Netflix desperately needs M&A, but there's also a second 'emerging' threat to deal with
Yahoo Finance ·
Netflix desperately needs M&A, but there's also a second 'emerging' threat to deal with Yahoo Finance Video Tue, July 7, 2026 at 12:10 PM EDT NFLX DIS Citi media and entertainment senior analyst, Jason Bazinet, explains why M&A isn't the only thing Netflix ( NFLX ) needs to be considering. if you think about Netflix, they don't have a lot of IP, but they have a lot of content, where Disney is something that has a great IP but not the depth of content. So they're all trying to solve for something different. So, so for Netflix, getting the IP allows them to get their churn down, get operating leverage on their content. So you could see some M&A there. You can go build iconic IP gradually, but it, you know, it might take 20, 30 years, right? And so buying iconic M&A is a good thing. And and the reason that that the market isn't really embracing Netflix doing M&A is they don't really understand what's underneath the surface. And what I mean by that is, if you asked a Wall Street investor, any buysider, you know, does does Netflix have operating leverage? They would say, oh, yeah, it's a great business. Why? Because their revenue grows faster than their content spend. Okay, so that's operating leverage. What Netflix is trying to solve for is how do I spend a dollar once and have it resonate globally around the world as opposed to what they're doing today, which is spend money in India for Indian engagement, spend money in Germany for German engagement, but never the twain shall meet. So iconic IP, you go buy it and you sort of solve that. And that's why, um, I think buying it makes more sense than building it because building it just takes too long. There's a whole other thread of what's going on in media that has nothing to do with iconic IP, and it really will require a big strategic shift for Netflix, and it's this. If you look at media consumption, not only in the film and television business, but also in video games, also in uh, newspaper publishing, there is a big trend that's just been just taken off over the last 24 months, which is, I call them open platforms, some people call them creator economy, influencer economy. These open platforms like YouTube are just demolishing closed platforms. And this is happening in every single vertical. Why is that happening? It's happening because even though the internet's been around for 27 years and smartphones have been around for 17, it's happening in the last 24 months because these AI tools are able to surface the relevant piece of content uh for you and and that's what's hurting Netflix and helping uh things like YouTube. And that's the only thing that bothers me about about M&A is that Netflix might be pursuing M&A for this iconic IP to solve yesterday's battle, right? And the emerging battle is all about user generated or open open platform.
DYAX Investor Sentiment
Bullish (Long) 48% · Bearish (Short) 52%
463 participants
Related News
- Toyota, Honda see China sales decline as EV demand reshapes market
- International Business Machines shares extend rally into a seventh consecutive session
- Sector Update: Tech Stocks Fall Tuesday Afternoon
- ExxonMobil Trade Can Pump Out A Premium Or Discounted Shares For The Oil Heavyweight
- Netflix signs deal with digital publishers for homepage content
- Shell rises after stronger-than-expected Q2 trading update; analysts expect upward revisions