First Redbox, and now Netflix. I don't think there's any doubt that the brass at Verizon wants one of these companies to make an easier transition into video streaming, because the rumors keep coming up. Despite speculation that buying a company like Netflix, worth over $4 billion, isn't feasible because streaming rights cost nearly the same amount of money, we keep hearing these rumors that Verizon is interested in beefing up their FIOS offerings. None of it seems plausible considering the cost, but maybe Verizon wants an easily identifiable brand name associated with streaming movies?
Will Verizon Buy Netflix Or Team Up With A Competitor?
This seems an awful lot like the Hulu sale, which was on, then off, then possibly on again. I think Verizon is considering all options, and now we're hearing about it. Someone at a board meeting says, "I know, let's buy Netflix!" and there's some discussion, but nothing is set in stone. A sale for Netflix makes some sense after the year they've had, but I think they might want to see how their new and original content fares in the next couple of years. One bad year doesn't mean all is lost. I'm not sure Reed Hastings seems like the type to give up so soon, but then again, the handling of his company has been unpredictable for many months. Maybe the pressure to sell is pretty intense.
But, TechCrunch had a really convincing article about a Redbox acquisition last week, so why are the rumors so suddenly heavy about Netflix? Is Verizon trying to play the two companies against each other somehow, or did the Redbox deal fall through in some significant way? One thing is for sure, the rumors got Netflix stock to rise 5.6% to $74.85. Yeah, that's the only thing we can truly report for fact. The stock went up.
Verizon is in a tough spot. Starting their own service against Redbox and Netflix doesn't make sense. I'm not entirely sure buying Netflix makes sense. The only thing that really makes sense is what we've heard about the Redbox partnership, so I'm sticking with that, and I believe the Netflix thing is smoke and mirrors.