Disney and Netflix are like a match made in heaven. That’s one of the reasons fans were so excited when it was announced earlier this year that Netflix would become the pay-television home of Disney’s newest theatrical hits. So far, Zootopia is the only recent film to hit Netflix. But other summer blockbusters like Marvel’s Captain America: Civil War and The Jungle Book should be following soon. But what if the partnership between Netflix and Disney were even deeper? What if Disney actually bought Netflix outright?
Believe it or not, it might actually happen. Rumors began to swirl earlier this week that Disney was considering acquiring Netflix. Even though it could be nothing more than idle speculation, the rumors were enough to send Netflix’s stock market price soaring.
Netflix and Disney?
Why would Disney buy Netflix, though? The answer lies in how people’s viewing habits are evolving. Disney is a massive entertainment conglomerate. The company needs people to consume its products to survive. For an entertainment company, that means watching movies and shows.
As more and more people are canceling cable and skipping the movie theater, companies like Disney are desperate to find new ways to keep them engaged. Online streaming is the future, and Disney knows it. It’s one thing to license your films and television shows to a service like Netflix. But it would be a whole new ballgame if Disney controlled the streaming service itself.
Twitter or Netflix?
Streaming is the same reason that Disney is reportedly considering an offer to buy Twitter as well. Twitter is best known as a social network, but the company has been experimenting with online streaming. All of the recent presidential and vice-presidential debates have streamed live on Twitter. A new deal with the NFL has also allowed Twitter to live-stream Thursday Night Football games.
But streaming is a new and unproven avenue for Twitter. For Netflix, it’s old hat. Netflix may have started out as a DVD-by-mail service, but it was one of the few companies to successfully transition to streaming years ago. In fact, that was Netflix’s plan all along. According to founder and CEO Reed Hastings, he named the company Netflix because he always intended to shift to online streaming when technology allowed it.
Huge Sums of Money
One thing is for sure: Twitter would certainly be a cheaper buy for Disney. Analysts estimate Twitter’s market value at between $17-25 billion. Bids for Netflix, meanwhile, could go as high as $45 billion. Even for Disney, that’s a massive acquisition.
All is not rosy at Netflix, though. Subscriber growth has slowed and many point at the recent price hike as the culprit. For years, Netflix resisted raising prices, but recently moved its monthly rate from $7.99 to $9.99.
The extra money is needed to not only license existing shows from other production companies (like Disney). Netflix is also heavily investing in its own original productions. In fact, the company recently announced a goal of having 50% of its available shows and movies made in-house. This year alone, Netflix will spend a whopping $6 billion on original content.