With iPhone sales down, perhaps temporarily, Apple CEO Tim Cook indicated during the company’s earnings conference call this week that Apple is always on the look out for exciting new technologies and companies to acquire. Not only that, Cook suggested that Apple would be willing to shell out big bucks for a blockbuster acquisition if the right opportunity arose.

We’re always looking in the market about things that could complement things that we do today, become features in something we do, or allow us to accelerate entry into a category that we’re excited about,” Cook explained. Later on, Cook added that Apple “would definitely buy something larger than we bought thus far.”

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Of course, Apple’s acquisition to date was its $3 billion purchase of Beats, a shrewd move considering that its off-shoot – Apple Music – already boasts more than 13 million subscribers.

With Apple apparently eager, or at the very least open to the idea of on opening up its wallet and making a huge acquisition, we’ve already started to see pundits chime in about potential acquisition targets. And one name which not surprisingly seems to be coming up, and has come up before in the past, is Netflix.

From a business standpoint, Apple would love to have Netflix under its umbrella. Not only would it provide an incredible way for Apple to get into the TV business, it would also fit in nicely with Apple’s existing products. Imagine, for instance, every new iPhone, iPad and Apple TV coming with a Netflix app pre-installed. In turn, imagine Apple leveraging its expansive iOS user base to really drive the number of Netflix subscribers higher.

The business synergy – for lack of a better word – is undoubtedly there. The financials, however, don’t make a whole a lot of sense from Apple’s perspective. Truth be told, it makes more economic sense for Apple to compete with Netflix than to buy Netflix. Sure, the idea of a blockbuster acquisition is fun to think about, but Apple can tend to be stingy and they’re not going to make a play for a company if the financials don’t make sense.

As it stands today, Netflix’s market cap is $38.9 billion. Even if Apple tosses on a meager 10% premium, we’re looking at a purchase price of about $41 billion. That’s a huge chunk of change, but certainly something Apple could afford. The return on investment from such a purchase, however, would be laughably low.

For all of 2015, Netflix’s revenue was $6.7 billion. In fact, all of the revenue Netflix has ever earned combined, going all the way back to 2002, doesn’t even reach $32 billion.

Put simply, Apple acquiring Netflix would require vast amounts of money for relatively little revenue in return.

Instead, Apple can simply try to create its own line of programming, something it’s reportedly already trying to do. Not only does Apple already have a six-episode series in the works starring Dr. Dre, it recently released a series called The Score which focuses on various local music scenes around the world. Furthermore, recent reports indicate that Apple is hoping to get into the original content business in a major way.

A Fast Company report from a few weeks ago notes:

The second lane—which for now is more deeply undercover—is an effort to do what Amazon and Netflix have done for their tens of millions of users: offer its own original TV-style entertainment. Apple being Apple, though, it not only wants to find its own House of Cards, but it wants several of them at once.

An ambitious goal, but certainly one within the realm of possibility. And more importantly, competing with Netflix, rather than buying them out, would be drastically cheaper.

As we’ve noted previously, it would cost Apple $538.5 million to come up with 10 quality TV programs. As a few quick illustrative examples, here’s how much it costs to produce one season of the following shows:

  • Game of Thrones – $60 million
  • House of Cards – $50 million
  • Mad Men – $39 million
  • Breaking Bad – $39 million

The only question, I think, is how fast Apple can manage to get into the TV content business. The longer it waits, the more challenging it will be for them to jump right in and make a splash. At the same time, if Apple opts to make its potential TV offerings a package deal under Apple Music, which is to say unlimited streaming music and TV content all for $10, that’s a compelling value proposition right there.

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