Netflix Just Showed Why the Disney Divorce Doesn't Matter

Netflix Inc (NASDAQ: NFLX) shares sold off last week after Walt Disney Co (NYSE: DIS) said it would launch its own streaming service in 2019 and pull its movies from Netflix.

Disney, which owns Pixar, LucasFilm, and Marvel in addition to its own studios remains the most valuable entertainment company -- particularly when it comes to kids' programming -- but Netflix has wasted little time brushing itself off since the divorce.

In fact, the streamer's content blitz seems to be only heating up. Netflix made its first-ever acquisition last Monday, acquiring MillarWorld, a comic-book-publishing house that includes Kick-Ass, which will help make up for the upcoming lack of Marvel movies. Netflix will still continue to stream Marvel TV shows, though. The following day, Netflix signed longtime late-night host David Letterman to a new series composed of six hour-long episodes, which will include one long-form interview and field pieces.

Then, the next day, Netflix said the Coen Brothers, makers of hit films like The Big Lebowski and No Country for Old Men, will write and direct a Western series called The Ballad of Buster Scruggs starting next year.

But the biggest news came earlier this week when Netflix forged a multi-year deal with Shonda Rhimes and her production company ShondaLand from Disney's ABC. Rhimes is the woman behind four of ABC's hit shows, including, Grey's Anatomy, Scandal, How To Get Away With Murder, and Private Practice.  ABC rushed to reassure its viewers that the bloc of shows known as "Thank God It's Thursday" would remain with ABC. However, news that the creator of its biggest cash cows would be leaving nevertheless stung the network.  Rhimes said she made her decision because Netflix offered "unique creative freedom and instantaneous global reach."

Netflix's competitive advantage

Netflix already had plenty of momentum in streaming before the recent hiring spree as it continues to add millions of subscribers a quarter and has grown its content budget to $6 billion.

A few years ago, it seemed questionable for Hollywood stars to make the move to the streaming service platform, but the tables have since turned. Stars like Brad Pitt, Will Smith, Martin Scorsese, and the ones above are flocking to Netflix, and Rhimes' statement underscores a key reason why.

Netflix CEO Reed Hastings often discusses the unique nature of internet TV, including allowing users to watch what they want when they want to, but the creative freedom Rhimes notes may be an even bigger draw for Hollywood talent.

Netflix is not subject to the standards of traditional TV, which is bound by time slots, advertisers, censors, taboos, and the need for a substantial mainstream audience. Netflix can be much more hands-off with its creators. Tina Fey, for example, initially brought the idea for Unbreakable Kimmy Schmidt, about a woman who escapes a cult, to NBC, but the network was wary of it, and she ended up selling it to Netflix. Fey said Netflix allows you "to get into more dangerous topics."

Amazon.com (NASDAQ: AMZN) has taken advantage of this as well; some of its most popular shows would've been unlikely to air on broadcast TV, such as The Man in the High Castle, a dystopian series about the Nazis having won World War II, or Transparent, a dramedy about a family whose father is transitioning to be a woman. Netflix's 13 Reason Why about teenage suicide is another such example.

With its haul of talent in just the last week, Netflix is easily making up for the loss of Disney movies. In fact, with nearly 100 Emmy nominations and record slate of releases last quarter, Netflix is now a better value than it's ever been before, and arguably the greatest value in the history of video entertainment.

The shift away from Disney and the networks and toward streamers like Netflix will only continue as Netflix's advantages, such as creative freedom, become even more clear.

10 stocks we like better than NetflixWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Netflix wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 1, 2017

Jeremy Bowman owns shares of Netflix. The Motley Fool owns shares of and recommends Amazon, Netflix, and Walt Disney. The Motley Fool has a disclosure policy.