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Netflix Departure Awakens the Sharks (but Sadly Unsellable)

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Netflix is ​​in a bit of a bind. service stream the hits like the series offers stranger things could join forces with some competitors to manage advertising. But history shows that media alliances – including your own – can end in chaos. A better idea would be a direct sale from Netflix if that could happen.

One of the two CEOs, Ted Sarandos, confirmed the news Thursday at the annual advertising conference in Cannes, France. Netflix is ​​making strides in incorporating advertising into its subscription service stream of the company worth 80,000 million euros to offer a cheaper package.

Details of the partnership could see Netflix leveraging ad engineering and sales teams through a revenue sharing deal with major media companies. Comcast’s NBC Universal, which operates the competitor stream Peacock and Google, which owns YouTube, could therefore be the main candidates The Wall Street Journal.

But especially in the media business, these deals can quickly go wrong. The Hulu video service launched around the same time Netflix began offering its streaming product. stream. But the multi-ownership structure, which includes Walt Disney and Comcast, hampered its growth efforts.

Initially, Netflix itself made content deals with other media companies that were keen to sell movies and TV series to the group’s founder, Reed Hastings. Those deals fell through when executives realized they were competing with themselves. Instead, Netflix could theoretically be a tempting acquisition target. Its market cap has fallen nearly 70% from $265,000 million at the start of the year. Netflix’s enterprise value is about 15 times future gross operating profit (EBITDA), half the historical average, and at levels not seen in a decade, according to Refinitiv.

And while he’s finally flush with cash, working with a deeper-pocketed company and studio could help fund his ambitious content machine. Well-funded tech giant Apple, with sales of $2.2 trillion, or even $172 billion Comcast, home of Universal Studios, could be potential buyers if the regulatory environment weren’t so strict. Unfortunately, Netflix is ​​not for sale.

FOR MORE INFORMATIONS: BREAKINGVIEWS.REUTERS.COM The authors are columnists for Reuters Breakingviews. The opinions are yours. The translation is the responsibility of EL PAÍS

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Source elpais.com

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