Netflix bosses said Tuesday that consolidation in the media sector hasn’t impacted its growth and that the streamer doesn’t see any ‘must have’ deals to jump on in the midst of an industry M&A frenzy, although it looks at everything.
In a letter to shareholders at the release of its mixed second-quarter earnings report, founder-CEO Reed Hastings said the planned combination of Warner Media Group and Discovery and Amazon’s pending acquisition of MGM “are examples of the ongoing industry consolidation as firms adapt to a world where streaming supplants linear TV. The industry has consolidated materially over the years (Time Warner/AT&T, Viacom/CBS, Discovery/Scripps, Disney/Fox, Comcast/NBCU/Sky, etc.) and we don’t believe this consolidation has affected our growth much, if at all.”
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“While we are continually evaluating opportunities, we don’t view any assets as ‘must-have’ and we haven’t yet found any large scale ones to be sufficiently compelling to act upon,” he said.
It’s the first time quarterly letter the exec has had to specifically address M&A considerations given all the noise and amid investor jitters that rivals may be nipping at Netflix’s massive first-mover advantage. North America showed signs of saturation last quarter and forecasts for global net subscriber ads in the current third quarter were well below analyst estimates. Netflix has blamed the pandemic for “choppiness” in quarterly results.
Netflix unlike others in entertainment and tech has done really done only one acquisition of any significance, buying comic book publisher Millarworld — home of Kick-Ass, Kingsman and Old Man Logan — in 2017.
Hastings also noted as he has in the past that “in the race to entertain consumers around the world, we continue to compete for screen time with a broad set of firms like YouTube, Epic Games and TikTok (to name just a few). But, we are mostly competing with ourselves to improve our service as fast as we can. If we can do that, we’re confident we can maintain our strong position and continue to grow nicely as we have been over the past two-plus decades.”
One big difference today — especially with reference to Epic — is that Netflix itself is getting into the gaming business.
It’s also launched an online store to try out consumer products as it develops franchises like The Witcher.