This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

An Apple Acquisition That Could Squash Netflix

NEW YORK (TheStreet) -- Given that Apple (AAPL - Get Report) has shown it's willing to dabble in large scale M&A, the big question is what does it do next? While there's work for Apple to do with respect to digital music and streaming radio, the next frontier could very well end up being streaming video.

Also see: 10 Best Apple Products Ever

If Apple goes there -- and there's no shortage of rumors speculating it will -- the logical place to look to propel the strategy is Hulu. Here's what we know about Hulu:

  • The owners of Hulu -- NBCUniversal (a Comcast (CMCSA - Get Report) subsidiary, Disney (DIS - Get Report) and Twenty-First Century Fox (FOXA - Get Report) -- aren't quite certain how to move forward with Hulu. Maybe they can't get on the same page. I don't know. But they simply haven't maximized the platform's potential.
  • If the owners of Hulu make moves to go full on boar with the platform, they could put serious hurt on Netflix (NFLX - Get Report).
  • The owners of Hulu might actually be able to execute a Hulu grand plan using Apple as a conduit, however the question is ...

Is this -- streaming video -- an area Apple wants to get into?

Must Read: Midday Wrap: Market Mood Sours: StockTwits

I'm on the record -- it makes more sense for Apple to focus on hardware and leave streaming video to others. But, clearly, Tim Cook's willing to alter focus because, there's no doubt Apple's not just buying Beats for the headphones. So, if Apple's going to expand (and revive) its digital music empire, we have to consider the possibility it will do likewise with other streaming media.

Don't forget -- we keep hearing that Apple wants to either enhance the existing Apple TV with content and/or build an actual television set with a significant content component, but can't because major programmers aren't willing to corporate. If there's any truth to this speculation, we must consider how Apple gets it done. A takeout of Hulu could very well represent the endgame.

If Apple buys Hulu it would, ideally, become the cornerstone of Apple TV. If that happens, Hulu's owners would be smart to convene with the rest of the nation's big programmers and agree to sell the most premium content to Apple.

Apple certainly has more cash than Netflix -- or any other streamer for that matter -- will ever have on the books. So it shouldn't come as a surprise to regulators, who might be concerned the programmers are colluding to favor Apple over others, particularly Netflix, that Apple suddenly starts winning all the deals. It wouldn't be collusion; rather it would be that Apple simply decided to open its war chest and get in the game. Thus, it changed the game and we have no choice -- financially -- but to sell the best programming to Apple, the most able and highest bidder.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.60%
CMCSA $60.95 -0.46%
DIS $103.82 -0.52%
FOXA $29.95 -1.40%
NFLX $91.54 -1.70%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs