Does Comcast have its eye on Netflix?
Hard to believe, considering how the companies have feuded in the last year. Netflix has accused Comcast of slowing the delivery of its video into consumers homes and has actively opposed the Philadelphia cable company’s merger with Time Warner Cable.
If the merger falls through, one analyst says, Netflix represents a natural next acquisition target for Kabletown.
“With Netflix now at a $30 billion market cap with most of its profits reinvested in overseas expansion, acquiring Netflix would be massively dilutive to Comcast shareholders. However, Netflix has no control shareholders and we have to imagine the board would listen to a truly compelling offer from Comcast,” writes Rich Greenfield at BTIG Research. “Tech is hard and traditional media companies are simply not offering best-in-class apps across an array of devices. With consumers increasingly interested in ad-free streaming, Netflix could provide Comcast with an incredible team and platform to learn from, which could accelerate Comcast’s virtual MVPD efforts. Not to mention, Comcast could further the reach of Netflix domestically by integrating the service into its set-top boxes.”
The acquisition would also give Comcast a level of invulnerability against so-called “cord cutters.” Comcast already has a stake in the Hulu streaming video service, through its ownership of NBCUniversal. Adding Netflix would give it a hand in two of the biggest video streaming services in existence.
Such questions, though will have to wait for the resolution of the Comcast-Time Warner merger. After a year of lobbying and case-making, that decision is likely to arrive in the next few months.