Why Netflix still isn’t buying legacy TV networks even as others sell them off

The global streaming platform, Netflix, has undoubtedly taken over the world. With numerous options to choose from, and the comfort and ease of our homes, it has completely changed the scenario of media platforms.

Despite its booming market, it is yet to join the legacy media networks, and unlike some of its competitors, Netflix has shown no interest in this field at all.

It cannot be denied that managing outdated legacy businesses can be a challenge. With each passing year, the viewership of traditional media is decreasing. The rise of social media and independent creators for news and entertainment has undoubtedly taken over a huge chunk of the market.

Netflix’s focus on building rather than buying is truly intriguing. There have been many speculations about this in the media world with rumors circulating that the streaming giant might dip its toes into linear assets.

However, CFO, Spencer Neumann, has shot down all the rumors and explained what its mode of operation can be, looking forward.

What did the Netflix CFO say?

CFO, Spencer Neumann, has said during a Q&A session with analysts after the release of Netflix’s quarterly earnings were released that,

“We agree continued consolidation of studio and network assets is likely, but at least with respect to consolidation within legacy media, we don’t think it materially changes the competitive landscape.”

This itself suggests the lack of interest the company has in linear assets. Adding to this, he also said,

“We’ve historically been more builders than buyers, and we continue to see big runway for growth without fundamentally changing that playbook.”

This undeniably depicts that its main focus has not and will not shift from its current state. What the other competitors of this company might think of as the right path for progress, its ideas are quite different. The company understands the trends and how the market works.

Other details about Netflix’s competitors

While the streaming giant has shown no interest in mergers and acquisitions, its competitors are not thinking the same. If we consider Comcast, which is a media conglomerate, then we will see that it is already in the process of spinning off a significant portion of its NBC Universal cable network into a new company altogether.

This new company’s name is Versant. Similarly, the joint venture of Disney and Hearst has also started to look into a different strategic plan. Warner Bros Discover will also split into two separate companies.

The whole world of entertainment platforms is getting a complete makeover to get more and more ahead in the competition. CFO Spencer Neumann also added in an interview with Deadline,

“We believe we can and will be choosy. We’ve got a great business. We’re predominantly focused on growing that organically, investing aggressively and responsibly into that growth, and returning excess cash to shareholders through share purchases. And I think you’ll see us continue on that path.”

This only puts more focus on how the company's focus is quite different than that of its competitors. In the field of entertainment, growth is the only propelling factor. With the rise of streaming platforms, staying afloat in the competition can be difficult. However, Netflix remains steady in its choices.

Ultimately, the decision to avoid legacy media networks is a clear signal of its future-focused strategy. Rather than taking on the complex challenges that come with it, it is building its own path forward.

Focus on the core strength can be a vital point in building the company. With its aim straight at the future and also reimagining the future of entertainment, Netflix does not want to be weighed down.

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