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Jan 30, 2010
Anand Srinivasan

Will Amazon Buy Netflix This Time?

Rumors of Amazon being interested in Netflix are not new. There was talk about this as early as June of last year though at that point, it seemed more unlikely since Netflix’s strategy of staying with physical goods did not fit Amazon’s core philosophy of selling digital content.

However, a lot of things have changed since then. Netflix now allows video streaming and according to its latest quarterly report, 48% of its users at least streamed 15 minutes of video in this quarter. Besides this, Netflix’s subscription model has seemingly been received better among its registered users compared to Amazon’s pay-per-view model. Nearly 97% of the company’s 12.2 million registered users are paid subscribers. All this has given the DVD renting company an overall market value of $3.4 billion.

Collins Stewart analyst Sandeep Aggarwal says Netflix’s recent online streaming model along with newer market dynamics can mean Amazon will be flirting with the idea of acquiring the Los Gatos, CA based company. “There is now even a higher possibility. If someone is a category leader and it is still growing rapidly, they go ahead and acquire it”, he says referring to Amazon’s recent acquisition of online shoe retailer, Zappos.

What do you think? Will a Netflix acquisition be a good fit for Amazon? Let us know in the comments.

[via WSJ]

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