Tech: Netflix's foray into merchandising could be a multi-billion dollar business

Merchandising has proven to be a successful cash cow for other media companies, and Netflix is primed to earn the big bucks through a new deal with Target.

During Tuesday's third quarter earnings call, Netflix CEO Reed Hastings and other executives donned "Stranger Things" Christmas sweaters with embroidered blinking lights in a stunt designed to promote the second season of the hit show and announce a new merchandising deal with Target. "We’re celebrating both the amazing content that’s coming in ten days or so and also Target's great promotion strategy," Hastings said on the call.

As we can see in this chart from Statista, licensed merchandising has already proven to be a strong business model for media companies like Walt Disney and Nickelodeon. Netflix's business is doing fine as it is — US and international subscriber rates both exceeded Wall Street's expectations, and the company was able to grow its revenue at higher than expected rates as well. But if consumers snap up Netflix-inspired T-shirts, games and action figures, the company could be looking at a new, multi-billion dollar business opportunity.

Merchandising has proven to be a successful cash cow for other media companies, and Netflix is primed to earn the big bucks through a new deal with Target. Read Full Story