Why Guggenheim Securities' Michael Morris is bullish on Netflix

Core Business Performance - Netflix is shifting focus from subscriber count to engagement metrics, which measure the amount of time users spend on the platform [2][3] - Engagement has been a challenging metric for Netflix in recent quarters, but there are expectations for improvement in Q3 due to strong content performance [3][5] Content Performance - The company had a strong lineup of titles in Q3, including the latest season of "Squid Game," "Happy Gilmore," "Wednesday," and "K-pop Demon Hunters," which contributed significantly to engagement [4][5] Competitive Landscape - The rise of AI-generated content poses both opportunities and threats for Netflix, as it competes with platforms like YouTube that focus on short-form content [6][8][9] - Netflix is actively building its intellectual property (IP) and exploring new revenue streams, which are crucial for maintaining competitiveness in the evolving media landscape [8][10] Strategic Initiatives - Netflix is pursuing partnerships to enhance content offerings, such as collaborations with TF1 in France for live content and Spotify for exclusive video podcasts [12][13] - The company is also expanding its gaming initiatives and engaging top-performing short-form content creators to produce Netflix content [13] Future Outlook - There are predictions that Netflix will invest in NFL content in the next cycle, indicating a proactive approach to securing valuable content rights [14]