“Brian Marshall of Gleacher & Co. estimates that that Cupertino-based Apple rents about 475,000 TV shows and movies daily versus Los Gatos-based Netflix’s 5.1 million rentals a day,” Silicon Valley / San Jose Business Journal reports. “‘What I’d like to see is Apple buying Netflix,’ [Marshall wrote in a note to clients.] ‘Netflix has approximately 150,000 titles, while Apple has just 15,000. Apple has a tremendous opportunity (if it buys Netflix).'”
Silicon Valley / San Jose Business Journal reports, “Including a 20 percent premium over Netflix’s current market cap, such an acquisition would cost about $12 billion.”
Full article here.
Apple should buy
– IBM
– HP
– Dell
– Acer
– Intel
– NVidia
– Adobe
And be done with it. Why bother churning out Macs that have a 10% market share.
If Apple bought Netflix the Studios and TV networks would just cut off the supply of movies and TV shows and make the acquisition worthless.
The Studios and TV Networks are scared shitless of Apple’s power.
My take: No.
MDN MW: reason
I don’t think licenses transfer in an acquisition. Like when Apple acquired Lala, the licenses were voided.
The analyst must have a load of nflx. Apple should just wait six months and if they really want to, buy nflx on the cheap. The next two Qs will expose the ridiculously high valuation. With apple’s money they can just create a new business. They do not have to pay a premium.
Does anyone know how Netfix manages to circumvent the bearucratic embargo of rentals that Apple has to contend with from the big studios?
Yeah, not a good move. Backwards thinking about a company that is trying to kill physical media. Why would they spend $12 billion to get into the DVD rental market?
What Apple needs to do is build a web based iTunes store, that offers sales, rentals and streaming options. Create a monthly subscription that allows a few movie rentals and a streaming service.
And of course, get more content from the studios.
@Big Als MBP
Absolutely correct.
The Studios and networks are scared of Apple becoming a de facto broadcaster.
Apple has everything bar the supply of content.
There is nothing to buy…. Netflix rents the titles from the content owners (movie companies or distributors) and then rents them to you. Same with Apple. Content is the name of the game, no one company will ever own all that stock for keeps or be able to supply all the stuff you want to see on your TV via internet, DVD or broadcast.
DVD rentals are dying. Just ask Blockbuster. Apple is better positioned than Netflix to deliver movie rentals/purchases over the net, so all Apple has to do is get a larger library.
Once Netflix and Blockbuster fail or at least drop most of their subscribers, the movie/TV studios will be all over giving Apple more of their catalogues.
Also, Apple may only be pushing for mostly new releases. Having a massive catalogue of movies that nobody rents doesn’t really help.
The studios are already talking about cutting off Netflix. It was just in the news a few days ago. And why are they comparing Apple’s downloadable titles to Netflix’s DVD titles? I guess having average intelligence makes you overqualified to be an analyst.
@breeze
Assume it’s because of Big Als point – the studios are scared shitless of Apple and don’t want too much power in one company’s hands.
@bizlaw
DVD rentals are slowing for sure, but everyone who claims the death of physical media is imminent overestimates the ability of the market as a whole to be able to take advantage of streaming media.
Good high speed broadband isnt as widespread as people who frequent these boards would like to think plus…
Don’t underestimate people’s desire for ultimate simplicity. Taking a disk and putting it in a drive is much easier for a lot of people than figuring out streaming solution.
Newsflash! Netflix does streaming, in fact, they just created a streaming only monthly package.
I have Netflix and AppleTV (1st, but about to buy a new one). I use both for different purposes. The Netflix is actually pretty cool, and the price is dirt cheap at $10.00 a month for subscription. I’m in the boonies, so I still use the DVD rentals, especially for kids’ movies. My kids will watch a movie 5-6 times in a row, so the DVD makes more sense for them. I also buy them content from iTunes and stream it to their AppleTV.
I have Netflix and love it. Now that I can stream to my TV from my iPad, it’s even better. I can stream all the movies I want, no limits.
But streaming is no substitute for Bluray. At least not today. Until someone offers a reasonably-priced subscription with Bluray-quality video and audio, I’ll stick with physical media. Why would I pay up to $5 per movie when I can watch as many as I want for a fixed (low) price?
Netflix has a PE ratio over 3 times that of Apple. The question isn’t how many discs Netflix ships each month, since that’s a dying business and certainly doesn’t align with Apple.
Netflix is not a dying business geniuses, Netflix is growing and will be growing in the near future, Netflix does not only ship DVDs it streams content.
There are two conflicting forces at work here.
One force that will sustain optical media for foreseeable future is broadband bandwidth. No US home has access to (at least) 30Mbps required for good 1080p HD (Blu-ray quality). Highest consumer bandwidth is fiber-optic, which is around 20Mbps, but majority of US does not have access to it, and can only get at most 2-5Mbps. Hi-def on 5Mbps is a joke, and everyone who has cable TV in HD can confirm this.
On the other hand, majority of purchasing decisions in US families are made by women. For them, the difference between a 17″ black-and-white TV screen and 42″ LCD HDTV is irrelevant — they simply don’t care about HD quality. They only care about convenience. If a digital download is more convenient than getting NetFlix by mail, they will prefer digital download.
So, don’t write off physical medium just yet. Studios have thrown their full support behind it, and are putting up obstacles to digital downloads right and left. For them, the model works, gives them total control and massive profits. They are simply too scared of digital download model and just don’t want to consider it. Coupled with dismal broadband situation in the US, and we have at least a solid decade of physical disc dominance in American homes.
@Everyone
Eh, and the obvious reason that you all seem to have missed?
Netflicks got a super sweet deal on all there online content, its a contract that was baked a few years back that was not thought through all the way by the provider that owns the rights to it. It ends in a coupel of years, at which time they need to renegotiate the deal and pray for a way to keep the content at a reasonable price. Something everyone form MSFT to HULU to anyone else is gonna be after, including APPLE.
Good luck with that purchase.
NO!!!!
All Apple will do is to kill the disc distribution network, in favor of streaming content.
And as someone has pointed out, here in the 3rd World Country known as the USA, our internet service SUCKS!
So streaming alleged HD content is not going to be nearly as good as Blu-Ray for quite some time.
MDN MW = less movies streamed with LESS data will never look as good as movies with more data from BluRay.
Apple buying Netflix is a ridiculous proposition. Apple stocks content to attract people to buy its hardware. The Netflix app accomplishes this in a way more cost effective manner than actually owning the company. Content provider are hesitant to give Apple more control not because of Apple’s power in the market place, but because their current arrangement isolate the revenue stream from the quality of the content.
Look at what happened when Apple offered singles for sale in lieu of albums. Huge declines in profits because people were no longer required to buy crappy filler material with the one or two legitimate hits on a CD. Of course the record companies locked themselves into contractual obligations with their talent and made bad decisions by forcing artist to produce content on a schedule (bad or good) in an effort to maintain a revenue stream. Studios are no different in this regard, forcing multi-picture deals on talent without regard for quality of the content. The Netflix app on Apple’s equipment instantly opens up a larger content library and Netflix bares all support costs with the ITunes library as a back up.
I subscribed to netflix for their free trial.
Only found one movie that was any good for me.
This week alone, I downloaded about $50.00 worth of shows, and will watch them when i want to.
As Apple moves more Apple TV’s into homes the gap with Netflix will narrow. If Apple offered a monthly sub download service it would close very quickly.
As Apple moves more Apple TV’s into homes the gap with Netflix will narrow. If Apple offered a monthly sub download service it would close very quickly.
As Apple moves more Apple TV’s into homes the gap with Netflix will narrow. If Apple offered a monthly sub download service it would close very quickly.