Before anybody gets too happy, or freaks out too hard we’ll get this out of the way first: there aren’t currently any rumors of an Apple and Netflix merger, this is all conjecture based on similar speculation by a contributor on Forbes. With that said, would Apple have the guts to make a serious offer to buy Netflix?
As recently as a few days ago, chatter around the Applesphere was that the tech company was considering jumping into the streaming business to compete with the likes of Netflix, Google, Amazon, and others. This theoretical service would have been announced alongside the iPhone 7, and Apple was reportedly already negotiating with the various Hollywood contacts that would need to be on board for such a streaming service to get off of the ground. If that weren’t enough, rumors were also swirling that Apple was looking to get into the original programming game too. The biggest players in this space were already doing so, why not Apple too?
Jay Somaney, a contributor at Forbes simply asked the question: Why not just buy Netflix and immediately launch yourself to the top of the streaming service pile? Most of the implied reasoning was due to stock prices of both companies having less than stellar openings to 2016. We know what Apple has done to try and draw attention away from their own slumping sales. In his reasoning behind such a merger, Mr. Somaney even suggested that such a deal could improve Apple at the top, with Netflix CEO Reed Hastings a more than suitable replacement for Tim Cook:
From a Netflix shareholder’s point of view, not many shareholders would complain about an immediate 50% or higher pop in the share price. In addition, even shareholders of Apple would be excited about the possibilities of a combined Apple and Netflix especially if one thinks of Apple-as-a-service company, which is how Tim Cook wants shareholders to view Apple in any case. In addition, Reed Hastings, who owns about 2% or so of Netflix, would be a hugely important addition to the Apple management team. Of course, the issue of Reed’s position at the combined company would have to be sorted out. As a shareholder of both companies, I would take Reed Hastings over Tim Cook as the CEO of a combined company everyday and twice on Sundays. After all, Reed built Netflix from scratch while Tim Cook seems to be content getting rich off an “inherited” legacy.
The main benefit for this deal from Apple’s perspective would be in the connections Netflix already has with the movie and TV industry. Apple obviously has a lot of pull, but with Netflix getting most of the dirty work out of the way, Apple could simply swoop in and potentially help make existing deals even better with their mountains of cash.
For Netflix, an Apple merger could provide an injection of funds to continue and make more original programming. Netflix Originals have mostly been fantastic, and additional funding could always create more original content.
What about for consumers? Netflix is already a very popular service in its current form. Would the promise of more original programming, or the possibility of Apple using their clout to hold on to content from other networks be appealing? One potential pitfall that Mr. Somaney certainly fails to mention: Netflix through iTunes… nobody wants that. Nobody would ever want that.[button link=”http://www.forbes.com/sites/jaysomaney/2016/01/31/apple-could-leapfrog-amazon-google-and-alibaba-with-a-netflix-acquisition/#4ae34d606736″ icon=”fa-external-link” side=”left” target=”blank” color=”285b5e” textcolor=”ffffff”]Source: Forbes[/button]
Last Updated on February 1, 2016.