Why Apple should buy Netflix

“If Apple wants to launch a subscription video service, there are really only two options: traditional Pay TV or subscription video on demand as offered by Netflix, Hulu, and Amazon,” Jan Dawson writes for Tech.pinions.

“As the market leader and now the first global pay TV service, Netflix is in some ways pioneering what Apple might ultimately try to build itself and has a huge head start over anything Apple might build,” Dawson writes. “Acquiring Netflix would fill the strategic hole around subscription video, while also bringing on a fast-growing and potentially lucrative revenue stream.”

“Do I think Apple will actually do this deal? In all likelihood, no, though I wouldn’t rule it out,” Dawson writes. “But in a world where services like Netflix are taking over from the traditional pay TV, it would make a lot of sense for Apple to use some of its huge cash pile to bring the market leader in-house and plug a strategic hole at the same time.”

Much more in the full article here.

MacDailyNews Take: A big acquisition would certainly shake things up, but judging by the recent quotes we have from CBS Corp. CEO Les Moonves, Apple is close to getting the deals they want. “It will happen” is pretty unambiguous.

Of course, Apple’s Internet TV service will have to have ESPN. It will also likely require the “Big Four” networks (ABC, CBS, Fox, NBC) – although it could launch with three out of four and eventually hammer out a deal with whichever one is being the most reticent. That said, having already missed the launch of the new Apple TV, Apple might as well wait until they have a full dance card.

What others should be considered to be must-haves?

Beyond the Big Four, if you go by primetime ratings (total viewers), the top 20 U.S. cable networks are:

1. ESPN
2. Fox News Channel
2. USA
3. TBS
4. Disney
5. Discovery Channel
6. History Channel
7. TNT
8. HGTV
9. Nickelodeon
10. AMC
11. Adult Swim
12. FX
13. Cartoon Network
14. Food Channel
15. Lifetime
16. ABC Family
17. Syfy
18. TLC
19. Hallmark
20. Investigation Discovery

Source: Nielsen estimates, Live plus-3 for Dec. 29, 2014 – Dec. 16, 2015 (M-Su 8-11 p.m.)

SEE ALSO:
CBS CEO Moonves says Apple puts live TV service ‘on hold’ – December 8, 2015
Fox’s James Murdoch, CBS’s Les Moonves hint at looming Apple Web TV service launch – November 5, 2015
CBS CEO Moonves says Apple TV content deal is likely – October 14, 2015
CBS CEO: We’re still in negotiations with Apple over new Internet TV service – May 27, 2015

26 Comments

    1. “I don’t consider Netflix and Amazon subscription services. “

      What would you consider them?

      “Plus, I have been less and less enchanted by Netflix and Amazon the longer I subscribe to them.”

      That’s because The Princess Bride isn’t on either one of them.

    1. Up to 5 or 6 years ago or more when it was talked of I might have agreed with you. But even though I love my Tivo over what I had before especially, it also, despite years of refinement, has various flaws too, especially in its interface. And I don’t see anything that Apple couldn’t (at least on its good days) do better now its got as far as it has with Apple TV. Tivo for all its qualities just doesn’t seem like anything special in this growing new World of Media and certainly not like it did felt back in the day.

  1. It’s been so long since I thought of television in terms of channels I couldn’t possibly care less. You have to start separating content from networks in your mind. You probably don’t care about 90% of the content on any of your favorite networks, just a particular program or 2. Most of the time these can be found elsewhere online. If you also give up the idea that you need to see content when it is first aired, you can save lots of money.

    I.e. I might get around to binging Walking Dead this year, or maybe Breaking Bad.

    1. Yep. I’ve thought all along that Apple should provide the UI for the networks to follow and make their own App for each. (We don’t want them all doing it on their own from the ground up – would be a cluster of bad UIs that way.) Then within each app, pay for the channel, or better yet, the shows/series you want to watch.

      Unfortunately, that is likely to be more expensive than the proposed bundles unless you literally only watch one or two shows. That’s why the bundle will likely still win.

  2. It’s unlikely Apple acquiring Netflix would help Apple’s value any. I believe any smaller company Apple buys will be instantly devalued as being a very small part of the larger whole. No smaller company Apple acquires will be considered a worthwhile revenue additive as far as Wall Street is concerned. Besides, does Apple really need to acquire Netflix when it can easily cut its own movie and TV content deals. Amazon has done it and I’m sure Apple could do it just as well.

  3. Apples bundle efforts will it be a set bundle of channels or will it be a set number from a greater choice for the user to decide between. If its the former I just can’t see much benefit for most people as few will get the choice they actually want just a bit of a reduction on the overall cost of it.

  4. If the current rendition of WallNut Street is headed into a crash, if I was Apple I’d hold out until everything hits bottom, THEN consider what to buy. I’d also keep ‘out-of-focus’ acquisitions at arm’s length so as to not infect the Apple work culture, which generally, mostly, needs not improvement or undermining.

    Buy Netflix? Maybe.

  5. Apple would ruin Netflix. Netflix has prospered on small margins — something Apple has never done. Netflix delivers a lot of bang for the buck — something consumers love. Apple delivers a lot of bang but you pay big bucks for it.
    If Apple acquired Netflix, they would start monkeying with it, applying Jony Ives’ crappy interfaces, dropping popular programs (because they don’t want to pay the royalties), raising the price and driving down consumer satisfaction. The only benefit would be killing off a platform with which Apple can’t compete.

    1. I actually think that Netflix would offer Apple a lot of things, not least of which is a CEO who is experienced in acquiring content. However, valuation would be a problem, as a lot of Netflix users access the service through other platforms such as Roku, Amazon Fire, smart TV’s etc., and I don’t see Apple supporting those in the long term.

    2. Apple then would drop the sophisticated programming as well, where, as like with all of their pro programs, they feel they have to be “Dumbed Down” for their consumers. You know, we can’t expect the average multi-ethnic-whatever-blend- person in their ads to not feel like a special snowflake….

  6. One would also want a couple of real news networks. Fox (right wing entertainment) News won’t cut it. CNN International would be nice. Perhaps there are other news only options.

    1. Exactly. They should have bought it 3 years ago, or better still, launched their own version of Netflix on AppleTV at that time. They still could, and run it at break even, just to add more exclusive and non exclusive content.

  7. Apple should buy Netflix and even consider buying Spotify. They need to look long term because iPhone sales are not going to be good forever. The way it stand now that iPhone sale account for 65 to 75 percent of the company’s income. Apple can not depend on the iPhone forever and they need to devise other ways of bring in income as the iPhone begins to slow down. By them acquiring Netflix and/or Spotify will continue a steady stream of income for the company and could put it in a better position as a media provider for the broadcast networks to consider as Apple as a viable partner. As of right now the talks bringing OTT content is not working because the networks has the most user base. Now what would happen if Apple’s user base becomes larger? That may be the tipping point that the network providers my just sit back and rethink their position and Apple might get their OTT service.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.