Rumors keep flying: Apple reportedly considering acquisition of Netflix

This has been a packed week for Apple talk, with rumors that the company could be working on an Amazon Echo competitor followed closely by a report saying the company considered a buyout of Time Warner late last year. That may not have happened, but the company could be considering an arguably more interesting acquisition.

The same report detailing the talks of a Time Warner acquisition also cites unnamed bankers who have worked with Apple saying that the company is considering purchasing Netflix, Fortune reports. While this would certainly be a hefty purchase — Netflix has an enterprise value of $43 billion — Apple can afford it, with $230 billion on hand just in case.

Rumors of Apple at least considering a Netflix buyout have been floating for at least a year. Last month, those rumors got a slight boost when CEO Tim Cook said the company could “definitely buy something larger than we’ve bought thus far,” and Netflix would definitely fit that bill.

There are multiple reasons why such a bid would make sense for Apple. Since last year, the company has reportedly been working to launch an internet TV streaming service, but has been hamstrung by an inability to make the deals necessary with content providers. The company is also increasingly looking toward producing its own original video content. Netflix certainly has experience with the latter, and may be able to offer certain inroads toward deals with content providers that Apple might not be able to manage on its own.

Whether or not Apple is actually pursuing a Netflix purchase, or if this was a discussion similar to the Time Warner plans that were dropped likely, won’t be confirmed anytime soon , but at least in the short term, Netflix is reaping rewards from the rumors. Following the report, the company’s stock rose by four percent.

With iPhone and computer sales starting to decline, Apple seems to be increasingly looking toward becoming more of a services company, and TV is definitely an area the company is pursuing. The only thing that remains to be seen is exactly how Apple is planning to move forward.

from Planet GS via John Jason Fallows on Inoreader http://ift.tt/25l01iM
Kristofer Wouk