Analyst: Microsoft could make a play for Netflix | Media Investment | Business
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Microsoft is looking to get into the streaming business via acquisition, according to veteran media analyst Porter Bibb – and the target of choice? Netflix, he predicts.
netflix UK 18Feb2018

Bibb, managing partner at Media Tech Capital Partners, said earlier this week that he believed Microsoft would look to be a part of the direct-to-consumer content marketplace, but that rather than build its own library organically, Microsoft could go after Netflix's assets.

"They're moving as fast they can into the cloud business,” he said on CNBC’s Squawk Box. “They don't have any direct-to-the-consumer content delivery. I think Netflix is going to be acquired by Microsoft, which doesn't have any content right now."

Netflix has a market value of nearly $142 billion and has seen its shares more than double in the past 12 months on the back of quarter after quarter of subscriber growth. However, many industry watchers believe the pace the streaming leader has set is only sustainable with yet more investment in original content—a proposition that is already squeezing the company’s margins. This year alone, it expects to spend $7.5 billion to $8 billion in content expenses.

Microsoft’s deep pockets, the thinking goes, could provide the backing Netflix needs to keep its model going. The software giant has a market value of $739 billion.

Neither Microsoft or Netflix have responded publicly to the prediction, naturally.

The prognostication comes as mega-mergers dominate the landscape: Walt Disney plans to acquire most of Twenty-First Century Fox's assets; Comcast has made an offer for Sky; and AT&T's bid to buy Time Warner is still awaiting regulatory approval.

Bibb also told CNBC that a Comcast/Sky deal is unlikely: Rupert Murdoch "doesn't want all that cash," he said.