This Trigger Event Could Be Huge for Netflix Stock

Netflix StockIs India the Key to Netflix Stock Growth?

Think you can name the biggest actor on the planet? No, it’s not Brad Pitt, Jennifer Lawrence, or Chris Pratt. It’s Bollywood actor Shah Rukh Khan, and his Red Chillies Entertainment production house just signed a streaming deal with Netflix, Inc. (NASDAQ:NFLX) that could be huge for Netflix stock down the line.

What’s important here is the context: Khan is a huge name in India. Just how big? See below from Quartz:

Khan, who is sometimes referred to as King Khan, is widely considered the biggest movie star in the world. While he’s not the top earner—that distinction, for 2016 at least, goes to Dwayne “The Rock” Johnson—Khan’s $33 million in earnings for the year ended June 2016, his vast collection of high-grossing films, and his international appeal make him the biggest actor alive, according to Forbes.

The deal grants Netflix global streaming rights to the films in Red Chillies’ library, as well as any new movies from the production company set to release in the next three years. The move is an attempt to help boost Netflix stock by tapping into the hundreds of millions of potential customers in the Indian subcontinent. (Source: “Netflix just signed a deal with the biggest movie star in the world,” Quartz, December 16, 2016.)

Khan’s signing also speaks to another factor weighing on Netflix stock: increased competition. In India, for instance, Amazon.com, Inc. (NASDAQ:AMZN) just released its Netflix-rivaling “Prime Video” platform earlier this week, and at a lower price point than Netflix to boot. Netflix was released in India about a year ago.

Which is to say that the streaming wars are heating up in Southeast Asia, and Netflix stock is hoping that scoring Khan can help push the needle in its direction. But with competitors moving in on other high-profile Bollywood actors and production houses, it’ll be interesting to see how Netflix stock can measure up when introduced to foreign markets against such tough competition.