Media Mergers Are Bad News for Netflix

Netflix (NASDAQ: NFLX) has been a thorn in the side of major media companies for years now, but only recently have TV and movie studios started fighting back. Disney (NYSE: DIS) announced plans to take its films off Netflix earlier this year, opting to offer a direct-to-consumer streaming service of its own. 21st Century Fox (NASDAQ: FOXA) hasn't been renewing its most popular TV series on the streaming service, as it moves to offer its own commercial-free viewing experience distributed through pay-TV providers. And other media companies like Time Warner (NYSE: TWX) have considered extending the window between a show's original air date and when it shows up on streaming services like Netflix.

The recent report that Disney held talks with Fox to acquire its film studio and some of its cable networks should concern Netflix investors. Even though the Disney-Fox deal is dead, there's still a considerable amount of merger and acquisition talk throughout the media industry. As media companies join forces, they gain greater leverage over Netflix and could produce more competition in the streaming video-on-demand (SVOD) market.

Image source: Netflix.

Continue reading

Source: Fool.com