What I Would Do with Netflix if I Were Facebook and Just Acquired Them
Scott is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
People LOVE to watch movies together. When I look back over my decades past, through various life stages, among the common memories I remember with pleasure are the "movie nights" with old friends.
The integration of all three services would seem a natural fit and plausible when considering that Facebook and Skype are already integrated to some extent and CEO Reed Hastings is on the board of Facebook. He also has a relationship with Microsoft having spent several years on the board until he resigned in November. This would also be a possible source of revenue for Skype as it could significantly increase the sale of Skype "credits." Netflix could also increase subscribership by having the "movie night" promoted through Skype and Facebook. Of course Facebook could also increase revenue by owning Netflix.
That being said, when Hastings founded his first company, Pure Software, as a software engineer, he had little experience managing people and running a business. Hastings learned many valuable lessons from the school of hard knocks before he founded his second start-up that is Netflix. Mark Zuckerberg is now learning the same lessons as a younger and less experienced CEO and would benefit from the experience of acquiring Hastings. Perhaps Facebook could benefit by making Hastings president while Zuckerberg serves as CEO.
M&A speculation aside, Netflix could certainly implement the Movie Night without the assistance of Facebook, but I tie the three together because of the aforementioned synergies.
The idea of a three-way integration came to me a year ago as I joined my father and an old friend of mine who reside in Pittsburgh for a Civil War documentary. I had them point the lap top camera toward my father's television while I watched with them from Palm Beach, Florida. It was a fun evening that clearly would have been more effective if there was a way to watch the film in "first generation" as opposed to a web cam shooting a television screen. My father, like many including myself, uses an HDMI cord, so he can still watch Netflix on his large flat screen television with the streaming content running from his laptop computer.
This is the direction in which streaming is heading, so they might as well get started now. I suspect that I am not the only person in America who has tried this method of achieving a long distance movie night and I believe the demand will grow exponentially. Hence, I smell opportunity here.
Scott Ryan Anderson has a long position in Netflix and no position in Facebook or Miscrosoft. The Motley Fool owns shares of Facebook, Microsoft, and Netflix and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Facebook, Microsoft, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!