Is Amazon Buying Netflix?

We’ve seen this movie before; a couple of years ago, suspense-filled
tales of an impending Amazon takeover of Netflix anti-climactically
amounted to nothing. Rumors began circulating again today that Amazon may buy Netflix, sending shares of both companies higher and offering a respite from the idea that acquisitions will remain stagnant this year. Neither company is confirming (or denying) the rumor at this point, so a rumor it shall remain. But the fact that neither company has debunked the story suggests there could be a shred (or more) of truth to the speculation.

The deal would be a good fit, particularly for Amazon. Netflix is steadily stealing market share from others in the movie rental business, and while Amazon continues to push forward with its streaming Video On Demand service, Netflix is an old hand at streaming large volumes of online content both to computer screens and directly to televisions.

The two are also competing for movie rental dominance on several platforms, including TiVo, Roku, and Xbox 360. But they’re not competing with the same content; Amazon puts new DVD releases up on Video On Demand, while Netflix’s streaming service generally offers older titles (the company ships new titles on DVD via the mail). As the movie rental business moves closer and closer to streaming video only, a combination of the two companies’ platform deals, inventories, and market shares could easily create a market leader in that space.

We’ll be following this one closely, so stay tuned.

[via Bloomberg, TechCrunch]

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