Published: Wed, January 03, 2018
Science | By Cecil Little

Reports Suggest Apple May Buy Netflix

Reports Suggest Apple May Buy Netflix

Analysts claim that Apple will be buying Netflix: it's all thanks to the new tax bill, which is giving businesses more cash to throw around.

"The firm has too much cash - almost $250 billion - growing at $50 billion a year".

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Citigroup's Suva and Merchant ranked Netflix ahead of Disney, Electronic Arts, Activision, Take-Two, Tesla and Hulu among Apple's potential acquisition targets. While Apple has $252 billion hoarded away (90% of it held overseas), the Trump tax cut will allow the company to repatriate these holdings while taking a small tax hit. The tax cut paves the way for Apple to bring its massive pile of cash stored in foreign jurisdictions to the United States. The cut in corporate taxes and one-time allowance for companies to repatriate cash stored overseas without a major tax hit will give Apple, which has about $252 billion in cash at mostly foreign jurisdictions, a way to bring money back to the U.S. and make acquisitions. According to some analysts with financial company Citi, Apple may have set its sights on the ripe streaming service.

The acquisition detailed in the note to investors is just speculation, but Apple could move towards a Netflix buy in an effort to boost its streaming department. He believes that the streaming firm is looking beyond what he describes as "the market's obsession" with subscriber numbers by trying to improve its earnings and revenue quality. Netflix invests heavily on original series and has crafted some of the most popular and talked-about television series we know of. So perhaps there is something to an Apple acquisition of Netflix. A lot of this is reportedly due to the major tax breaks that the Trump administration just gave to giant corporations.

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Many in the industry are already aware of how Apple has struggled to plant a foothold in the movie and TV streaming business. Share your views in comments and stay with us for more updates on this market situation.

Nollen predicted that Netflix will increase original content from 25 percent in 2017 to 60 percent in 2020.

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Wall Street Journal points out that HBO spent about $2 billion on content last year, while Amazon spent around $1 billion in 2013 alone, the year it started original programming.

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