Best Buy netting Netflix for a tidy $44?

May 17, 2008

Best Buy netting Netflix for a tidy $44?With electronic retailers looking to expand business to new frontiers, it should come as little surprise that the big players are forming alliances to better expand and market business. Rumor has it, by way of a very reputable industry source, that electronic retailer giant Best Buy might be looking to acquire video rental company Netflix, and for the very recession-friendly price of $44…about one tank of gas?

By way of Silicon Alley Insider, there are murmurings that Best Buy could be looking to purchase the leader in the video rental service for the sum of $44. That might seem crazy, but the discussion stemmed from a 6% increase in Netflix’s stock volume.

Currently there is a partnership between the runners up in both the electronic retailing market as well as the video rental market, Circuit City and Blockbuster. The suggested partnership of Best Buy and Netflix could, for one, combat that alliance, as Best Buy and Netflix each hold the title of “top dog” in their respective markets.

The Insider also points out that the partnership between Best Buy and and Netflix could be symbiotic in execution. Best Buy would undoubtedly profit from being able to sell Netflix subscriptions to customers in stores, and Netflix would greatly expand its marketing capacity to Best Buy locations.

On a personal note, I could see hardware/subscription deals in the works; customers interested in buying new HD sets or DVD or Blu-ray players might be able to get a limited free subscription to Netflix, or Netflix customers might receive coupons for Best Buy electronics.

The Insider suggests that, as media boxes with download services for renting or buying video content are becoming all the rage, a partnership between Netflix and Best Buy could give the duo a leverage position to control subscription and hardware prices of media box manufacturers.

Obviously, the $44 price tag would be more indicative of a partnership, rather than a buyout, per se. However, if Netflix is selling itself on the street corner like a tawdry hussy for $44, I will gladly sacrifice a tank of gas to get in on that gravy train.

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