Amazon / Netflix deal makes perfect sense

Amazon’s rumored pending purchase of Netflix sent the price of Netflix shares up instantly Monday. The mainstream press, unable to get any inside info so far, have been making up lists of why the deal would be good or bad. PC World’s Brandon Slattery has the best — well, ok, the longest one so far.

I don’t buy Slattery’s claim that “you can expect subscription prices to soar” for Netflix subcribers. I expect Netflix subscription prices to stay exactly the same. Amazon and Netflix make a good pair. Netflix CEO Reed Hastings has innovated again and again on running the business, to the point where he’s got a Wikipedia entry on “Netflix innovative business practices.” Acquiring Netflix seems like a good deal for Amazon. They can use Netflix as the bargain-but-innovative brand, and charge premium prices for newer and better movies at Amazon.com.

Really, this deal seems like a no-brainer if both companies agree to leave everything alone.

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