Per Hacking Netflix:
It seems every few months a rumor goes around about Amazon wanting to buy Netflix, but the sales tax issue (Netflix has shipping centers in most states) has prevented the deal so far. However, Michael Pachter (I know, I know...) thinks that Netflix has split the company to enable Netflix to sell the streaming division to Amazon. From Forbes:
“Upon reflection, it appears to us that the driver for the separation of Netflix into two businesses—Netflix.com (for streaming) and Qwikster.com (for DVD rentals) —was to position the streaming business for sale to Amazon.com,” he writes in a research note. “In our view, Amazon has always wanted to be in the streaming business, and has been constrained from buying Netflix due to tax considerations. The split up of Netflix’s business addresses the state sales tax issues raised for Amazon in having a ‘nexus.’ If Amazon were to acquire only Netflix’s streaming business, it could triple the size of its content library, and gain traction as an industry leader. Netflix streaming has current content deals that provide it with access to movie content during the premium cable TV window, and Amazon has the financial resources to secure additional streaming rights, including Starz content. Netflix’s financial flexibility is quite limited, while Amazon’s is virtually unlimited.”
It seems every few months a rumor goes around about Amazon wanting to buy Netflix, but the sales tax issue (Netflix has shipping centers in most states) has prevented the deal so far. However, Michael Pachter (I know, I know...) thinks that Netflix has split the company to enable Netflix to sell the streaming division to Amazon. From Forbes:
“Upon reflection, it appears to us that the driver for the separation of Netflix into two businesses—Netflix.com (for streaming) and Qwikster.com (for DVD rentals) —was to position the streaming business for sale to Amazon.com,” he writes in a research note. “In our view, Amazon has always wanted to be in the streaming business, and has been constrained from buying Netflix due to tax considerations. The split up of Netflix’s business addresses the state sales tax issues raised for Amazon in having a ‘nexus.’ If Amazon were to acquire only Netflix’s streaming business, it could triple the size of its content library, and gain traction as an industry leader. Netflix streaming has current content deals that provide it with access to movie content during the premium cable TV window, and Amazon has the financial resources to secure additional streaming rights, including Starz content. Netflix’s financial flexibility is quite limited, while Amazon’s is virtually unlimited.”
