Om Malik: Apple Should Buy Netflix

Om Malik:

I was on Leo Laporte’s TWIT show yesterday and ended up going on a bit of a rant about Apple and “Planet of the Apps.” My view on “content” efforts like this is pretty simple. It is distracting, non-core to Apple and basically avoids the bigger challenges: how to add data and Internet DNA into a company that has managed to struggle with services. The App Store needs more smarts and better search, and it needs to take a contemporary, data-centric approach to surfacing apps. “Planet of the Apps” is just an old media-like thinking applied to “apps.” I might be the only one who feels that way, but the reality is that these kinds of efforts are really not good for Apple at a time when it is competing with Google, Amazon and Facebook.

Apple — if it really wants to get into content and wants to make a strong statement to the Hollywood establishment that has stymied its television efforts so far — should make a big, bold bet. It should use its massive stock market capitalization and cash hoard to buy Netflix.

Om is a good friend, so it pains me to say this, but he’s off his rocker on this one. I’m as skeptical as anyone about this Planet of the Apps show and why Apple is producing it. But I highly doubt it’s a distraction for anyone at Apple. It’s not even shooting in the Bay Area; it’s shooting in L.A.

Buying Netflix, on the other hand, would be a huge distraction. I’m not saying it could never happen or would certainly be a bad idea, but Apple’s services are built to take advantage of its hardware. Netflix is the opposite — it’s a service designed to be available on any device with a screen. With iTunes, Apple already has a library of movies and TV shows. If Apple wants to produce original content, they could start their own production company for a tiny fraction of Netflix’s $42 billion market cap. A fraction.

To me, this reads as Om being bored with Apple, and wanting them to just do something. Saying Apple should buy Netflix is no different than Eric Jackson’s call two years ago for Apple to start making mega-billion acquisitions. As I wrote then:

Conglomeration may well work out well for Facebook. General Electric has done well with that model for over 100 years. But it would be a disaster for Apple. Apple makes acquisitions for integration. Exhibit A: PA Semi — a chump change $278 million acquisition that laid the groundwork for Apple to become the leading mobile semiconductor company in the world.

Thursday, 11 August 2016