A chance for an Apple buyout offer as Netflix stumbles

“Netflix Inc. has either hit a huge bump in the road, or the dynamics of its growth have changed completely. Either way, its stock sold off in double digits after its earnings announcement, which makes it cheap, according to analysts, who say the sell-off is an overreaction,” Douglas A. McIntyre writes for 24/7 Wall St.

“Either way, Apple Inc., by far the most likely owner of Netflix, other than Netflix shareholders, has a unique opportunity to make the most important M&A move in its history and bulk its increasingly important content business,” McIntyre writes. “Netflix’s market cap was cut to $35 billion, and its share price dropped close to its 52-week low. Money is not a problem for Apple. Its market cap is $550 billion, and it has $225 billion in cash, short-term and long-term investments on its balance sheet.”

“Apple is faltering on two fronts,” McIntyre writes. “A buyout of Netflix would more than steady it on one of them. That would leave ‘only’ the iPhone 7 problem.”

Read more in the full article here.

MacDailyNews Take: Apple is not “faltering” on any front. iPhone 7 will not be a “problem.” And, as we wrote back in May:

What is unique about Netflix? A handful of TV series are not worth $40 billion. Apple is perfectly capable of taking on Netflix without having to buy them, deal with integrating their employees, etc.

Until Apple actually buys Netflix, we’ll keep saying that Apple will buy Netflix for the same reason they bought Palm.

Should Apple absorb Netflix? – July 11, 2016
Apple to buy Netflix? – May 27, 2016
Should Apple buy Netflix for $53 billion? – May 10, 2016
Why Apple should buy Netflix – January 7, 2016
Apple’s move into content creation could devastate Netflix and Amazon – September 1, 2015
Why Apple should buy Netflix – April 21, 2015
Why Apple should buy Netflix – March 26, 2014
Jim Cramer: Apple should buy Twitter or Netflix to spur growth – February 7, 2013
The Netflix buyout battle: Apple vs. Time Warner – April 10, 2012


      1. Nahhh. Apple licenses ARM’s OS with rights to modify it. Apple then owns its work product into perpetuity.

        Apple gets what it wants this way, without spending Billions. Smart.

        1. If the phrase ‘into perpetuity’ is correct, then I’d safely concur. The worry, of course, is what’s going to happen to ARM in the hands of a foreign company without a stake in ARM’s future. But if Apple has the contract and ARM’s invention will not be disrupted…

    1. I have been streaming Netflix for about ten years. Over the last couple of years the grade of movies has significantly decreased, and, as a result, I have been watching HBO Go two to three times more than Netflix.

  1. I think Apple should offer a subscriber price for movies and TV shows on ITunes.. Instead of Rentals, they already have a catalog, How well it compares to Netflix or Amazon, not sure.. But all they need to do is offer a monthly streaming price, and let people stream anything in their existing catalog, the Apple Video Service… They can still sell or rent for those that don’t want to subscribe to streaming.

    1. “But all they need to do is offer a monthly streaming price, and let people stream anything in their existing catalog, the Apple Video Service…”

      Except that Apple doesn’t have ‘streaming license’ for those items they currently sell/rent; a completely separate negotiation with the current rights holders. However, if Netflix is truly taking more than a temporary tumble, perhaps their demise will improve Apple’s negotiating position.

    2. As a shareholder I say NO with a capital N. Netflix is not making a profit and is burning cash to stay open.

      Apple has a much larger library of much higher quality than Netflix. This is because the studios more from Apple than they do from Netflix. There is absolutely no benefit to Apple in buying Netflix, or changing its business model.

  2. I downloaded the Netflix app for a month…watched a few movies I wanted to see again. After a month, I canceled…yawn…boring! Apple would be stupid to buy Netflix this late in the game…a couple of years ago…yes…but today…absolutely not…it is ancient.

  3. Apple does not need to buy Netflix. Apple certainly doesn’t want to buy a failing company that is losing money either. iPhone 7 isn’t even out so how can it be faltering in any shape or form. Rumors of features and made up photos don’t make the real thing and should never be thought of as fact.

  4. A huge waste of money. As soon as Apple were to acquire Netflix the stock would become practically worthless. It would immediately be compared to Amazon Prime Video and Bezos’ would automatically get the nod. It’s current value would merge into Apple’s huge market cap and barely add anything to Apple. Apple doesn’t need Netflix. With Kodi and all the video add-ons available, hardly anyone needs Netflix.

  5. This is still a terrible idea.

    The moment Apple buys Netflix, Netflix would have to renegotiate contracts with all of its content providers. And, it would no longer be negotiating as Netflix, the independent and a relatively small company that does nothing but stream video, it would be negotiating as Apple, the behemoth which every other media company fears has too much power and influence already over media and multiple related industries. Apple will not get as nice or generous deals from the all major media companies who own Netflix’s content.

    After negotiating with content providers, the content available on Netflix would be sure to plummet, and the subscription price likely to skyrocket too. And what would Apple have gained from this? They already had Netflix as a compelling feature for iOS and Apple TV. If Apple then killed Netflix service for rival devices, all the content providers will migrate to Hulu or some other thing Apple doesn’t control, making Netflix even more worthless then already was. Apple would have spent $40 billion, gained nothing of value, and lose Netflix in its current form as a compelling feature on iOS and Apple TV.

  6. It’s sad to hear Netflix has overextended its expenditures. However, WHY would Apple want to buy Netflix and thereby screw up its relationships with other media vendors?

    This whole concept sounds nuts to me:

    “Apple is faltering on two fronts,” McIntyre writes. “A buyout of Netflix would more than steady it on one of them. That would leave ‘only’ the iPhone 7 problem.”

    Apple is ‘faltering’ because the media industry stubbornly remains stuck in the 20th century? I think not. There is ANY iPhone 7 problem? I think not. Is this click-bait, messed up thinking, meme mongering or what?

    1. Totally agree. Apple movie streaming sucks ass. It took Star Wars about 7 hours to start playing on 10 Mbps, which is the only wifi I can get in my location. All other streaming services start their content within seconds.

      1. Once I got the speed up to 10Mbs+ I discovered a trick. The problem with the whole thing is the “spurts” of data and then it “stops” then it spurts another couple minutes of the movie and stops! — this tells Apple TV it’s NOT RELIABLE to stream, yet. I’ve literally downloaded 3/4 of a movie before it worked one time. Here is the trick: 1) if resuming a partially played movie: go back (menu). Play/”start from beginning” — give it a sec/STOP (menu) / Play/Continue movie and it works everytime. 2) Some combination of the above got it to start before for me/ or start process and go back and leave it alone and surf/ watch netflix and it will come and tell you it’s ready to play and do you want to watch it now? Apple should fix this stupid glitch for low speed customers. it’s supposed to work on 5-8Gbs for HD. FYI

  7. Netflix has the streaming thing figured out, whereas Apple TV needs to be set for either HD or SD Etc. The people with low bandwidth/low speeds need the Netflix “instant stream and I’ll take it to HD once connection is good capability.” I have suffered many a night in my theater room wishing I had the 2-3hrs to wait for my HD movie to start, thank you very much Apple! This is a NO BRAINER! And I’m so over the limit on being upset about it, that I can’t even rant anymore. Our home was built 10 Yrs ago when Comcast was considering BK and so our entire street has to rely on “5-15 down” service. Finally, Vivint brought better speeds to our neighborhood but I’m sharing speeds again and just recently had a 2 he wait time for my Apple TV to start streaming. I’m going catatonic.

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