Microsoft could buy a company like Netflix in 2012, says IDC

Microsoft could buy a company sometime in 2012 that provided content via cloud computing services. That's the conclusion from the research team IDC in a new report that goes over the growth of cloud computing in the IT world and predicts what might happen to that technology business in the future.

In Microsoft's case, IDC states that in its opinion, Microsoft could acquire a "content/media cloud ... to provide a marketplace for its apps and content." The IDC report specifically names the streaming movie/TV show business Netflix as one of the possible companies that could be in Microsoft's targets for a purchase.

The idea of Microsoft buying Netflix might have seemed implausible just a few months ago when Netflix's stock price was riding high. However, that all changed in the summer of 2011 when Netflix raised the subscription prices by as much as 60 percent for some of its customers. That caused Netflix to lose subscribers at a higher rate than predicted and as a result its stock price has plummeted.

Overall, IDC predicts that spending in the IT industry will total $1.8 trillion worldwide in 2012 which would be a 6.9 increase compared to IT spending in 2011. It sees that much of that growth, about 20 percent, could come from emerging technology divisions such as "smartphones, media tablets, mobile networks, social networking, and big data analytics."

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Why doesn't Microsoft spend more money on making Windows 8 more better, Visual Studio's C++ C++11 support not be half arse done, rather than just spending money on buying out every company on the planet. Oh, how about spend the money they "are" on this company, but rather give it to charity, or something, rather than wasting it.

I think Microsoft would also buy some sort of E-book company too. My guess is B&N. It has a market capitalization of around a billion dollar.
All of it's competitors have something like it. Apple has iBooks, Google has Google Reader, and even Amazon has Kindle.

FMH said,
But B&N is doing very decently, and also won't hurt Microsoft's pocket that much.

It also wouldn't hurt to partner with them and possibly get some exclusive content for Windows-based devices. They don't need to acquire everything just to offer something.

FMH said,
Apple has iBooks, Google has Google Reader, and even Amazon has Kindle.

Correction: Google has Google Books.

Google Reader is a Web-based aggregator, capable of reading Atom and RSS feeds online or offline. Two very different services.


Thanks for the correction.
I couldn't remember it's name, but Google Reader seemed familiar so I thought it was it.

FMH said,

Thanks for the correction.
I couldn't remember it's name, but Google Reader seemed familiar so I thought it was it.

It's too similar. The names are deceiving.

I have to say out of all the Netflix Apps I have used (Google TV, Sony Blu-ray, Playstation 3, Wii, iOS, Android and Xbox 360) the Xbox 360 Netflix App is the best.

UndergroundWire said,
I have to say out of all the Netflix Apps I have used (Google TV, Sony Blu-ray, Playstation 3, Wii, iOS, Android and Xbox 360) the Xbox 360 Netflix App is the best.

Now if only we could see all movies in the catalog without having to text-based searches.

wixostrix said,

Now if only we could see all movies in the catalog without having to text-based searches.

I have a lot on my Queue. Personally, I don't care about that feature.

All I want is a Zune Video Pass to go with my Zune Music Pass where I can watch unlimited TV Shows and have 5 Movie Rentals a month for $20 - $30/month. I'd cut the cord and just buy whatever other movies "ala carte." With this, I could cancel my Netflix and Hulu accounts and be happy.

Drewidian said,
All I want is a Zune Video Pass to go with my Zune Music Pass where I can watch unlimited TV Shows and have 5 Movie Rentals a month for $20 - $30/month. I'd cut the cord and just buy whatever other movies "ala carte." With this, I could cancel my Netflix and Hulu accounts and be happy.

Now that would be the the *hit!

Yeah, how is this really news? Microsoft could buy 25,000 golden ponies in 2012. Leonardo DiCaprio could star in another movie in 2012. The economy may get better in 2012. It sounds silly, as if it came from The Onion.

Any company could do pretty much anything in 2012.

If this is true, what would be the benefit for the customers who are with Netflix at this moment? Better pricing? more movies to stream? I do not get this latest rumors about someone is going going to buy Netflix. A lot of customers that left good riddance and who cares, they did not bother understanding why Netflix did what they did so again who cares.

The loss of customers affect existing customers. If the content providers don't adjust prices then Netflix will have to raise prices for existing customers or drop content. If the costs get to high and the revenue too low then say good by to Netflix. I do agree a lot of people did not think about why Netflix did what they did but what Netflix was saying was all a lie anyway. Overall, even with the price changes it is still a deal. Read my post above about why I think Netflix lost revenue and customers.

BillyJack said,
The loss of customers affect existing customers. If the content providers don't adjust prices then Netflix will have to raise prices for existing customers or drop content. If the costs get to high and the revenue too low then say good by to Netflix. I do agree a lot of people did not think about why Netflix did what they did but what Netflix was saying was all a lie anyway. Overall, even with the price changes it is still a deal. Read my post above about why I think Netflix lost revenue and customers.

It is very true that Netflix did lie about the price raising because the way they just raised 60% i was like WOW! But I remember when they offered a good amount to keep Starz they still turned it down which also proves movie/TV studios are greedy and want to screw customers also. Billy pretty much everything you said makes sense because I am taking Accounting 102 hehe. CEO of Netflix should have looked at where they need to cut down on so they can pay off the studios instead they decided to raise the price not thinking what would happen if they did that. They should have checked at their budget sheets and see what they need and did not. Not only that, their website went backwards, instead of improvements they removed all the good things customers enjoyed about Netflix. I for one enjoy streaming but the lack of quality such as new movies or tv series, terrible HD quality or even 5.1 Surround sound (I guess that depends on what player you are watching) annoys me. They also need more Blu-ray movies since they terribly lack on that also. You go to Blockbuster website Not only you get new movies released on the same day they also have choices for of different versions of the movie where Netflix also does not have.


You understand what I am saying? Sorry if my english sounds like i am just jabbering.

TsMkLg068426 said,

It is very true that Netflix did lie about the price raising because the way they just raised 60% i was like WOW! But I remember when they offered a good amount to keep Starz they still turned it down which also proves movie/TV studios are greedy and want to screw customers also. Billy pretty much everything you said makes sense because I am taking Accounting 102 hehe. CEO of Netflix should have looked at where they need to cut down on so they can pay off the studios instead they decided to raise the price not thinking what would happen if they did that. They should have checked at their budget sheets and see what they need and did not. Not only that, their website went backwards, instead of improvements they removed all the good things customers enjoyed about Netflix. I for one enjoy streaming but the lack of quality such as new movies or tv series, terrible HD quality or even 5.1 Surround sound (I guess that depends on what player you are watching) annoys me. They also need more Blu-ray movies since they terribly lack on that also. You go to Blockbuster website Not only you get new movies released on the same day they also have choices for of different versions of the movie where Netflix also does not have.


You understand what I am saying? Sorry if my english sounds like i am just jabbering.


Everything you wrote is clear. Yes Netflix did change their interface and made it worse. They have shady tactics to hide new content. All the points you made are more reasons customers get unhappy with them. I also agree that the content providers (movie/TV studios) were greedy. I just left that out of the equation since we are talking about Netflix. The way I see it, all of those companies will take a loss. Netflix not willing to pay up took a big loss. The content providers are greedy and did not find a sweet spot to settle on with Netflix so they did not sell there content. The way I see it no matter what the price is the content providers will make money. One dollar is more than no dollar. I am not sure who is paying the costs to convert material but it probably does not cost that much anyway. Lets say that the content providers convert the material at X cost. Then any content they sell above X is money made. Of course this does not take account for losses in other areas due to the affect of providing this content through Netflix. That would be hard to trace if it is exactly due to customers using Netflix or for other reasons. If they show their movies and TV shows on Netflix will people stop watching it on TV, in theaters and buying media? Probably but we do not have those numbers. Either way both will have a loss from no deal.

Business can be tough but you have to do what you have to do to make money. Here is an example. If a auto shop is not getting any business they still have to pay their mechanics regardless of business. Unless they are only payed for the work they actually do, get laid off or fire them. If they lower their prices and bring in customers they will get some money. They may not make money or even take a small loss but they will be able to pay their mechanics and the loss will be smaller.

I really hate these researchers.
Zune is the media cloud, and Microsoft are making alliances with content providers the world over.

Buying a content provider would put Microsoft in direct competition with their Mediaroom customers. Not smart.

Unless Netflix starts showing some stability, nobody is going to touch it with a 400 ft pole. For all we know, it's stock will be worth $5 by next year.

Astra.Xtreme said,
Unless Netflix starts showing some stability, nobody is going to touch it with a 400 ft pole. For all we know, it's stock will be worth $5 by next year.

It's a shame they only lost their stability because they realized instant streaming had to stop being an 'experiment' and had to start standing on its own with its own fee and all the users freaked out because their free 'bonus' stopped being free.

Joshie said,

It's a shame they only lost their stability because they realized instant streaming had to stop being an 'experiment' and had to start standing on its own with its own fee and all the users freaked out because their free 'bonus' stopped being free.

Well they basically tried to pull a 180 with the business model. Increasing the prices and also breaking the business in half wasn't going to excite the customers. And then when the CEO gave in with his tail between his legs, it showed a huge sign of weakness and uncertainty. It's probably to the point where if the CEO got booted out, the stock would go up.

I don't think people freaked out. I think people gained options and they made their choice. When the DVD was combined with streaming people were paying for DVD with free streaming regardless if they used one or the other services. Once Netflix changed to individual fees people made their choice. People who use mostly streaming stuck with streaming and dropped the DVDs. People who use the DVDs stuck with DVDs and dropped streaming. People realized they only really use one of the services and did not use the other. Therefore, Netflix cut their revenue almost in half instantly. Yes some people stuck with both services but most did not.

Netflix was sitting happy because they had an early start and almost all devices only had Netflix and not the other services. People signed up at the time for Netflix and stuck with them for a long time. Once people got a new device with other services they probably stuck with Netflix because it was a good deal and they were already signed up anyway. Streaming and DVDs is better than only streaming. (Ignoring the content.) Then after Netflix made the change and people decided to stick with only one service they probably figured why stick with Netflix? I can get streaming from other services for similar price. Since the steaming services were now comparable people became willing to decide on other services. Netflix looses more customers.

Netflix claimed to raise prices to fund increasing content prices. When in reality they were aggressively trying to grow overseas with our money. At the same time they got even more greedy and played hard ball with content providers. They did not make a deal and buy the content they were claiming to increase prices for. Now without that content some people are leaving Netflix.

All of their mistakes add up and totals a big loss.

BillyJack said,
I don't think people freaked out. I think people gained options and they made their choice. When the DVD was combined with streaming people were paying for DVD with free streaming regardless if they used one or the other services. Once Netflix changed to individual fees people made their choice. People who use mostly streaming stuck with streaming and dropped the DVDs. People who use the DVDs stuck with DVDs and dropped streaming. People realized they only really use one of the services and did not use the other. Therefore, Netflix cut their revenue almost in half instantly. Yes some people stuck with both services but most did not.

Netflix was sitting happy because they had an early start and almost all devices only had Netflix and not the other services. People signed up at the time for Netflix and stuck with them for a long time. Once people got a new device with other services they probably stuck with Netflix because it was a good deal and they were already signed up anyway. Streaming and DVDs is better than only streaming. (Ignoring the content.) Then after Netflix made the change and people decided to stick with only one service they probably figured why stick with Netflix? I can get streaming from other services for similar price. Since the steaming services were now comparable people became willing to decide on other services. Netflix looses more customers.

Netflix claimed to raise prices to fund increasing content prices. When in reality they were aggressively trying to grow overseas with our money. At the same time they got even more greedy and played hard ball with content providers. They did not make a deal and buy the content they were claiming to increase prices for. Now without that content some people are leaving Netflix.

All of their mistakes add up and totals a big loss.

Bingo. Well said.

Why would they do this when they already have so many streaming services coming with the Xbox Dashboard update? Not to mention the dashboard is being integrated into Windows 8, so ideally, all those services would exist on PC and tablets as well.

I think they should just stick to maintaining partnerships and selling content a la carte. Plus, they already have a huge video content library. If they wanted to offer a Netflix like streaming services, they already have the foundation for it.

But they would have to work out contracts with the media companies. Netflix already has those contracts, the infrastructure and the users.

/- Razorfold said,
But they would have to work out contracts with the media companies. Netflix already has those contracts, the infrastructure and the users.

Microsoft too has infrastructure and a huge pool of existing Xbox Live users with many more to come with Windows 8. Microsoft can make deals. In fact the content providers would benefit from this since they'll be collecting revenue from yet another source yet they would be pretty much overlapping current services.

Yes I know that but if they bought out netflix they could integrate it into their current Zune / Live offerings. They could do that without having to negotiate contracts, and we all know Microsoft sucks when it comes to that.

Not to mention, they could make it a Microsoft only thing.

wixostrix said,
Why would they do this when they already have so many streaming services coming with the Xbox Dashboard update?

but they could just buy one of the companies that are in the update considering they are getting alot mroe coverage then before they were on the xbox.. i kinda was thinking crackle.com just because i have never heard of it but its included in the dashboard update

wixostrix said,
Why would they do this when they already have so many streaming services coming with the Xbox Dashboard update? Not to mention the dashboard is being integrated into Windows 8, so ideally, all those services would exist on PC and tablets as well.

I think they should just stick to maintaining partnerships and selling content a la carte. Plus, they already have a huge video content library. If they wanted to offer a Netflix like streaming services, they already have the foundation for it.

I agree. Steve Ballmer and Bill Gates intend to keep Microsoft as purely a software company as they can. This is one of the reasons why it was a fairly easy decision for them to discontinue manufacturing the Zune hardware and focus on the Zune software to ensure it works on every Windows Phone.

I don't think Microsoft wants to stray far away from software. They prefer to leave it all up to partners to deliver the entertainment/content and Microsoft provides the platform. If anyone would buy Netflix it might be Apple or Google.

Lachlan said,

but they could just buy one of the companies that are in the update considering they are getting alot mroe coverage then before they were on the xbox.. i kinda was thinking crackle.com just because i have never heard of it but its included in the dashboard update

I think Microsoft should stay away from acquitting industry leaders for a bit. They have a history of anti-competitive practices and they don't need to give reason for people and organizations to accuse them of anti-competitive. Buying Netflix from a financial standpoint is probably solid, but Microsoft has the resources and means to deliver internally grown services without risking potential anti-trust allegations. Crackle is junk by the way. They play commercials during movies, and a crap ton of them.