Netflix is ‘Open for Business’; Could Acquisition of Paramount be in the Cards for World’s Largest Streamer?
Talk of mergers and acquisitions can be exciting, as companies try to determine which aspects they want to build from within, and which they’d rather simply buy. Entertainment companies like Netflix always have to keep an eye open for potential acquisitions in order to stay ahead of the competition and continue to bring new content to users.
Netflix has traditionally been a company that built from within as opposed to pursuing big-ticket franchises or marquee sports rights. But that could be changing, as Business Insider reports that the company is keeping a watchful eye out for acquisition targets that make sense, and it could pounce at any time.
“[Netflix is] open for business — that’s a new evolution,” a banker who has had conversations with the company told Insider. Netflix has acquired eight content and gaming companies since 2017, four of them in 2022, signaling it could be ramping up its attempts to make splashier acquisitions.
BI reports that one entity that Netflix gave consideration to recently was Paramount’s movie studio. Paramount is a frequent subject in acquisition talks these days, as its relatively low market cap would make it easier to acquire than other similarly sized studios.
If it decided to go one step further and acquire all of Paramount, the merger would instantly give Netflix some of the most popular franchises on TV. The service already sits at more than 230 million global users; if it got its hands on “Yellowstone” and the rest of the Taylor Sheridan catalog (not to mention other Paramount-held franchises like “Star Trek”), “NCIS,” “Criminal Minds,” “FBI,” and more, the other streaming platforms in the market would have no choice but to declare the Streaming Wars officially at an end.
Still, it’s not terribly likely that Netflix will make a serious play for Paramount. Sources familiar with the company’s line of thinking say that it’s more likely that Netflix will continue doing what it’s been doing; making smaller deals like the acquisition of intellectual property and gaming studios to develop more in-house content from.
“We’re builders versus buyers,” said Netflix co-founder and co-CEO Ted Sarandos at a conference in December. “So I think we’ll probably lean on that for a while.”
Insider also reports that there is a healthy internal debate regarding bigger acquisitions within Netflix, as with other issues like offering live sports, and putting more Netflix original movies into theaters. Opposition to offering live sporting events was longstanding at Netflix, but the ice began to thaw a bit in 2022 when the company put in a bid for Formula 1 racing rights. Discussions regarding the acquisition of the World Surf League began in late 2021, but those conversations ultimately went nowhere. Earlier this month, it was reported that Netflix was in the process of creating a live golf tournament that it would stream sometime in the fall.
Netflix has shifted long-held philosophies before. The company that tweeted “Love is sharing a password” in 2019 has certainly done an about-face on that sentiment, rolling out rules to stop password-sharing in May.
So while Netflix is not currently likely to acquire Paramount, that could certainly change in the future. Netflix didn’t get to the top of the streaming heap by being inflexible, and the company has made up for all of its stock losses from 2022 and then some following the introduction of an ad-supported subscription tier and new password-sharing rules. It certainly has the financial capability to make a splashy acquisition if it chooses, and Paramount might be an attractive asset for Netflix if it changes longstanding corporate dogma once again.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.