Jim Cramer: Buying Netflix could be just the game-changer Apple needs

“The market is ripe with speculation that Netflix may be a takeover target. Cramer said if any company is about to make a move he hopes it’s Apple,” Lee Brodie reports for CNBC. “The Mad Money host thinks Netflix is now the perfect fit, because it’s launched a new feature allowing its customers to link their Netflix accounts to Facebook.”

“Why does that matter? ‘Because Apple has been lacking social, and you need the holy trinity of social, mobile and the cloud to triumph in this brave new gadget world,’ Cramer said,” Brodie reports. “The Netflix acquisition would complete the triumvirate.”

Brodie reports, “As for the cost of the acquisition – Netflix has a ten billion market cap. ‘Ten billion dollars is a rounding error for Apple given its cash hoard,’ Cramer said. ‘It’s pretty simple. Apple needs growth and it needs it in a visible red-hot way. Nothing would be hotter than a Netflix acquisition,’ Cramer said.”

Read more, and watch the video, in the full article here.


    1. Why?

      Silverlight is not great (efficiency or performance) and stability is acceptable but again not that good. (“good enough seems to be a theme with MS)
      Piss of customers? I doubt any one would even miss it if were removed.

    2. Netflix *might* be a reasonable acquisition target for Apple if the Netflix content contracts were transferable and long term. Without those media agreements, Netflix is worthless.

      Furthermore, Apple already offers some of the same functionality as Netflix. So, when Cook and the BoD consider the value of $15B (Netflix market cap plus 50% premium as a rough estimate of acquisition cost), they must consider what they can do with those resources internally to evolve and expand the iOS and Mac ecosystems in comparison to the benefits (and impacts) of attempting to incorporate a separate corporate entity.

      Again, without long term media agreements, a Netflix acquisition is a waste of money.

    3. It’s Silverlight on their site, but not on mobile devices or Smart TVs, gaming consoles, or Apple TV. I wonder what percentage of content is streamed to devices vs. netflix’s site

  1. Apple should buy Netflix because Netflix figured out how to implement the FB API and share data? OR, did I miss something?

    I can’t really see Apple wanting to get into the “Mail DVD’s” biz. Other than (mailing DVD’s) what does Netflix do that Apple doesn’t already do? Yes, I know NF has a subscription system for stream shit (B-Movies). This is what Apple would shell out $ for?

    It is to soon for April Foolsday so Cramer must have penned this from Colorado (because it is now legal there)

    1. Your vile language tells us why you know nothing about Netflix. It is not about mailing DVD’s. There are thousands of tv shows and movies from all around the world that are only available on Netflix. Many are produced for Netflix. It is making cable and tv networks obsolete.

      1. “vile language”?
        Really? I said ‘shit’, that is “vile language” to you?
        Oh, grasshopper you need to get out more if you find the word ‘shit’ vile.

        Now on to your kinda valid point, yes Netflix has some deals with content providers that Apple does not have. However, that is not a reason to BUY Netflix, it is a reason to come up with similar deals with content providers.

        See, other then mailing DVDs Apple provides the same service as NF sans the subscription model. Just in case I went to fast for you, it breaks down like this; NF streams content, Apple streams content (so does Youtube, Amazon, Hulu, et al)

        I have been a NF subscriber (streaming only) for a couple of years and IMO other than the occasional gem, most of the content NF provides for streaming is B-Movie shit. Ooops please forgive me for my “vile language” shite (or poopie if you prefer)


        1. G, what ou totaly don’t get is sure apple has the same services (kinda) as NF the same way the MySpace had the same service as FB….or G+ for that matter. It depends on your market penetration. AAPL will pay twice NF value to add that much subsciber base.

      2. And Netflix’s content expenses are rising faster than their subscriber adds. These expenses are rising because Netflix’s competitors are willing to pay extra to gain exclusive access to a particular studio’s library. Starz recently inked a new content deal with Sony that grants them exclusive access to Sony Pictures’ recent releases and library titles, and shuts Netflix out. And Netflix secured a similar deal with Disney to the tune of $300 million a year.

        All the while, Netflix is now trying to retain its subscribers by producing original content. If all this sounds familiar, it’s the exact same pattern that occurred with premium cable channels. HBO, Showtime, and Starz each have exclusive content deals with different studios, and they produce their own programs to attract and retain subscribers. In order to watch all of the recent releases from all of the major studios, you need to subscribe to every channel.

        Soon, streaming video content will have the same arrangement — in order to get streaming for all of the recent studio releases, you will need to subscribe to multiple services. And you still won’t gain access to the original programs from these premium providers, since they integrate those programs into their streaming platforms.

        Rather than make cable and TV networks obsolete, Netflix is actually becoming more and more like them.

    1. Actually, the content contracts are part of Netflix’s value chain. They don’t go away just because Netflix has a new owner. For example, the existing content deals IMO were the big reason why Dish Network bought Blockbuster. Blockbuster retail locations have no value to Dish whatsoever. However, Blockbuster’s content deals would allow Dish to broaden and expand its streaming offerings. With all the talk about Netflix and Amazon, Dish/Blockbuster is actually the dark horse because it has a broad library already in place and ready to go if they get their act together on offering a competitive streaming service.

    1. Indeed!

      From ‘Steamboat Willie’ a landmark film notable for being one of the first cartoons with synchronized sound to present Pixar and the Disney Channel, etc. The theme parks, movie catalog and show rights, classic characters copyrighted too numerous to mention.

      When I think of past visits to Disney World Apple naturally comes to mind.

      The same mojo.

      The same attention to detail.

      The same wondrous experience.

      Netflix and Adobe are worth consideration — but agree Disney is THE ONE.

  2. I don’t know about buying Netflix but I would certainly think Apple could make those same negotiations Netflix has and build a far better hardware infrastructure than what Netflix has. Apple would almost instantly have a higher subscriber count than Netflix has. If they’re saying that Amazon can put pressure on Netflix, then surely Apple would be able to put that much more. In theory, Apple could afford to charge only $6.99 a month than $7.99 a month, especially if Apple is able to purchase a larger catalog. I don’t think Netflix would stand a chance, at least not to the tune of $200 a share’s worth.

    I really just don’t get Apple for ignoring this market and then pondering what to do with all that cash. To me, it just reeks of stupidity or imagination, although I’m not privy to Apple’s “big picture” if there actually is one. I’m just frustrated as to why Apple doesn’t go for some easy revenue if it’s main franchise is being eaten up as the news media says. Netflix shareholders are doing fabulously and yet with Apple having all that cash and an already huge credit card base, I just don’t understand what the problem is stopping Apple from going into the content streaming business aside from possibly not having enough personnel to manage it.

  3. This ‘horde’ of cash of Apple’s must be burning holes in every pundit’s pockets out there. They can’t wait to spend Apple’s money. Netflix is an OK company but they are not close to Apple’s DNA but are close to what I would like to see Apple do.

    I would like to see Apple buy or get distribution contracts for a massive amount of video content and package it with iAds to pay for it with extremely well targeted personal ads. For those who don’t like ads, Apple could have them pay a small amount for each show watched. Apple needs to get both current content (news and shows) as well as an archive of older shows. The delivery must be time independent like AppleTV.

  4. technical issues apple can implement on their own so no need to buy Neflix
    , other people say apple should buy neflix because of CONTENT

    but the content will dry up once apple acquires it

    Content providers are paying hardball with apple. Listen or watch the numerous conference calls, press interviews, content providers (film companies etc) have said about apple : “We do not want be like the music guys whom Apple control via iTunes. ” Practically every TV, Film boss has said they prefer multi channel distribution vs Apple Lock (like iTunes controls the bulk of music distribution). You can watch videos where they flat out say they say they much prefer other distributors like cable channels than Apple. They are absolutely terrified what happened to record labels and the phone carriers (they are now dumb pipes with the start of the iPhone. Carrier bosses are pushing android to dilute Apple’s hold: see phone sales vs iPad sales which they don’t control ).

    (Music labels at one point hated Apple so much they sold music to apple at a much higher rate they sold to amazon. One Apple exec complained that Amazon could SELL music cheaper than the price Apple got from the music label. In spite of that iTunes beat Amazon… )

    If apple got Neflix, content providers will start putting squeeze on limiting content to it so theres no advantage but a waste of money buying it.

    Cook said that apple is already buying a company a month on average. Buying small tech companies (chip companies, flexible screen tech, wearable computing etc ) and having exclusive partnerships with manufacturers seems much better use of cash.

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