Tuesday Disney announced that they will end their distribution deal with Netflix before 2019 to create their own subscription streaming service. This effectively ends a partnership that began in 2016, when Netflix gained exclusive streaming rights to Disney titles. Netflix and Disney are still negotiating over whether or not certain popular titles, such as Star Wars, will be retained.
Netflix Chief Content Officer Ted Sarandos explained that Netflix had anticipated the move, and that they expect other content producers may follow suit: Netflix began generating their own original content partly with the expectation that studios and networks would soon make it more difficult to license their content.