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Opinion: Will Apple Hijack Amazon's Move For Netflix?

Amazon could be mulling over plans to acquire Netflix as a streaming business separate from its DVD-by-mail service, that's a theory that many in the US financial community are backing.

According to Larry Dignan from ZDNet (opens in new tab), some analysts are so convinced that they have updated Netflix' shares from underperform to outperform despite the company losing hundreds of thousands of subscribers as it changed its pricing structure.

Spinning off the Netflix DVD business, as a separate company from the streaming business could apparently encourage Amazon to buy the latter in order to significantly increase the size of its content library (by up to three times according to some estimates).

But there's always the possibility that Apple may decide to upstage Amazon by starting a bidding war and using its huge cash reserves to buy a rival and partner; Amazon may back off pretty quickly because of the price and because it already has Lovefilm in Europe.

Back in October 2010, the Wall Street Journal put forward this idea via its resident corporate matchmaker, Deal Yanta. Back then, Netflix had a market capitalisation of $8.7 billion, nearly a year later, this has fallen to around $6.8 billion, comfortably within Apple's reach.

More importantly, adding Netflix to its portfolio would give Apple more leverage when discussing terms and conditions with entertainment companies, as it has proved it in the past with iTunes. And one more reason for Apple to buy Netflix? Android support. Getting Netflix would nix an important provider of legal content for Google's mobile platform.

Désiré Athow
Désiré Athow

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.