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Analyst: Apple Should Acquire Netflix

Apple, who recently revealed another outstanding quarter’s financials, is sitting on a war chest of more than $50 billion (yes, billion) dollars. With one of the world’s most successful companies holding on to that kind of cash, it’s inevitable that the industry will be abuzz with possible candidates for acquisition.

Names such as Sony, Facebook and Yahoo have all been thrown around as possible M&A targets for Apple, but it’s also possible that Steve Jobs and co. could have their eyes set on streaming and DVD-by-mail powerhouse Netflix.

Brian Marshall of Gleacher & Co made his comments during a recent interview on CNBC (Apple discussion begins at about 1:34), saying that Netlfix’s large library of titles makes it a tempting target for Apple. Said Marshall:

“I do think that [a Netflix] transaction could make sense . . . You know, Apple wants to be the first company (in my opinion) to seamlessly integrate the home office and the living room. And what’s limiting them in terms of doing that now is basically content and better broadband into the home. . . If you look at content, they have over 10,000 movie titles on iTunes. Netflix obviously has over 100,000 movie titles. I think that would be a pretty interesting marriage right there.”

Do you think Apple has Netflix in its sights, Insiders? What would be the upside for the tech giant in such an acquisition?

(via The Mac Observer)

16 Responses to “Analyst: Apple Should Acquire Netflix”

  1. Member [Join Now]

    I hate Apple, I refuse to buy anything that Apple makes. Apple is a company that does not have the consumer in mind at all. Businesses should make money but provide a good service as well. Apple releases the same products over and over because they are greedy. The Ipod does everything but make calls and the Iphone does the same, lol. The Ipad has the same components because…. yep there is an app for that. Itunes is beyond expensive and that is why they have a limited catalog; there are musicians and studios who will never do business with them. They would be bad for Netflix, in fact they may lose all the growth Netflix has seen. Netflix gains followers because of the app is available but the majority of customers I know who have Netflix would not buy Apple things because they are too expensive. I would cancel my service. But this acquisition could result in other companies providing better/cheaper services similar to Netflix. I cannot see what Apple or Netflix would gain because they could easily start their own Netflix-like service for cheaper. The odds are that they will not maintain the same customer growth or loyalty because Apple is a different type of company, run very differently. Netflix might need access to more programing but they would not get it from Apple.

  2. Visitor [Join Now]
    will [visitor]

    In a word, no. As successful as Apple has been, they have had a spotty record at best with acquisitions. Not surprising, actually, since integration is a very difficult process that only a small percentage of companies manage well. Case in point:

  3. Member [Join Now]

    Not a fan of Apple. Too dictatorial as far as content goes.

  4. Visitor [Join Now]
    JBG [visitor]

    Apple acquiring Sony?? Sony is over twice the size of Apple and has much more diverse operations, and even though Sony is losing money now (-5%) and Apple is making (+15%), it’s quite ridiculous to think that could be possible. Apple might be doing well but it’s a company that targets a snobby customer base and that has its limits. Amazingly, as former communist societies have shown, in difficult economic times, people focus on small luxuries, and Apple is banking on it now, but just a decade ago Microsoft had to bail out Apple so it wouldn’t lose it’s only competitor and be accused of antitrust violations. The “boutique” approach has limited application in the world of technology and Sony is so much more than that – just one example: one of the world’s largest suppliers of electronic components (from cathode ray tubes to LCD panels, from VCR to flash memory standards, etc.)

  5. Visitor [Join Now]
    The Deuce [visitor]

    With due respect, I disagree with earlier posts.

    @ amtj03: Good Luck with that. You will be assimilated. Resistance is futile. I was a die hard PC guy all through college and for ten years in business. I always needed the tech guys to help me with minor crashing issues and what not. I bought a Mac for personal use and knew more about computing with a Mac in a single month than I ever learned about PCs. You don’t think they have the consumer in mind? Tell that to my senior citizen parents and downright elderly grandparents that are FINALLY figuring out email and networking because they got a mac. They are so intuitive.

    @ will: You may be right. But Apple knows a good thing when it sees it. I don’t see this as a full on acquisition, but a merger. Apple needs Netflix’s library of movies. Netflix could sure use Apple’s hardware and delivery methods (itunes, Apple TV, computers, etc). This could be a very good thing for both parties.

    @ s142424: That’s good business. Otherwise you water down the brand. Look at PCs. They are losing market share hand over fist because Apple’s figured out how to integrate multiple software applications easily, seamlessly, and intuitively.

    @ JBG: You, too, could be right. Sony is big. I don’t see Apple looking to them as much as I see them wanting Netflix. It just doesn’t make sense. The fact that you think the company targets “a snobby customer base” says more about you than you may think. Apple targets the every-man. The one that doesn’t necessarily care about computing, or ram, or HD space. They make computing very easy and they do it well. To do so, they have to be a little more spendy. But consider this: I spent roughly $1,000 on a new Mac laptop two years ago. It still runs fantastic, is far from obsolete, and computes circles around my friends’ equally aged PC laptops. They, on the other hand, have had to do software upgrades every six months just to keep up, and have taken them in for repairs about as often at a cost far exceeding their initial savings.

    Remember, the bitterness of buying poor quality lasts far longer than the exhilaration of a good deal.

    Mac may have struggled in the past, but they are gobbling up market share because they are a better product. The “snobby customer base” is getting larger and larger than the “do what you’ve always done” market base every year.

    Think about it.

    My thoughts: Netflix will be a good merger. Sony, not so much.

    • Member [Join Now]

      Honestly, you do not know me at all to make any hypothesis that this will happen. Macs were the first computers I had ever used and I hated them; that is why different version of the same product exist. These are products that always result in another option, it is not an OR situation; so assimilation is not required or necessary. You spent $1,000 on a new mac, I brough my Dell for $600, new, almost 4 years ago. Has it given me any problems? nope and I will not have to buy a new computer or laptop from Dell until 2012; which is only because I want to. People have a habit of forgetting that everyone is different; YOU think the Macs are intuitive so YOU have assumed this to be the same for everyone.

      Most people do not want to use their laptops to watch TV; in fact Apple is no longer remembered for being the company that makes Macs. The Iphone, Ipad and any device from Apple that will feature Netflix; will be beyond expensive. In order to upgrade/add with Apple; you buy a whole new device, that is how Apple works. How could having to pay $500-1000 for a device and still have to buy apps to use it; be consumer friendly? So now that device actually cost double. The new Iphone was released even though they knew it was not up to par completely; all because of the bottom line. Itunes and the company are not consumer friendly. You need their products in order to use their service and the whole thing is fade related.

  6. Visitor [Join Now]
    JBG [visitor]

    The Deuce, if only your statements were based on facts and not your skewed views and limited observations… You don’t have to have followed Apple since its inception as I have (actually using their products side-by-side with others) but a simple Internet search would show you how, despite their successful business strategies, Apple has struggled to gain the consumer confidence. Yes, their products might be nice, cool and easy to use, but if you look at the actual market penetration numbers, you will see that there have been many ups and downs, but never any steady rise. In fact, Apple was the most influential in the 1980s, their current level is nowhere near it. It’s not a matter of good or bad, the consumers are voting with their actions and Apple is so much behind – and not because they got a late start, like some like to think, they are just behind because that’s where they belong. Good business (read, making money) does not always equate with broad market acceptance.

    • Visitor [Join Now]
      L2B [visitor]

      I’m not sure which Apple you’re talking about when you say “…but if you look at the actual market penetration numbers, you will see that there have been many ups and downs, but never any steady rise”. If you’re talking only about Macs, then you can make the case that they haven’t truly grown their market share since the beginning of Apple’s existence and in fact has lost it because early on they had a very large market share.

      Now let’s look at Apple as a whole company. They continue to report record profits. Record profits means they’re selling stuff. To someone’s point earlier, there must be a lot of “snobby” customers who like Apple products for them to keep report record sales and profits during an economic downturn. All of Apple’s major product segments (iPod, iPhones, iPads, Mac, and iTunes) continue to grow year over year. Forecast for Apple’s 2011 sales for iPhones is 100 million and 45 to 48 million for iPads. That sure seems like a company that’s growing and gaining market share. In addition the iPod line is 80+% of the market share.

  7. Visitor [Join Now]
    dirk [visitor]

    If Apple merges with Netflix, we’ll see Apple’s business motto of “we know what’s best” transform the company. People will hate it, Apple won’t care and people will cancel their subscriptions. Apple has always seemed to me to be an inflexible company that’s why I can see them destroying netfilx.

  8. Member [Join Now]


  9. Visitor [Join Now]
    Rovertech [visitor]

    amtj03, you are wrong about everything. Apple is a fantastic company. Good luck with trying to convert people to your apple hating mentality, it won’t work. Apple is gaining market share in every area.

    • Member [Join Now]

      This was my opinion, I am not trying to convert anyone. I, unlike some posters, can only speak for myself and how I feel. But I think you should take a real look at Apple; they are not favored anywhere but America. A place were if the product is expensive and wanted; people will buy it. America is a place all about consumerism. No need to bring up market shares because that is a bust. Any company can be hot and then cold at the drop of a pin.

      My opinion cannot be wrong, if it is; yours is as well. Facts can be wrong but you cannot prove me wrong in this instance because Apple does not have high consumer approval. Can you upgrade any device Apple makes? oh and buying apps is not upgrading. You need an app to make everything work on their products. Can you buy more memory? Nope. How many musicians and studios refuse to allow their product on Itunes? Itunes is required pretty much for their Ipods to work, you might could use other services but it takes away from the devices simplicity.

  10. Visitor [Join Now]
    Buttholez [visitor]


  11. Member [Join Now]

    Itunes rents movies, if they were to take over Netflix don’t you think that would put a big damper on the movie rental business and also there movie download for sale business, they are just trying to build that part up with all the new stuff in Itunes lately. I really don’t see this being a good partnership of two businesses????

  12. Visitor [Join Now]
    john [visitor]

    I love my iPhone, but I hate Steve Jobs and Apple. Apple would ruin Netflix.

  13. Visitor [Join Now]
    Blue State [visitor]

    I haven’t used any Apple products besides Itunes and if that is any indicator than I am not interested. Not only am I forced to download this bloated application that includes a ton more crap than I want to look through (and which requires updates all the time) but the songs are overpriced, encoded in only 128kb AND they are DRM protected. No thank you!