If there were any two companies sitting pretty in 2016 it would be Disney and Netflix. Disney announced that it broke its own global box office record with $5.851 billion for the year… in October, which means we can expect a figure well past 6 billion by the time the year is out. Netflix blew past $2 billion in their third quarter earnings exceeding analyst expectations. So one should ask, why not get chocolate in my peanut butter?Hot off the heels of the rumored – now pretty much official sale of Time-Warner to AT&T for $85 billion, the rumor mill is telling us that Disney is eyeing Netflix as their next potential conquest. An article over at Tech Crunch makes a compelling argument for why it would make sense for both parties to get in bed with one another.
First off, one of Disney’s biggest rivals Time-Warner was just bought by At&T meaning that AT&T will own DC Comics properties (to Disney’s Marvel), NASCAR, HBO, CNN, New Line Cinema, Warner Brothers Films and a whole lot more. The list is pretty extensive. As a result Direct TV is going to be a lot more attractive as a service. Meanwhile Disney is bleeding ESPN subscribers and finding great success in the realm of Netflix. With their Marvel TV shows breaking records every new season it’s been a healthy arrangement.
With services like Netflix, Hulu, Amazon Prime and others, original content has become king and Netflix is leading the pack. Netflix is king but how big is the realm? The company can only grow so large and do so much on its own. Their stated goal is to have 50% original content which cost money and read any article, Netflix aint shy about spending. With the backing of a multimedia titan like Disney, the sky is the limit, and having access to the entire Disney library, (which cost them around $200 million back in 2012) can’t hurt.
The other big factor is that Disney CEO Bob Iger is looking to retire in 2018. Seeing how he’s postponed his retirement 3 times already, it feeds the rumor that Disney hasn’t found a suitable replacement. Enter Netflix CEO Reed Hastings. The guy has pioneered a new way to create and distribute media that make media giants like Time-Warner, Viacom and even Disney to scratch their heads. Netflix is a leader in its field and has changed the game to the point where we are living in a cord cutting world. Frankly Disney would be stupid to not offer him the job anyway.
Of course here I am, explaining away how it would be a good thing for a corporate giant to gobble up one of the most innovative companies in the last 20 years, but Disney has a better track record than most.