Sought-after video app: The race for TikTok is on – Why Netflix could also register an interest in takeover alongside Microsoft and Twitter | message
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• TikTok is threatened with extinction in the USA
• Microsoft and Twitter as potential buyers
• Also Netflix interested in taking over?
US President Donald Trump drives a tough course against the Chinese video app TikTok. The politician recently announced an order prohibiting US citizens from doing business with “ByteDance”, the app owner. According to reports, it is in particular concerns about data protection law that are said to have driven Trump to take the step that the collection of user data in large quantities is a “threat to national security,” he said.
Microsoft as a favorite
The White House deadline runs until September 15, until then a solution must be found for TikTok, otherwise the app threatens to end in the important US market. Donald Trump’s move is putting the app operator under pressure: ByteDance is now in a position to quickly find a buyer for the business. One of the possible buyers should be the financially well-resourced Microsoft group, as the US company has already confirmed. After Donald Trump had agreed to the plans, negotiations with ByteDance are to be started as soon as possible – a deal would then be possible under conditions specified by the White House. In addition to the US business, Microsoft is also interested in TikTok’s app service in Canada, Australia and New Zealand, announced Microsoft CEO Satya Nadella.
But at the weekend, a possible second TikTok prospect appeared on the scene, the short message service Twitter. There have already been talks with the Chinese, reported the Wall Street Journal. Even if it is still unclear whether Twitter will actually make a serious bid, it is already clear: Microsoft is ahead in terms of liquidity. The app is valued at tens of billions of dollars – a price that Twitter could only pay with its own shares. Microsoft, on the other hand, has around 130 billion US dollars in liquid capital and could virtually pay the possible price out of the postage.
Why Netflix could consider buying TikTok too
But Microsoft and Twitter aren’t the only US companies that could expand their businesses through TikTok. CNBC is now bringing up another group that should closely monitor developments around the social media hit from China: the streaming giant Netflix.
With the takeover of TikTok, Netflix would open up a completely new field of business that was previously not part of its own corporate strategy. Netflix is still relying on subscriber growth, there is no advertising-financed version of the app, and the corporate level has always vehemently denied claims by analysts and experts in this direction. TikTok, meanwhile, is just starting to monetize its business – with advertising. The approximately 8.8 million users of the app offer an interesting range for brands and companies, TikTok itself wants to boost business and offers content producers monetary incentives. And the potential seems huge: The Wall Street Journal puts the possible group turnover this year at one billion US dollars – for the coming year it could then be six billion US dollars.
Money that Netflix could use, because the US market in particular already seems saturated, which is why Netflix is looking for its salvation in expansion. By purchasing TikTok, the streaming provider could tap new user groups on its home market. But this possible increase in users is not cheap – while Twitter is already financially significantly worse than Microsoft, the situation at Netflix looks even worse. The company is sitting on a massive mountain of billions in debt, and a purchase on the order of TikTok could only be achieved through new debt, which is likely to put a heavy strain on the share price.
On the flip side, TikTok may be a bargain that Netflix shouldn’t miss out on regardless of its budget. Especially since Netflix boss Reed Hastings named the video platform as a direct competitor in his company’s latest annual report. On Vox Media’s Land of the Giants podcast, reported on by CNBC, he added, “A lot of people love video games instead of watching movies and TV shows, or live on YouTube instead of watching movies and TV shows. [ ] Our goal is to be the best in the world when it comes to films and series, and the danger for us is that those other things are more relevant to people. “So by buying the app, Netflix would become a looming competitor Get the boat.
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Image Sources: XanderSt / Shutterstock.com, Netflix