Should Verizon buy Netflix?
Rumors swirl that the telecom giant could acquire the red envelope. But such a deal could be bad for both companies -- and worse for customers.
On Tuesday, an investment banker told Bloomberg that Verizon is "very serious" about buying Netflix, sending a flurry of rumors flying across the tech world. Just last week, it was reported that Verizon was considering launching its own streaming service to compete with Netflix. Would it make more sense for the company just to acquire Netflix? What would such a deal mean for Verizon, Netflix and customers?
It wouldn't do either Netflix or Verizon any good: Though there are exploitable synergies between the companies, they're better off remaining independent, says Todd Campbell at Seeking Alpha.
Verizon already has a huge customer base and deals in place that will position it well as entertainment increasingly becomes about "seamlessly delivering content across TV, PC and mobile devices."
And,while Netflix could surely use the acquisition cash, it wouldn't be enough, given that its value has fallen from a market cap of $12 billion in July to just north of $4 billion. Netflix needs to "keep its focus where it should have been: on its customers" and work on growing its subscriber base, not selling out.
Netflix has a little, but not a lot, to offer Verizon: Netflix would offer Verizon a "decent brand name," upwards of 23 million customers, and a wealth of content deals, Morningstar analyst Michael Hodel tells The Street. The Netflix customer base could be valuable to Verizon, and it might package Netflix with its other services, like Fios television. Netflix could also be added to Verizon Wireless. Still, Netflix has likely overpaid for its content deals, and those deals might have little value.
This deal could be "potentially terrible" for Netflix subscribers, says Jared Newman at Time. They can currently access Netflix on computers, smartphones and TVs regardless of their service provider. If Verizon bought Netflix, it could restrict the service to Verizon customers. And while Verizon is a traditional service provider, Netflix "is a disruptor of traditional television services," so a Verizon-owned Netflix would have little motive to spend millions on deals to bring more content to Netflix."
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I hate Verizon. They have the worst customer service attitude of all; in fact "What customer service??" They spent a lot of money on expensive commercials but don't rely on them to help you with anything as far as service. That they can't spend money or time on....
Look, I've been a happy Netflix customer for many years but if Verizon takes it over, forget it. I'll drop Netflix right away and happily.
Just as when Newscorp bought myspace.
let's see.....verizon DSL in my area is slightly better than dial up speeds. Fios doesn't exist here yet. so who streams videos in my area? only people who like the SLOOOOOOOW download speeds.
so what's verizon offer?
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Do it once a year. This allows the best-performing asset classes to take off and run.
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