Netflix Inc. (NASDAQ: NFLX | NFLX Price Prediction) is the largest streaming media company in the world, with 300 million subscribers and an annual revenue run rate of almost $50 billion. Amazon.com Inc. (NASDAQ: AMZN) has a subscriber count near 200 million. Netflix is in the business to make money from streaming. Amazon is in the business, in large part, to help it gain Prime members, which drives its e-commerce business more than anything else. And the Netflix and Amazon streaming businesses are starting to face powerful rivals. The Netflix subscriber base would give Amazon a platform to market Prime that it could not find anywhere else.
Netflix would be very expensive for Amazon. It has a market cap of $546 billion, and an offer would need to be north of $600 billion. Amazon’s market cap is $2.31 trillion. During most of the past decade, capital to do a deal would not have been available. Today, private equity and the capital markets are bulging with cash, but there are not enough deals to deploy it all.
Amazon says its future lies in artificial intelligence (AI) and its cloud computing business, where it plans to invest tens of billions of dollars. Its AWS cloud computing business generated $31 billion in revenue last quarter, while its e-commerce business generated $130 billion in revenue. Amazon’s AI challenge is that AWS’s business is under siege from Microsoft, Oracle, and other large AI cloud companies. And forecasts of AI’s wild success remain unproven. One school of thought is that it will never generate significant enterprise revenue, leaving it with little more than individuals who use it as an alternative to Google.
Protecting the Flank
Amazon and Netflix face hard-running competition. The largest, for now, is Disney+, with a subscriber base of 128 million. Combined with the figures from its Hulu operation, that number rises to 183 million. The Wall Street Journal noted that if a Paramount deal to acquire Warner Bros. goes through, the new company will own Paramount+, HBO Max, and Discovery+. The subscriber leads Netflix and Amazon have as standalone businesses start to shrink.
Seventy-five percent of Amazon’s U.S. customers are Prime members. Many have Amazon Prime Video included in that package. Prime members shop on Amazon twice a month on average, while non-Prime members shop about once a month. Netflix would give Prime a massive potential customer base to target. Amazon’s e-commerce revenue would surge.
The Harvard Business Review ran a significant paper in 2011 that was titled “Secure Your Flanks, Protect Your Business.” The future of AI is uncertain. A sharp growth in Amazon’s e-commerce business protects the flanks of its core, largest business.
Netflix Stock Price Prediction and Forecast 2025-2030
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