| | | Netflix has a potential 'billion dollar' opportunity that it's just starting to explore
Nathan McAlone
Business Insider
"Stranger Things" mugs.Hot Topic
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Netflix has a potential standalone billion-dollar revenue opportunity selling merchandise based on its popular shows, according to RBC's Mark Mahaney.
A billion dollars!
"We view this as a highly reasonable step by Netflix to further promote and market its original content and other offerings," analysts led by Mahaney wrote in a note to clients.
Netflix would be following the example of Disney and Time Warner, which have found many ways to spin a hit show or movie into merchandise gold.
Right now, Netflix's plans are in their infancy, and Mahaney described that billion-dollar potential as a long way down the road. But Netflix has already conducted one test with "Stranger Things" merch at Hot Topic, and it seems to be looking to expand in the area.
"We see this as a development that signifies the coming of scale of an increasingly ubiquitous global entertainment company," RBC wrote.
In February, Netflix posted a job listing looking for an executive to head up licensing for "books, comics, gaming toys, collectibles, soundtrack and apparel," as Bloomberg unearthed.
The posting focused on how merchandise could be used to keep interest in a show going.
"We are pursuing consumer products and associated promotion because we believe it will drive meaningful show awareness/buzz with more tangible, curated ways to interact with our most popular content," Netflix said in the job posting. "We want licensed merchandise to help promote our titles so they become part of the zeitgeist for longer periods of time. Last but not least, merchandising and promotion will be used as a marketing tactic to capture member demand and delight our member community."
As Netflix content boss Ted Sarandos said last year: "Kids carrying the backpack sells the show."
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