Microsoft owning Netflix is the most awful, brilliant idea I’ve heard in ages

Microsoft owning Netflix is the most awful, brilliant idea I’ve heard in ages

Netflix need a customer. It is unsustainable to operate alone when content prices and competition soar and subscription levels stagnate or decline. However, is Microsoft the best savior?

According to a recent report, Netflix and Microsoft, who just sat down together to consume billions of dollars’ worth of advertising income on Netflix’s impending ad-supported service, may wind up being more than just pals. In an interview with Yahoo Finance, Needham Senior Analyst Laura Martin argues that this transaction is only the first stage of an effort to win over Netflix, which might also draw in Microsoft.

Martin referred to the $68 billion Activision deal, which is still the subject of regulatory review, and stated, “Netflix is attempting to move closer to Microsoft in hopes that, when Microsoft digests its Activision acquisition, it flips and buys Netflix next.” Martin is correct to believe that until that purchase closes, Microsoft is unlikely to undertake any further corporate acquisitions, at least not of this magnitude. A Netflix purchase would be significant, even huge. An estimated $176 billion is the company’s value. Only a few large corporations, such as Microsoft or perhaps Apple, could afford it.

My first thought upon hearing this was, “Belch. No. Why? No synergy.” Granted, this was an unconsidered visceral reaction. The firm has been around for 47 years, so this purchase may either be terrible or fantastic.

The rationale behind such a prospective acquisition is clear. Netflix needs a bigger organization to help protect it from the market’s whims while it manages the ebbs and flows of members and struggles and spends to produce content that audiences and awards-winning.

It’s a good-ish idea

Microsoft will have the opportunity to fight once more with Apple, which introduced its own original content streaming service in 2019 and later won the Best Picture Oscar.

Although it might seem like a no-brainer, Microsoft has recently found success by understanding it does not have to be Apple. With its new goal of “put Office on any screen you choose,” it is no longer concerned with having its productivity tools available solely on Windows. It is now free to create Windows for ARM computers without being directly reliant on Intel. Microsoft has a gorgeous Surface range, but it doesn’t create the same level of excitement that Apple does for its MacBook and iPhone models.

I’d say Microsoft is happy to win by making billions in Azure cloud money.

Thoughts of Azure, though, remind me of the obvious synergies.

Netflix, which is now housed on AWS from Amazon, could switch to Azure from Microsoft. They’ll no doubt have a pleasant test run through the ad-server system.

There is a definite crossover into entertainment from Microsoft’s gaming division, which includes Xbox, through which many people already watch Netflix, Gamepass, and a variety of game studios, some of which are now producing their own streaming content (though not on Netflix).

It’s a bad idea

On the negative side: Our options are being increasingly consolidated by yet another tech titan purchasing a sizable business.

Microsoft may impose some terrible co-branding concepts, such as coupling Office 365 with Netflix (though a Netflix Ad-Tier in Gamepass might name sense). It could begin to flood LinkedIn with Netflix advertisements.

It could call for Netflix to introduce a platform for streaming commercial content. That sounds, well, dull.

There will undoubtedly be some strange tie-ins with the underdog search engine. Speaking about Bing, I recently realized that “Bing” and “Binge” are separated by just one letter.

But I digress.

To be fair, this is only one study speculating on what this crucial collaboration may entail. Microsoft might not have the same opinion of Netflix. While binge-watching ad-supported entertainment is fine, relaxing out is a bit excessive.

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