An analyst believes Netflix could be trying to cozy up to Microsoft for a future acquisition. Netflix has been facing some financial trouble, or at least as much trouble as a major corporation can have in relative terms, over the last several months after the company announced that it had lost subscribers for the first time since 2011. Netflix also confirmed that it expects to lose millions of additional subscribers in the coming months, something that caused concern for investors after Netflix routinely dominated the stock market for years. With that said, Netflix may be looking to Microsoft to throw it some kind of life preserver.
Earlier this week, it was announced that Microsoft would be supporting Netflix's new ad-supported subscription model with technology and an ad marketplace. This will allow Netflix to offer a subscription at a lower cost and ideally boost subscribers in general. Needham senior analyst Laura Martin spoke with Yahoo about the deal and suggested there could be larger ambitions here, namely the ability for Netflix to position itself for a friendly relationship with Microsoft and eventually open the door to an actual acquisition. Martin went on to state that no other company that Netflix could have partnered with would be able to complete the $100 billion acquisition necessary for the company for either financial or regulatory reasons, but Microsoft could.
"It could be that Netflix is looking for an exit," said Martin. "Netflix is trying to get closer to Microsoft in hopes that, after Microsoft digests its Activision acquisition, it turns and buys Netflix next."
Of course, this is not a rumor, it's speculation. There are no firm rumors that Netflix is actually looking to be acquired in any kind of way, but it does pose interesting ideas. Firstly, Microsoft gains an in-house film division allowing for adaptations of its various video game IPs like The Elder Scrolls, Gears of War, and soon to be Call of Duty thanks to the Activision deal. Secondly, it also allows possibly another avenue for Xbox's game streaming and Game Pass model by introducing it to Netflix's game division.
Would you be interested in seeing Microsoft acquiring Netflix? Let me know in the comments or hit me up on Twitter @Cade_Onder.
[H/T Windows Central]1comments