It’s an acquisition target that I suggested over eighteen months ago could be in Disney’s sites; but on Monday the stock market reacted with renewed interest when Disney were again connected with an interest in acquiring Netflix.
Following a MarketWatch report that Disney was a potential buyer for the world-conquering video company, Netflix stocks closed out 4.14% higher following the end of trade on Monday.
The rumor has sprung from a client note from R.W Baird analyst William Power, who also throws Apple’s name into the mix.
Despite both Netflix and Disney staying schtum on the rumor (standard practice, given Netflix’s earnings call later this month) for Disney, however, the benefit of picking up Netflix is far clearer.
Having invested heavily in streaming recently (it put $1 billion into streaming company BAM Tech back in August), Disney is looking to safeguard the future distribution methods of its wide-ranging film and TV catalog and classics. It already offers its own DisneyLife streaming service, but its laser-focus on Disney-owned properties makes it of niche interest only.
This is despite a widening catalog of mainstream franchises. Whereas Disney’s creative output was once purely a kid-friendly animation offering, it’s now also the steward of both the huge Marvel and Star Wars cinematic empires. Netflix wouldn’t come cheaply (its market capitalization alone sat at a giant $37 billion this summer), but with strong brand recognition and an incredible ability to retain its subscriber base, it’d be a sound investment.
With no comment from either firm on the rumours, and no negotiations happening, I suggest we all Netflix, and Chill until we hear more…