Today, Netflix’s stock price rose nearly $4 in the span of a few hours on the rumor that Disney was going to place a bid for it. It’s not unusual for stock prices to rise on good rumors like acquisitions, but it is unusual to learn the positive effects of something that probably won’t happen.
As I said about the rumor that Disney was looking to buy Twitter just a few days ago, the Mouse House company is a company that creates visual content. That content needs a place to be consumed by us, the consumer. That’s where Netflix comes into the picture. The streaming giant distributes visual content from not just Disney, but other studios as well.
That’s where things get tough for Netflix should it get bought out by Disney.
Other studios and content creators also use Netflix to distribute their content. It has grown to become a hub of amazing TV programs and movies that creators and studios are willing to pay top dollar for to have it live on platform. Why? To reach the millions of people that subscribe to Netflix with their content.
Disney is actually one of those companies that already use Netflix to distribute their content. In fact, they inked a multi-million dollar deal with the streaming service so that it becomes the exclusive streaming distributor for its Pixar, Marvel, and Lucasfilm content. What happens, though, when Disney buys Netflix?
It wouldn’t be surprising to have Disney content highlighted more than other creator’s content. Obviously, that’s not making those other content creators happy. The result is that many of these studios and creators are pulling their content from Netflix in hopes of getting more eyes for their content someplace else. It’s already happening now as Netflix has also increased their focus on creating and distributing their own content.
Disney is already making a return on their large investment in Netflix with their content. Furthermore, Netflix is already a healthy business that provides a greater value for all creators who use it as a distributor. So why would they purchase something that might lessen that return?
No need to hit fast-forward button to see what would happen and find that answer. They simply won’t.