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Verizon May Simply Purchase Netflix Rather Than Compete

By - Source: FOX Business | B 21 comments

Instead of competing with a possible rival, why not just buy them outright?

Last week brought reports that Verizon Communications is looking to launch a non-FiOS video streaming service to compete with Netflix and cable TV providers. But now Fox Business claims that Verizon doesn't plan to compete with Netflix at all -- it's interested in purchasing the video streaming company instead.

According to the report, Verizon is evaluating whether a purchase of Netflix could buy it easy entry into the video delivery business rather than attempt the feat on its own. Little else is known about Verizon's potential buyout at this point, and a Verizon spokesperson declined to comment on the report. Netflix said it doesn't comment on rumor and speculation.

Last week Reuters said that Verizon's video streaming service will be introduced outside of markets where it currently offers its FiOS broadband and TV package. Even more, it may actually be rolled out to around 85 million U.S. households in 2012. Little else is known about the Verizon service, and there are mixed opinions by those close to the situation about what Verizon will actually bring to the video streaming table that's not already covered by other services.

Unnamed sources claim that Verizon may be eying a video streaming service to grow its overall customer base which will essentially lower its programming costs on a per-subscriber basis. The more subscribers a distributor has under its belt, the easier it is to negotiate lower fees.

Previously Netflix CEO Reed Hastings said that anyone wanting to go up against his company or the likes of HBO will need to "commit to multiple-year spending between one and two billion. At this point, none of these guys have chosen to do that."

After the Fox Business report on Monday, shares of Netflix soared more than 6-percent. That's good news considering its stock price took a nosedive down to a new 52-week low just two weeks ago. The drop was the result of the company reporting that it would fall to a loss in 2012 if it was unable to boost its user base.

Netflix subscriptions dramatically fell months ago after Netflix decided to split its DVD and streaming services, essentially jacking up the overall price to nearly 60-percent when compared to the previous plan. Netflix reverted back to its former state, but its user base has been bruised ever since. A buyout by Verizon Communications may be what the company needs at this point.

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  • 7 Hide
    LuckyDucky7 , December 14, 2011 12:20 AM
    You know... if Verizon buys them out they'll just shut them down, in favor of their own overpriced-for-what-you-get services.
  • 3 Hide
    Anonymous , December 14, 2011 12:21 AM
    I wonder if the reason Netflix wanted to split the DVD-by-mail and the streaming businesses was so that they could sell the streaming business to another company (like Verizon).

    Is this something Netflix would have had to disclose to shareholders when Netflix proposed the split?
  • 3 Hide
    CaedenV , December 14, 2011 1:09 AM
    I just keep hoping that I can finish start trek before they go under... at this point it seems like it is going to be a close race.
  • Display all 21 comments.
  • 6 Hide
    bobusboy , December 14, 2011 1:19 AM
    I'm so sick of this oligarchical society. There should be many small businesses; not a few mega corporations dominating the market.
  • -2 Hide
    Anonymous , December 14, 2011 1:27 AM
    Welcome to the world of CAPITALISM. This place sucks.
  • 7 Hide
    jellico , December 14, 2011 1:36 AM
    IlluminatiSheepWelcome to the world of CAPITALISM. This place sucks.

    As opposed to SOCIALISM which has failed everywhere its tried. The problem isn't capitalism... it's government. Large and powerful companies are able to rig them game in their favor by buying off entire voting blocks of politicians on both sides of the aisle. Then, on top of all of that, you have the government spending our children and grandchildren into debt that they will never get out of, all for the express purpose of making sure that the idiots who voted them into office will continue to do so.
  • 4 Hide
    otacon72 , December 14, 2011 2:42 AM
    LuckyDucky7You know... if Verizon buys them out they'll just shut them down, in favor of their own overpriced-for-what-you-get services.


    So they're going to but Netflix for billions and then shut it down? Boy was that a stupid statement.
  • 0 Hide
    otacon72 , December 14, 2011 2:44 AM
    No better time to buy it since upper management has had blunder after blunder and the stock is at a 52 week low.
  • -8 Hide
    Kami3k , December 14, 2011 3:31 AM
    jellicoAs opposed to SOCIALISM which has failed everywhere its tried. The problem isn't capitalism... it's government. Large and powerful companies are able to rig them game in their favor by buying off entire voting blocks of politicians on both sides of the aisle. Then, on top of all of that, you have the government spending our children and grandchildren into debt that they will never get out of, all for the express purpose of making sure that the idiots who voted them into office will continue to do so.


    Lol idiot.
  • 2 Hide
    livebriand , December 14, 2011 3:53 AM
    otacon72So they're going to but Netflix for billions and then shut it down? Boy was that a stupid statement.

    Uhh, that's basically what HP did with Palm.
  • 1 Hide
    xxsk8er101xx , December 14, 2011 5:14 AM
    Shouldn't that tell you something? That Mankind is inherently evil and greedy and thru lessons of society they become good.

    This is why governments fail because the lessons learned thru society are not learned but forgotten.

    - Realist

    whysobluepandabearSocialism has failed for the same reasons capitalism fails - greedy, corrupt people. Same as communism. When you have rich people who desire power and wealth, and rather see others rots and die before having anything taken from them, then this is the end result. Failed systems. The simple fact, and one that has been since the beginning of man kind, is : People don't give a shit about each other - they value gain and superiority rather than equality.

  • 0 Hide
    alidan , December 14, 2011 6:20 AM
    otacon72So they're going to but Netflix for billions and then shut it down? Boy was that a stupid statement.

    the infrastructure, servers, and if transferable, licences, kill the netflix name, as its damaged, and move them over to your new service at the same netflix price, but charge new comers more, verision has the clout to really pull in content, so its possible that they could be the defacto you go to them or else kind of player.

  • 0 Hide
    mchuf , December 14, 2011 11:38 AM
    Typical of Ma Bell and her decendents. Buy out the competition because you don't know how to compete.
  • 2 Hide
    Anonymous , December 14, 2011 11:54 AM
    jellicoAs opposed to SOCIALISM which has failed everywhere its tried. The problem isn't capitalism... it's government. Large and powerful companies are able to rig them game in their favor by buying off entire voting blocks of politicians on both sides of the aisle. Then, on top of all of that, you have the government spending our children and grandchildren into debt that they will never get out of, all for the express purpose of making sure that the idiots who voted them into office will continue to do so.


    Capitalism is more an Ideology than a System of Governance. Its by no way Ideal, but is the best of the Options we have available at the current time!

    There is one other that may one-day come to pass, a type of reformed socialisim, where people have everything they need, learn to value time, friends and family over goods, realize that Humans, every single last one are the most important thing to be concerned about and government becomes a invisible autonomous network of workers with no sense of self importance at all, following codes of conduct set out specifically to look after every human on earth.

    But that would be a Utopian idea wouldn't it, and where would all our Money and Stuff fit in hey!
  • -1 Hide
    CaedenV , December 14, 2011 12:49 PM
    jellicoAs opposed to SOCIALISM which has failed everywhere its tried. The problem isn't capitalism... it's government. Large and powerful companies are able to rig them game in their favor by buying off entire voting blocks of politicians on both sides of the aisle. Then, on top of all of that, you have the government spending our children and grandchildren into debt that they will never get out of, all for the express purpose of making sure that the idiots who voted them into office will continue to do so.

    Ironic that Netflix was founded on the idea of providing cheap (and if possible free) media to the masses. From what I have heard the founder was a staunch socialist, and I use to joke with my friends that Netflix was the only good thing to come from Socialism. lol, guess that isnt working out.
  • 0 Hide
    CaedenV , December 14, 2011 12:59 PM
    whysobluepandabearSocialism has failed for the same reasons capitalism fails - greedy, corrupt people. Same as communism. When you have rich people who desire power and wealth, and rather see others rots and die before having anything taken from them, then this is the end result. Failed systems. The simple fact, and one that has been since the beginning of man kind, is : People don't give a shit about each other - they value gain and superiority rather than equality.

    Yes and no. I think what has really killed capitalism has been the merging of powerful corporations with politicians which causes really stupid things to take place, like student loans for students in fields which they can never pay off, or 'providing' affordable housing that the people can't really afford, which then blows up in everyone's faces. I believe MOST people look out for eachother, and while we do not nessessarially give away something we have worked hard for to a complete stranger, we all try to help those in our families, as well as the people we know in our work and social circles. No one person can help everyone, but if everyone strives to be independent and charitable then there is much less strain on the overall system. The problem is that people do not want to be independent, and they demand things of others who they think have more than themselves (which is theft, no matter how large the gap is between the wealthy and the poor).
  • 0 Hide
    lamorpa , December 14, 2011 2:33 PM
    In the words of young Vader, "Noooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo!"
  • 3 Hide
    millerm84 , December 14, 2011 2:44 PM
    jellicoAs opposed to SOCIALISM which has failed everywhere its tried. The problem isn't capitalism... it's government. Large and powerful companies are able to rig them game in their favor by buying off entire voting blocks of politicians on both sides of the aisle. Then, on top of all of that, you have the government spending our children and grandchildren into debt that they will never get out of, all for the express purpose of making sure that the idiots who voted them into office will continue to do so.



    Your view of socialism is incorrect, for what ever reason you equate socialism with "big government'. When in fact socialism, like capitalism, isn't a system of government but an economic structure. Socialism is an economic system in which the customers of a business are both consumer and owner of said business. Electric, water, teleco co-ops are all socialist organizations they exist only to provide the service they offer, whereas a public utility like Duke power or Verizon exist to profit from providing the same services. Wither one is better then the other comes down to the commitment to service they have.

    As far as governments are concerned assuming that all governments are businesses all democracies are in fact socialist, each citizen pays into the government with the expectation that no one in the government looks to create wealth just provide services (schools, roads, military and so on). Whereas a monarchy or dictatorship would be a capitalist business as the ruler uses taxes to provide services and to increase personal wealth.

    The issue of debt in this nation has nothing to do with capitalism or socialism. It has to do with the fact that raising taxes for any cause is political suicide which is why we have been borrowing money since the Civil War. The trillion dollar cost of the Iraq war was all borrowed because there was no one from either political party to say "I'll pay more taxes to fund the war". And the same is true of every program, office, and war the federal government is involved in we want what we want but we don't want to pay for. To address your big government concerns realize that even if the federal government eliminated every program, office, department, cabinet, and outside aid money; leaving only loan payments, military spending, medicaid/medicare, and social security our nation would still be borrowing 20 cents for every dollar spent for those programs alone.

    Socialism isn't taking care of the needy it simply transfer ownership of businesses it has nothing to do with debt or social programs. The debt issue our nation faces will only be truly addressed when the government taxes for every dollar it spends. And again even if you cut everything but those 4 programs tax revenues will still have to increase 20% to balance the budget.
  • 0 Hide
    captaincharisma , December 14, 2011 4:42 PM
    LOL all they have to do is walk down to netflix with just a penny and say "i want to buy your company" :) 
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