“There’s lots of chatter about the potential of Apple buying Netflix. It comes from people who would benefit from such an enormous acquisition,” Daniel Eran Dilger writes for AppleInsider. “That includes investors who are long on the idea of Netflix continuing to expand its base of subscribers while incrementally charging them more, and longer on the idea of some magic bag of gold dropping down and buying their shares of Netflix. ”
“However, there’s little reason for Apple to be interested in buying Netflix. First, Netflix already has an incredibly high valuation greater than $150 billion, meaning there’s little potential for Apple to add any value and create any growth,” Dilger writes. “When companies spend $15 billion to take over large, existing businesses the way Google did with Motorola and Next [sic] [recte Nest], or the way Microsoft did with Nokia and aQuantive, it typically makes for a huge embarrassing mess. Apple buying Netflix would be ten times as bad. ”
“Secondly, there’s no reason to think that Netflix is doing something other companies can’t,” Dilger writes. “Apple already knows a lot about Netflix’s business, because it has been servicing its subscriptions in the App Store. While Netflix discovered some key insights about the market for non-linear television content, it’s not a complex mystery to duplicate what it’s now doing… The primary insights Netflix has discovered over the last decade of moving to mostly original content is that customers don’t want to wait for a show to be broadcast on what the company refers to as “linear TV,” and they don’t want to sit through ads. Most importantly, they’re willing to pay for those freedoms… There’s nothing really unique that stops other companies from copying the winning formula of producing and delivering good content, without ads, in a non-linear form that lets subscribers watch what they want, anytime they want, and get captivated with a production by binging an entire series.”
Much more in the full article – recommended – here.
MacDailyNews Take: Yup.
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. — MacDailyNews, May 27, 2016
It’s far less expensive to develop your own hits – Apple only really needs one hit to start – than to overpay for Netflix. — MacDailyNews, May 14, 2019
SEE ALSO:
Why did Apple create Apple TV+ instead of buying Netflix? – May 14, 2019
Apple’s biggest mistake under Tim Cook so far? Not buying Netflix – February 15, 2019
J.P. Morgan: Apple should buy Netflix, but it would likely cost at least $189 billion – February 4, 2019
Citi analysts: 40% chance Apple will acquire Netflix now that President Trump’s corporate tax cut has been passed – January 2, 2018
Citi: Apple 40% likely to acquire Netflix, 5% likely to acquire Tesla – May 5, 2017
Analyst: Apple could double dividend, buy Netflix with repatriated cash under President Trump’s U.S. corporate tax changes – March 17, 2017
No, Apple doesn’t need to buy Netflix – February 22, 2017
Why Apple should buy Netflix or something – February 22, 2017
Apple’s arrogance said to contribute to struggles to make big deals – February 15, 2017
Apple hires Amazon’s Fire TV head to run Apple TV business – February 8, 2017
Why Apple should buy Disney – January 26, 2017
Apple’s new TV app shows just how painfully behind Apple is – December 14, 2016
Apple approached Time Warner about possible merger before AT&T talks – October 21, 2016
Apple’s Eddy Cue: Nope, we don’t want to be Netflix – October 20, 2016
Google signs up CBS for planned web TV service to debut in early 2017; close to deal with 21st Century Fox – October 20, 2016
Bernstein: Apple buying Netflix would be a waste of $50 billion – October 5, 2016
A chance for an Apple buyout offer as Netflix stumbles – July 19, 2016
Here comes á la carte programming – without Apple – July 13, 2016
Should Apple absorb Netflix? – July 11, 2016
Apple to buy Netflix? – May 27, 2016
Should Apple buy Netflix for $53 billion? – May 10, 2016
Apple declines to place bid on NFL Thursday Night Football – March 3, 2016
Why Apple should buy Netflix – January 7, 2016
Apple TV 4 is a beta product and, if you bought one, you’re an unpaid beta tester – November 5, 2015
Apple made ‘audacious bid’ for Top Gear trio of Clarkson, Hammond and May, but lost out to Bezos’ 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
I am assuming this is a typo “When companies spend $15 billion to take over large, existing businesses the way Google did with Motorola and Next” Isn’t that supposed to be Nest? Apple bought Next from Steve Jobs correct?
Sure, why buy the market leader who has a years-long head start in the market when you can just decide to compete with them in a space they already dominate?
Which is pretty much what almost every content owner is doing right now. Eventually, Netflix will only have their own original content… and their own original content, while nice, is not worth $150 billion.
Yup, exactly. Netflix will probably be something I subscribe to for a couple months a year instead of all year. With only some decent original, losing disney, raising prices, too many foreign films, etc it makes more sense to just have netflix during some of the winter months to binge watch whatever good shows they have left.
Nokia docet
Yet another short sighted view of the competition. Netflix outwardly is a video lending/streaming company. Behind the curtain is where they are truly valuable. Anyone up to date on the video creation and streaming market knows that Netflix is essentially the leader in video compression and delivery receiving a nice chunk of their income from licensing related IP to others. Apple purchasing Netflix is more than the content but also the infrastructure and the IP R&D.