Disney and Netflix deal coming soon

[Y2kTheNewOldies]

http://deadline.com/2016/10/netflix-shares-benefit-speculation-deal-disney-1201830691/

It will be interesting how Netflix work out if it gets taken over by Disney. Disney on one hand is trying to get out of lower subscription losses for ESPN and Disney Channel. But the argument here for Disney taking over Netflix here was to obtain growth for Disney.

 

[TheBigA]

Maybe, maybe not. Here's what the article says:

"To be sure, most analysts don’t believe that Disney is seriously interested in buying Netflix. The streaming power has a market value of $45.7 billion — and would probably require a huge premium."

My view is it's cheaper to create another Netflix than buy the existing one. These internet companies have no real assets. You're buying air.

 

[Y2kTheNewOldies]

Maybe, maybe not. Here's what the article says:

"To be sure, most analysts don’t believe that Disney is seriously interested in buying Netflix. The streaming power has a market value of $45.7 billion — and would probably require a huge premium."

My view is it's cheaper to create another Netflix than buy the existing one. These internet companies have no real assets. You're buying air.

But wait I thought Disney has part ownership of Hulu with Fox and NBC to distribute ABC primetime shows on that app. Also Disney has partial investments to NewsOn apps for its ABC O&O's to broadcast their newscasts from. I also have question marks on these moves. Also Disney have contracts to distribute podcasts via Slacker apps. I'm not sure how the Netflix deal would affect existing contracts between Disney and these apps they deal with.

 

[TheBigA]

I'm not sure how the Netflix deal would affect existing contracts between Disney and these apps they deal with.

Exactly. That's why I say "maybe not." Netflix stock has been sinking lately. Perhaps others have discovered the limitations to this company. Netflix creates original content. Big deal. So does Disney. Netflix has a successful platform. So does Disney. Netflix has a famous name. So does Disney. That's why I agree with the analysts who say Disney isn't really interested. But it is interesting that Disney might be considering spending some money again to grow its business. They've already done a lot of that, most recently buying Lucasfilm. The question is what purchase will grow the company without drowning it in debt. That's what this process is all about.