Apple News, Analysis and Podcasts

Netflix has been a huge streaming success story and has been the chief rival to Apple's so-called hobby, Apple TV. But everything may be about to change. According to Barrons report, Verizon is setting its sites on acquiring Netflix or perhaps even Coinstar (which owns the DVD RedBox rental kiosk business). Verizon acquiring either would be a boon for Apple, as the takeover would likely occur in the timeframe Apple launches its own HDTV with integrated offerings.

Adding fuel to the speculation, Reuters ran a relatively quiet story last week, stating Verizon was looking to take on Netflix with their own streaming service. It now appears Verizon is looking at taking over Netflix in order to eliminate the competition while adding to it's own product line. This would be a strong move for Verizon, if not a telling one, revealing how quickly internet streaming is taking over traditional cable offerings – but make no mistake, the big winner in Verizon's move would be Apple.

According to Stategy Analytics Jia Wu, Apple TV has secured a third of the set top box market, and its main rival has been the relatively cheap Netflix. But Netflix, pressured by Studio's to raise prices or be forced to sit on the sidelines as new content releases went to rivals, split their DVD and streaming services, effectively doubling prices on most customers. The result was nothing short of a mass exodus of customers, with Netflix stock price committing near suicide, falling by nearly half in less than a months time.

Verizon gave Netflix stock a shot in the arm, but Verizon certainly won't offer any cheap stand-a-lone deals for the service. Rather, Verizon would more than likely roll the Netflix' streaming offerings into their bundled solutions, delivering a higher value for it's install base, while dangling introductory offers to would-be customers.

Verizon's acquisition would also kill off millions of current Netflix subscribers that are not with Verizon, will not switch to Verizon, or do not have Verizon as a choice within their region. Customers left in the cold will look for alternate solutions, and Apple is well positioned to pick up an even larger install base.

Apple TV does not currently deliver streaming networks nor monthly subscription packages, but that may be set to change with an integrated HDTV and revised Apple TV in the offing. With Netflix out of the way, subscription based services may be an area Apple is willing to invest in, provided Apple can provide studios with the dollars they are looking for.

Apple would likely make very little with their streaming services, but with lucrative integrated HDTV hardware in the mix, Apple's tried and true model of making margin on physical products, while giving away the software and/or services as a break even solution, fits their business model perfectly and works well with consumers. Apple's Netflix thorn couldn't be going away at better time.

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