Why Apple built Apple TV+ instead of blowing billions acquiring Netflix

“There’s lots of chatter about the potential of Apple buying Netflix. It comes from people who would benefit from such an enormous acquisition,” Daniel Eran Dilger writes for AppleInsider. “That includes investors who are long on the idea of Netflix continuing to expand its base of subscribers while incrementally charging them more, and longer on the idea of some magic bag of gold dropping down and buying their shares of Netflix. ”
“However, there’s little reason for Apple to be interested in buying Netflix. First, Netflix already has an incredibly high valuation greater than $150 billion, meaning there’s little potential for Apple to add any value and create any growth,” Dilger writes. “When companies spend $15 billion to take over large, existing businesses the way Google did with Motorola and Next, or the way Microsoft did with Nokia and aQuantive, it typically makes for a huge embarrassing mess. Apple buying Netflix would be ten times as bad. ”
“Secondly, there’s no reason to think that Netflix is doing something other companies can’t,” Dilger writes. “Apple already knows a lot about Netflix’s business, because it has been servicing its subscriptions in the App Store. While Netflix discovered some key insights about the market for non-linear television content, it’s not a complex mystery to duplicate what it’s now doing… The primary insights Netflix has discovered over the last decade of moving to mostly original content is that customers don’t want to wait for a show to be broadcast on what the company refers to as “linear TV,” and they don’t want to sit through ads. Most importantly, they’re willing to pay for those freedoms… There’s nothing really unique that stops other companies from copying the winning formula of producing and delivering good content, without ads, in a non-linear form that lets subscribers watch what they want, anytime they want, and get captivated with a production by binging an entire series.”
Much more in the full article – recommended – here.
MacDailyNews Take: Yup.
What is unique about Netflix? A handful of TV series are not worth $40 billion. Apple is perfectly capable of taking on Netflix without having to buy them, deal with integrating their employees, etc. — MacDailyNews, May 27, 2016
It’s far less expensive to develop your own hits – Apple only really needs one hit to start – than to overpay for Netflix. — MacDailyNews, May 14, 2019
SEE ALSO:
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