Netflix on Acquisition Spree: Ramping Up Deals After 25 Years

Its soaring share price has some company watchers saying the timing's good for a bigger deal.

Netflix has used M&A as a way to propel its efforts to build franchises around well-known content.

The company has acquired eight content and gaming companies since 2017, four of them in 2022 alone.

Netflix has also picked up a visual effects studio, Scanline VFX; an LA theater; some billboards; and property to build an $850 million production studio in New Jersey.

Most of Netflix's acquisitions are believed to have been in the tens of millions.

Netflix could potentially look at gaming, advertising, or sports companies for future acquisitions.

Netflix announced its first subscriber loss in a decade in the spring of 2022 and warned of more losses.

The company began to build an advertising business, leading to speculation it might buy an adtech company to help it scale up.

Netflix faces competition from big competitors like Disney and Warner Bros.

Discovery with rich libraries of IP like Star Wars, DC Comics, and Harry Potter that Netflix lacks.

Netflix has a small, methodical deals team led by Spencer Wang, VP of finance, IR, and corporate development.

The company's M&A strategy is to accelerate its growth through acquiring IP that can be developed into films and series, film and TV libraries, and gaming.

Netflix is also considering buying smaller sports assets like the World Surf League.

With the media and entertainment industries on an inevitable march towards consolidation, there is internal debate about what role Netflix should play, with some wanting it to make bigger moves.

Netflix has explored Paramount for its studio business and looked at MGM before it was bought by Amazon.

Netflix has a partnership with Studio Dragon and CJ ENM.

There is debate over whether Netflix could succeed in video games, which have recently had success in TV and film adaptations.

If Microsoft buys Activision Blizzard, Netflix could consider Epic Games, whose Fortnite game is a competitor for eyeballs.

However, Netflix leadership has stated that their M&A strategy is to focus on building rather than buying.