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Saturday, October 16, 2021

Despite huge merger and acquisition deals… “Netflix” is still the strongest

Netflix’s grip on broadcast audiences is causing other media companies to pursue expensive mergers and acquisitions with a whiff of desperation.

What’s the irony about it? Netflix can still beat them all, without spending a penny on any competitors.

Acquisition spree
Brian Roberts of Comcast Corp. is the latest media mogul, said to be looking for acquisitions.

The Wall Street Journal, citing unnamed sources, reported that he is considering deals for ViacomCBS — which itself was formed from a fairly recent merger — and Roku to try and improve the cable provider’s offerings.

While he thinks about it, Discovery’s David Zaslav works out a deal for AT&T’s WarnerMedia division.

Wireless carrier AT&T is the latest company to pull out of broadcasting, allowing cable networks and tech giants to fully acquire it.

Amazon agreed last month to buy Metro-Goldwyn-Mayer (MGM), the film studio best known for its James Bond films.

Meanwhile, Sony’s Playstation Vu and Quibi have closed down after realizing how hard it is to make money.

Massive spending
Expensive content is the secret behind huge indebtedness. The broadcast wars pushed undoubtedly dominant companies like Comcast and Walt Disney into unprecedented amounts of debt to protect their market share and position.

AT&T has become known as the world’s largest non-bank borrower after it acquired Time Warner for $102 billion in 2018; Three years later, that deal was scrapped.

In 2019, Disney swallowed 21st Century Fox for $85 billion, adding to the buyout trilogy of former CEO Bob Iger, Marvel, and Pixar — which laid the foundation for Disney. Plus” and “Comcast”.

After losing out on Fox, she acquired Sky for about $50 billion, and Shari Redstone reconstructed her father’s two vanished entities: CBS and Viacom.

Netflix control
All of these mergers and acquisitions in the past three years have been worth more than Netflix’s market value, yet they haven’t been able to break Netflix’s control of more than 200 million subscribers or the many investors who favor its shares.

In fact, this leading streaming company holds the most valuable deal currency in the industry but has not used it for any deals.

It is worth noting that the newcomers are trying to be a lot like Netflix without adopting the guiding principles that made it a favorite, namely keeping things simple, preferring content creators over bankers, making sure the technology is the best, and offering offers without ads.

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