I think they will, yes. I’ve been prattling about Apple purchasing Netflix for years; mostly to befuddled (at best) and deaf (at worst) ears.
Now I’m not alone. Citi analysts say there is a 40% chance that it is possible (not exactly sure how they landed at 40%, but whatever).
So, why exactly do I think that Apple will buy Netflix?
Well, first let’s look at what the “professionals” say about a possible acquisition. Apple currently has about 90% of its cash, +/- 250 billion dollars, overseas (and that grows at about 50 billion dollars a year). The analysts posit that with the recently passed new tax scheme (scheme -verb: make plans, especially in a devious way or with intent to do something illegal or wrong) Apple would only incur about a 10% repatriation tax to bring that money home. Which means Apple would net about 220 billion dollars…and that’s a sizable chunk of change to do some merging and acquiring. According to Citi, Apple would only need about a third of that to purchase Netflix (Netflix market cap as of this writing is 88 billion dollars).
Whether Apple repatriates that money is really anyone’s guess, but I’d say there is about a 50% chance they will. (they either will or they won’t).
Now, why do I think Apple will purchase Netflix?
Because it just makes sense. If you’re looking to move into a highly competitive arena that you don’t have a lot, if any, experience in, it makes sound business sense that you find a company that does and, if you can, purchase it (pretty sure they teach that in the introduction class to business students). To wit, Apple tried building a music subscription service and it failed. So, they went out and purchased Beats (which had a nominally more successful subscription service) for 3 billion dollars. Now, the Beats acquisition hasn’t really yielded the kind of results I am sure they hoped for; it has yet to overpower subscription streaming juggernaut Spotify (and it won’t), but they are competing.
While it still remains unclear whether the Apple streaming content service will be ad-supported or subscription based (a total no brainer, subscription) they have begun dipping their toes into the content water. They green lit two shows, one with Reese Witherspoon and Jennifer Aniston centered around a morning talk show (uh, okay…if that’s how you wanna start…I mighta gone for something a little bigger and splashier…just sayin…) and the second show is a reboot of Steven Spielberg’s “Amazing Stories“(MILDLY interesting, if not incredibly safe).
Quick note about the resurgence of these television show reboots. Stop. Please. Did we REALLY need more “Will and Grace“? No. We did not. Did we need “Fuller House“? Nope. Do we really, and I mean REALLY, need MORE “Mad About You“? Abso-fucking-lutely NOT. Fine. I get it, Paul Reiser is hot again after “Stranger Things“…but “Mad About You“?!
I shudder to think what other rehashed shows are on the way.
Also, are we to really understand that there aren’t any original and creative ideas worth pursuing? Of course there are! But producing those shows requires thought and intestinal fortitude, neither of which most traditional programming executives are known for (we’ll just ignore the fear of losing the seven-figure salary and use of the corporate jet).
But I digress.
So, Apple streaming television service. They’ve hired former Sony Pictures TV presidents Jamie Erlich and Zack Van Amburg to spearhead their dive into original programming. These guys have been together at Sony TV since 2005 and have shepherded shows like NBC’s “The Blacklist,” AMC’s “Breaking Bad” and “Better Call Saul” and Netflix’s “The Crown.” Not too shabby. And Apple has about one billion dollars to spend on programming this year. Now, one billion sounds like a lot (well, it is) but no matter the pedigree of these guys, the simple fact is that one billion dollars goes pretty quick in Hollywood (much quicker when you develop shows with people like Reese Witherspoon, Jennifer Aniston and Steven Spielberg).
Furthermore, Apple is projected to spend a little over four billion dollars on original programming by 2022. By way of comparison, Netflix will spend between 7 and 8 billion dollars on original programming, and Amazon Studios will spend 4.5 billion dollars, this year alone.
With that kind of disparity in original content investment, simply put, Apple can’t win; Christ, they’re barely competing. Both Amazon Studios and Netflix have a HUGE jump on them already and are aggressively moving forward…and the recent Disney acquisition of 21st Century Fox for their upcoming streaming service doesn’t bode well either.
Apple acquiring a pre-existing streaming service seems the most likely way for them to get a foothold in the market and become a player.
No, I don’t think Apple would, or even could, purchase Hulu. Hulu is a clusterfuck of conglomerates and I’m still not sure they know what they want Hulu to be. Getting the eedjits who own Hulu to come together and give the go ahead would probably be as likely as Donald Trump firing off cogent and presidential thoughts on Twitter.
Sure, Apple could, if they had the desire, purchase a HBO or Showtime. But then they’d be dabbling in the complicated world of cable television and that is a labyrinth I wouldn’t wish on anyone (talk about a clusterfuck). Also, those companies are owned by conglom’s (Time Warner and Viacom respectively) and it seems unlikely they would entertain a sale…and both have their own streaming subscription service.
Comcast and Time Warner (currently stalled on a merger with AT&T) are unlikely acquisition candidates as they are like the two hyperactive 18 year-olds you place at the kiddie table for Thanksgiving. They each have their media tentacles all over bejesus and each has some sort of convoluted subscription/streaming service now, but fuck all if I can figure out how they work (not that I tried real hard or am even interested). I just know whatever they offer will cost more than I am willing to pay. Maybe they’ll get their shit together and simplify like Amazon and Netfix…but I doubt it.
Lastly, the two guys leading the Apple content charge, Jamie Erlich and Zack Van Amburg, are content people…who already have a relationship with Neflix (The Crown). That may not mean anything, but it’s worth noting.
Let’s face it, when it comes to original streaming content online there are only two players, Netflix and Amazon. There are some smaller players (like Facebook and Snapchat but don’t believe the hype, their original streaming content plays will amount to bupkis), but the two big’uns are Netflix and Amazon. For Apple to build up an entire streaming content service from scratch, at this point, isn’t just a Herculean task, it’s a Sisyphean one.
Really, the only way for Apple to really compete is to buy its way into the game…and I’m pretty sure Jeff Bezos won’t stop until Amazon dominates the world…in everything (insert evil laughter).
That leaves Netflix.
Ah, but when?
Beats me. If I had that kinda foresight, I’d be wintering on St. Bart’s and not freezing my ass off in the northeast.