Tomahawk, WI 10/22/2013 (BasicsMedia) – Netflix, Inc. (NASDAQ:NFLX) boats of a market cap of $19.65 billion. Many analysts have intimated that the company has the potential to double or triple its market share. There are many ways it can embark on such an exercise, and thankfully, NFLX has kick-started some of them. NFLX is intent on coming up with new products meant for the children, and it hopes to do this through buying Teletubbies, Inspector Gadget and Care Bears. The market is quite ripe for this sort of change bearing in mind that re-watching old content and binge watching is now the norm.

Care Bears, Inspector Gadget, and Teletubbies Hold The Key to a New Market

Care Bears, Inspector Gadget, and Teletubbies are popular with children, but getting new content for these shows has become quite a challenge. If NFLX is to get these three popular children’s shows, it has not option than to make a bid for DHX Media Ltd, which owns them fully. DHX features on the Toronto Stock Exchange, and is currently valued at around $350 million. NFLX can put together a package to buy DHX Media Ltd thus giving it direct ownership and control over the three very popular children shows, Care Bears, Teletubbies, and Inspector Gadget.

Children present a very useful market, which a firm of NFXL’s stature and reputation cannot afford to ignore for long. The three products that are currently under the ownership of DHX have the capacity to give NFLX a major foothold into this highly valued market. This will inevitably help to increase NFLX’s market share across the board. The fact that these three children shows provide original content, will also help NFLX achieve its goal in terms of offering original content and not aping what is already on the market.

NFLX Needs to Bid for DHX Media Ltd

The challenge for NFLX is to make an offer to DHX that it cannot refuse. I think the least offer that DHX would be forced to look at is one where it gets minimum of $5 CAD for every share. DHX never owned the three shows mentioned above in the first place. It became the owner once it acquired two companies, Ragdoll Worldwide Ltd, which is the original owner of Teletubbies, and Cookie Jar Entertainment Inc, which used to be the owners of both Inspector Gadget and Care Bears children shows. DHX may ask for an offer of more than $5 CAD per share.

NFLX needs to look at ways that will help it remain appealing to households, which I think it can achieve by including shows such as the aforementioned. If children notice that new shows such as the aforementioned are part of NFLX, they are likely to ask their parents to subscribe to Netflix Inc products. This strategy will also help NFLX to raise a new but loyal group of customers for the next generation. If it captures children right now by bidding for DHX successfully, it will achieve two goals; increasing its market share and capturing a new market.

The bid by NFLX to acquire DHX Media Ltd is one that needs the support of all investors since it has both short-term and long-term benefits.

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