Apple Acquisition Targets: Part One: Netflix

by Hadley Stern Dec 06, 2010

Apple has a ridiculous amount of cash in the bank: 50 Billion or thereabouts. Historically, the company hasn't done large acquisitions á la Oracle, which seems to swallow up a big company every other quarter or so. But with some fundamental changes in the way media and content are created, now may be the time for Apple to step up to the merger and aquisitions plate.

Without further delay I present, Apple Acquisition Targets:

Part One: Netflix

Why it makes sense

Netflix, in a few short years, has completely rewritten the world on renting a movie. With the recent collapse of Blockbuster the notion of going out to rent a movie is all but dead. Yes, niche players like Redbook and your Indy movie rental store will live on (for now) but Netflix is here to stay.

Well, one part of Netflix is. Inevitably, as the months pass Netflix's physical DVD program will slow down, and its streaming applications will grow. Exponentially. This growth is inevitable. Why?

Because there is nothing technical stopping us from having every movie, song, or piece of digital media available to us through one interface. Nothing but lawyers and licensing agreements. And, inevitably, although slowly, these barriers will come down.

Once this happens the prize will go to the provider who can give the best user experience to consume all this media, and this is where Netflix comes in. There are three reasons Apple should seriously consider buying Netflix:

1. The Netflix recommendation engine, which only gets better and better, will become more and more important as more and more media becomes digitally delivered.

2. Netflix's subscriber list of millions would immediately add, once converted, to Apple's iTunes list.

3. Netflix has a well-placed multi-device strategy and implementation which Apple could immediately leverage. Just like Apple had to release iTunes for Windows, it needs to expand to all the various media consumption devices out there including PS3, Roku, Wii, xBox, etc.

Why it's a bad idea

1. Apple's current business model depends only on purchases and rental, not an all-you-can-eat media meal plan. I'm not privy to the reasons behind this, but will plead the bloggers equivalent of the fifth and pontificate. There are 2 reasons I can imagine why Apple hasn't streamed yet: the first having to do with the kind of deals Apple was able to negotiate with all the content providers. I bet Apple, in order to get the big media companies to sell their content through iTunes requested no streaming. Or perhaps, Apple has run the models and realized that it can't possibly make as much money by offering streaming.

2. Apple doesn't need Netlifx, it can simply kill Netflix. The recommendation engine is akin to the genius offering in iTunes. All that is missing is streaming. But Apple is building a huge data center in NC for something, could it be streaming?

I go back and forth on this one. Right now Netflix has the momentum of the inevitable shift from physical media and cable TV to a digital delivery model. But Apple has had a lot to do with this shift with the iTunes/iPod model, and it doesn't appear to need Netflix to get into the streaming game.

What do you think; would acquiring Netflix be a strategic advantage or a waste of money?

Comments

  • Thanks for sharing your article; it’s very nice, thanks. I hope can read more good articles Pocket Folder Printing || Pocket Folders

    poppva1 had this to say on Sep 23, 2011 Posts: 16
  • Such as this web-site your web site is 1 of my new most popular Cheap Paul Simon Tickets.I similar to this information shown and it has offered me some sort of ideas to possess success for some cause, so keep up the excellent work! Cheap Journey Tickets

    Priya had this to say on Sep 27, 2011 Posts: 20
  • Unlike other your piece of writing has a zeal that matters to your readers.it works according to the needs.
    Buy Assignment

    xenshun had this to say on Oct 04, 2011 Posts: 7
  • Not everyone can provide information with proper flow. Good post.
    assignment writing

    xenshun had this to say on Oct 04, 2011 Posts: 7
  • Nice, accurate and to the point.I am going to save the URL and will definitely visit again.
    Assignment Help

    xenshun had this to say on Oct 04, 2011 Posts: 7
  • Such as this web-site your web site is 1 of my new most popular.I similar to this information shown and it has offered me some sort of ideas to possess success for some cause, so keep up the excellent work! Friendship quotes

    jimee had this to say on Oct 04, 2011 Posts: 3
  • I believe the key is in being passionate about what you write, being focused, and being dedicated to get the work done. Of course, you an write about pretty much any topic, but you need to have faith and ability to get the job done.
    Help With Dissertation

    justinadelpha had this to say on Oct 10, 2011 Posts: 2
  • keithcurle had this to say on Oct 18, 2011 Posts: 4
  • I think it really is a hardware company and only platform that can offer both iTunes and Netflix for its portable devices have an advantage.
    Xbox live code generator

    Jackysoom had this to say on Oct 28, 2011 Posts: 76
  • Page 2 of 2 pages  <  1 2
You need log in, or register, in order to comment