We can not say that netflix saw one of his best moments, since after presenting his financial results and subscriber forecasts, he saw how his actions went from the cost $680 in November 2021 at $197 Currently. And it is that a few months ago the famous streaming company experienced an overwhelming stock market crash lose more than $50 billion of its value. Given this, it is rumored that Microsoft would be interested in acquiring it, and in turn, Netflix would see a quick way out of its current situation.
The fall of Netflix on the stock market has been in the news for months and it is not for less, since lost 70% its value compared to last year. This was due to drop in subscribers compared to the typical growth experienced by the streaming platform. That said, one of the steps Netflix took was to announce a new subscription plan with advertisingbut to one most affordable price , in an attempt to stop the leak of users. Subsequently, at the end of June, the platform announced that it looking for partners there Microsoft will be your partner on this path linked to the payment of a subscription service with integrated advertising.
Microsoft joins Netflix, the beginning of a great friendship?
On the one hand, we have a Microsoft, which is in the process of acquiring Activision Blizzard and Kingfor a value of $72 billion. However, it is estimated that there are still a few months before this agreement is concluded. Meanwhile, Microsoft itself already offers a well-known and popular streaming service, the Xbox Game Passwhere we can access an extensive catalog of hundreds of games.
This has made a dent in the consumer market, since instead of buying games individuals at great expense, we can afford a Monthly subscription cheap to access hundreds of them. This is very similar to the approach of netflix a thousands of titles streaming by monthly payment, leaving much cheaper than buying or renting movies. And here we see the first union between the two companies, where Microsoft announced that it was I’m teaming up with Netflix to help him with his new streaming model.
It was the one we mentioned earlier, cheaper streaming, but includes advertising. For this work, Microsoft was chosen as exclusive partner who will handle ads and technology. Additionally, Microsoft mentions that all ads posted on Netflix they will be available on their own platform, so they also earn by helping Netflix grow.
Microsoft could buy it to boost its streaming service
Microsoft got $10 billion in advertising revenue last year, which, while it may seem like a lot, is nothing compared to more than 160 billion Google. There’s a lot of room for improvement here, and Microsoft is thought to want to make advertising a form of revenue. Here, the current alliance agreement that exists between Netflix and Microsoft comes into play, but there is also an important factor.
Netflix is having a bad timealthough its shares increased by 15% in recent days they are far from their 2021 peak. To get out of this situation, the cheap subscription and having Microsoft as a partner is a good option. However, Microsoft could end up buy Netflix for $100 billionaccording Laura Martinanalyst at Needham. If filled, Netflix would get out of the situation it is in and Windows would be able to capture million potential new customers.
“Netflix tries to get closer to Microsoft hoping that after Microsoft digests its acquisition of Activision, it will then proceed with the purchase of Netflix.”
It would be a deal where both would be winners and a subscription could be considered Netflix + game pass, as a first idea. Or maybe they spend it all on advertising and we end up having both streaming services stuffed with ads. Nobody really knows what will happen in the future and therefore, we will have to be attentive to the next moves. If it’s done, it will be soon because things don’t change, since Netflix sees losing its throne before First video in the United States, just by taking a 1% advantage.