The end of 'Stranger Things' might actually be a boost for Netflix

The Netflix hit will continue to be an asset for the streaming giant even after the series ends.

| More on:
A group of young people sit together watching a television very intently with wide-mouthed, awed expressions while one holds a large bowl of popcorn with a bottle of beer in the foreground.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix (NASDAQ: NFLX) released the fourth and penultimate season of Stranger Things between May and July, which amassed millions of views. The creators of Stranger Things have not revealed the launch date for season five, but have confirmed it will be the final season. Here's why the show's end might actually be positive for Netflix's growth. 

Utilizing talent

Stranger Things launched on Netflix in July 2016, receiving universal acclaim and making overnight stars of its almost entirely unknown cast. Netflix did not reveal subscriber viewership back then, but analysts have surmised the show reached an average of 14.07 million adults in the U.S. in its first 35 days -- making it the third-most-watched season of a Netflix original series at the time.

The second season soared further, earning a nod from Guinness World Records for the most in-demand digital original series of 2017. The latest season of Stranger Things has only added to the show's success, becoming the first English-language Netflix series to cross one billion viewing hours within 28 days. The show has become a valuable tool for Netflix to retain subscribers.

Moreover, the cast and creators of Stranger Things are advantages Netflix can utilize in its fight to win the streaming wars. The show's creators, Matt and Ross Duffer, often called the Duffer Brothers, announced the launch of their production company, Upside Down Pictures, in early July. The duo has unveiled various upcoming Netflix projects, including a Stranger Things spinoff, a Stephen King adaptation, and a live-action Death Note series. The end of Stranger Things would increase the number of projects the Duffers can devote time to, adding more content to Netflix's library to attract subscribers. 

The show's end would also free up its cast for other projects. Netflix has already had Stranger Things lead Millie Bobby Brown star in the 2021 film Enola Holmes, which became the seventh-most watched Netflix original movie in history, with 76 million views, and prompted a sequel yet to be released. Brown will also star in an upcoming Russo Brothers (Avengers: Infinity War, Endgame) film, The Electric State.

Once Stranger Things ends, its other immensely popular stars will be increasingly available to take part in additional Netflix originals -- potentially pulling in additional fans and subscribers. 

The Stranger Things "cinematic universe"

The tremendous success of Stranger Things could lend itself to the creation of a cinematic universe. It also raises the potential for Netflix to have something that could put its library of content in a similar league to its biggest competitors: Walt Disney's (NYSE: DIS) Disney+ and Warner Bros. Discovery's (NASDAQ: WBD) HBO Max. Both have utilized well-established franchises from their parent companies' content libraries to inspire streaming originals, encouraging large fanbases to flock to their platform. 

Disney has gained millions of views on Disney+ with a variety of original series based on various Marvel properties and the Star Wars universe. In January 2021, the Disney+ series WandaVision featured popular Marvel characters and was 81.3 times more watched than the average streaming show across all platforms, according to a TVision analysis. More recently, in May, the Star Wars series Obi-Wan Kenobi premiered on Disney+ and became the most-watched series on the platform ever with the premiere pulling in 2.14 million viewers.

If Netflix can use the popularity of Stranger Things to kick off a variety of other series and films with some connection to the original show, the show's many fans could have further reason to retain their Netflix subscriptions. Disney has used its Marvel and Star Wars series to create a consecutive schedule of releases that leaves subscribers less willing to drop Disney+. Netflix could similarly encourage subscriber retention by releasing content based on Stranger Things and other projects starring its actors to keep its members.

While Stranger Things has a substantial fanbase, the Duffer Brothers also have the potential to entertain Netflix members with different interests. The filmmakers' upcoming projects prove the potential for Netflix to grab viewers from alternative entertainment domains with a long history of attracting fans. Stephen King adaptations and manga-inspired content have attracted large audiences in the past and can certainly do so for Netflix.

The future of Stranger Things

For Netflix to retain Stranger Things as an asset, the last season must satisfy its loyal fans. Keen investors will want to keep an eye on the critic and audience scores of season five's episodes, particularly its finale. High scores will mean Netflix continues to have the potential to grow a cinematic universe and mean its creators' names still hold weight when attached to other projects. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Dani Cook has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix and Walt Disney. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

A man in a business suit peers through binoculars as two businesswomen stand beside him looking straight ahead at the camera.
International Stock News

Where will Nvidia stock be in 1 year?

You might be late to the party.

Read more »

asx share price boosted by us investment represented by hand waving US flag across winning athlete
International Stock News

Is it too late for ASX investors to start buying US shares?

Should ASX investors start taking the gains from US shares like Nvidia off the table?

Read more »

A US flag behind a graph, indicating investment in US shares
International Stock News

Which US shares are ASX investors buying in 2024?

The ASX's most popular US shares contain some familiar names...

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
International Stock News

Prediction: 2 US stocks that will be worth more than Nvidia 5 years from now

These US stocks have a shot at surpassing Nvidia over the next few years.

Read more »

Digital rocket on a laptop.
International Stock News

Is Nvidia stock going to $150 in the wake of its high-profile 10-for-1 stock split?

Wall Street analysts are reviewing their models in the wake of Nvidia's stock split.

Read more »

A woman walks along the street holding an oversized box wrapped as a gift.
International Stock News

Better megacap stock: Nvidia vs. Microsoft

Megacap stocks have ruled the year so far. Is Nvidia or Microsoft better positioned for the second half of the…

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
International Stock News

Is Nvidia stock a buy now?

Nvidia investors are looking ahead. But there is risk in counting on things that haven't happened yet.

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
International Stock News

45% of Warren Buffett's $398 billion portfolio is invested in 3 artificial intelligence (AI) stocks

You won't find Warren Buffett chasing the latest stock market trend, but many of the stocks held in Berkshire Hathaway's…

Read more »