Key Takeaways
- Netflix announced plans earlier this week to open two permanent “Netflix House” experience venues, as the company looks to grow its business beyond streaming.
- Netflix has created some 50 live experiences across the globe in recent years, and the move expands its footprint in experiences.
- With Netflix Houses, the streaming giant emulates competitors with successful theme parks like Disney and Comcast’s Universal.
- Disney CEO Bob Iger said the company’s growth in the most recent quarter was driven “in large part” by growth in its experiences segment.
As Disney (DIS), Comcast (CMCSA), and other entertainment conglomerates work to catch up to Netflix’s (NFLX) streaming dominance, Netflix is taking steps to expand its business by following rivals’ parks success with its own experiences spaces.
Netflix said Tuesday it plans to open two permanent “Netflix House” entertainment venues in shopping malls in Dallas, Texas, and King of Prussia, Pennsylvania by next year. The locations will have themed experiences centered around popular Netflix shows like “Bridgerton,” “Stranger Things,” and “Squid Game,” along with stores filled with Netflix merchandise and restaurants.
Expanding Netflix’s Business Beyond Streaming
Netflix has created dozens of other temporary experiences themed around the streamer’s most popular shows in a number of locations around the world, and the permanent Netflix Houses raise its bet on the live experience market.
“I think it’s a good idea on their part, I think people want experiences, the experiential economy is soaring,” IMAX CEO Richard Gelfond told CNBC’s “Last Call” about the Netflix House announcement earlier this week.
However, Gelfond suggested Netflix could face difficulties trying new things that aren’t part of its “core competencies,” and said that running retail, restaurant, and merchandising operations require “a different skill set” than building a streaming company.
How Do Netflix Houses Compare to Disney, Universal Parks?
While the Netflix Houses won’t have rides like Disney or Comcast’s Universal theme parks, the streamer’s bet on the money-making capabilities of in-person experiences suggests Netflix hopes to emulate the success of Disney and Comcast’s experience-based revenue streams.
Netflix is keeping some parts of the traditional theme park experience by retaining retail and restaurant aspects, but opting for themed experiences around its own shows rather than amusement park staples like roller coasters. The Netflix Houses will also be “over 100,000 square feet” according to the company’s release, a fraction of the size of outdoor theme parks like Disney’s, which can cover hundreds of acres.
Moves Comes as Demand Grows for Experiences
In recent quarters, Disney and Comcast have both expressed optimism about the gains they have seen in business at their respective parks, amid growing demand for experiences like concerts and theme parks.
Disney CEO Bob Iger said in an earnings call in March that the company’s growth in the quarter was driven in large part by its experiences segment of theme parks and cruises as well as its streaming platforms, and said the company is “turbocharging growth” in the experiences division.