Apple execs describe a “unique arrangement” with Netflix (2018) • Hacker News Board

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#231

Post by EugeneG » Tue, Oct 05, 2021, 2:11 AM UTC

they4kman wrote: post #206

martimarkov wrote: post #199

Earlier quoted context omitted.

Maybe this is not a popular opinion but I think that Apple do provide the value. They created the device, the OS, the marketing behind it, the physical stores, all of that. The iPhone is an iconic device because of all the investment Apple put into it. Yes, there are also the millions of developers and apps out there. But the one thing that Apple did right (for me and I guess most iOS users) is that they kept control…

The customer wants convenience, the developer wants to give convenience, and Apple charges 10-30x the going rate of merchant fees for it. And neither the developer nor the customer can pick a different style of convenience. I don't think it can be a free market if customers can't choose another option and developers can't compete with existing options.

"It's not a free market! Apple sucks and I want to use different products... and sure there are countless alternatives available for purchase online and in stores... but I can't and I don't switch because I love Apple and it has the best product and the others aren't as easy to use. Tyranny!"

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#232

Post by atdrummond » Tue, Oct 05, 2021, 2:14 AM UTC

Wowfunhappy wrote: post #224

smoldesu wrote: post #204

Earlier quoted context omitted.

Moreover, Netflix is an app that would work perfectly fine in the browser. Netflix was providing a native app as a courtesy to the customer, not the other way around. Most Netflix subscribers I know would probably shake their fist at Apple and God and then go back to binging Friends in Safari.

I don't think you can do EME in mobile safari? That would probably be a dealbreaker for the movie studios (logical or not).

I know they added FairPlay in 2018 to Safari on iOS, so I assume it is likely that additional EME support has been enabled since.

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#233

Post by caf » Tue, Oct 05, 2021, 2:26 AM UTC

martimarkov wrote: post #199

jacurtis wrote: post #145

Earlier quoted context omitted.

For comparison Netflix spends about $1.2 Billion dollars per year on AWS (Amazon Web Services). Their total revenue last year was 27.5B. So that means that AWS fees account for 4.3% of Netflix's revenue. AWS is streaming video, operating hundreds of edge location CDN locations, and everything else running on expensive server infrastructure. AWS has real serious costs with offering that service, to the point that Netf…

Maybe this is not a popular opinion but I think that Apple do provide the value. They created the device, the OS, the marketing behind it, the physical stores, all of that. The iPhone is an iconic device because of all the investment Apple put into it. Yes, there are also the millions of developers and apps out there. But the one thing that Apple did right (for me and I guess most iOS users) is that they kept control…

If an app was allowed to say "you can sign up in the App Store for $X, or you can sign up directly on our website for $(0.7 X)", shouldn't that satisfy you? You'd be able to have your convenient UX and keep your financial relationship solely with Apple - paying the full price for that benefit - and others who are happy for the less convenient UX and having a direct financial relationship with the developer will not have to pay for something they don't want.

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#234

Post by asdff » Tue, Oct 05, 2021, 2:36 AM UTC

saagarjha wrote: post #221

asdff wrote: post #144

Earlier quoted context omitted.

My tinfoil hat theory is they allow the jailbreaking scene to persist instead of shoring up holes within a second of each jailbreak's release because they poach tweak ideas. When looking at the overlap between popular early jailbreak tweaks and features that were added to iOS over the years, this really doesn't seem farfetched.

The Apple of today does fix holes as soon as they can. But they don't really need to steal jailbreak tweaks anymore to figure out that people want to be able to change their homescreens…

There was a lot more than that which was copied, honestly. Notification center. Control center. Widgets. Low power mode. Notifications where you can reply in line. Probably hundreds more tiny quality of life things too that have made their way into iOS over the years that were first seen on cydia. Here's a list of 60 of them at least (2018):

https://ios.gadgethacks.com/how-to/60-ios-features-apple-sto...

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#235

Post by atdrummond » Tue, Oct 05, 2021, 2:39 AM UTC

AnthonyMouse wrote: post #176

abvdasker wrote: post #77

Earlier quoted context omitted.

This is a solved problem. Just do what most American cities do with other natural monopolies like utilities: use careful price controls to cap margins and slow rate increases. You don't need to invent some esoteric market-based solution, especially for a service where marginal costs are near zero and supply is almost infinite.

> Just do what most American cities do with other natural monopolies like utilities: use careful price controls to cap margins and slow rate increases. Nothing Apple does is a natural monopoly. Artificial monopolies can be maintained through vertical integration. If you don't like their app store, use another one. If all they provide is the app store, that's easy, and every platform would have half a dozen or more. B…

What is relevant is that the App Store is a natural monopoly within the iOS ecosystem. As long as Apple has such significant market power (including a substantial market share, especially as a percentage of revenue, not just units sold) their natural monopoly on the iOS platform will extend to them being a willing participant in an oligopoly.

Said state of affairs is the expected outcome of Apple having a natural monopoly and there being only one other substantial mobile OS market participant, who just so happens to also operate a natural monopoly for app sales - albeit a much, much more tenuous one.

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#236

Post by caf » Tue, Oct 05, 2021, 2:43 AM UTC

tsuujin wrote: post #157

jw1224 wrote: post #91

I wonder why Netflix don’t want their content to be searchable in Apple’s TV app: > “Since TV App is not going to happen right now, there’s nothing else to get from Netflix at this time” The TV App is actually pretty great — one of the few parts of the Apple ecosystem where the garden walls are very low. I can search for a TV show or film, and even when the iTunes Store has it available, TV still suggests I watch it…

Since picking up an Apple TV, my Netflix consumption is down to zero. Everything else is right there in the main UI, and it provides zero incentive for me to open their app. At least from my perspective, Netflix really dropped the ball on this decision.

I believe this is helping illustrate why Netflix made this decision.

Sure, right now they'll lose a few people like you who cbf switching apps to see what's on Netflix - but they're banking that there's a lot more who will resign themselves to switching apps for the show they want, because they're used to finding their Netflix shows in the Netflix app anyway.

Whereas if they join TV App, they'll be training their users to find their content in TV App - which gives Apple a lot of leverage. Now a threat to kick them out of TV App has teeth - because there will be a lot more users like you, who've grown accustomed to finding their Netflix shows in TV App, and won't know to go switching apps to find it.

They don't want to hand Apple a club to beat them with.

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#237

Post by JohnBooty » Tue, Oct 05, 2021, 2:51 AM UTC

richardw wrote: post #198

JohnBooty wrote: post #187

Earlier quoted context omitted.

Apple by comparison demands 15% which is 3.5x as much of a cut. Apple provides credit card processing, and approval into the App Store (plus according to a comment in this email, it sounds like they keep Netflix in the App Store promotion rotation as "free" ad-space). This isn't anywhere near the value that AWS provides That's debatable. To put it mildly. Apple provides them access to, literally, nearly a billion pot…

Apple’s value is the set of customers who sign up first on iOS rather than web (edit: and who couldn’t be nudged to the web). I’d guess the number isn’t the full billion, but enough that Netflix doesn’t want to lose them.

Anecdotally, there are a lot of "app only" users out there who aren't familiar with opening up a browser application and typing in a URL. I don't know what percentage of users we're talking about, there.

But I have experienced plenty of users that are comfortable with tapping an app on their phones, and even installing one from an app store, but aren't comfortable with using a web browser.

It's not just older, non-technical users. Lots of kids have never known anything but apps. You know how your "average" Mac/PC user would have looked at you funny if you told them to open a terminal or command prompt 15 years ago? That is how many kids view a web browser these days - a slightly weird relic of an earlier time.

(Just to be clear: I detest this state of affairs!)

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#238

Post by JohnBooty » Tue, Oct 05, 2021, 3:15 AM UTC

danShumway wrote: post #212

JohnBooty wrote: post #187

Earlier quoted context omitted.

Apple by comparison demands 15% which is 3.5x as much of a cut. Apple provides credit card processing, and approval into the App Store (plus according to a comment in this email, it sounds like they keep Netflix in the App Store promotion rotation as "free" ad-space). This isn't anywhere near the value that AWS provides That's debatable. To put it mildly. Apple provides them access to, literally, nearly a billion pot…

> Apple provides them access to This is in many ways the same argument that ISPs used during the net neutrality debates as to why Netflix should have to pay them extra money. Netflix was using all the bandwidth, and ISPs were keeping that access fast... blah, blah, blah. Many of the objections that I had to ISPs trying to double-dip on bandwidth fees back then also apply to this idea that Apple's product to Netflix i…

    This is in many ways the same argument that ISPs used during 
    the net neutrality debates as to why Netflix should have to 
    pay them extra money.

The parallels are there for sure. I would agree that gatekeeping is bad, and I often don't like how Apple behaves as gatekeeper.

But there are massive key differences as well. Many ISPs have a local monopoly over broadband access. Many people have only a single choice for a broadband ISP and this can't be changed unless they move to a new address.

By contrast, Apple doesn't even have a majority share of the mobile device market, much less a monopoly. Even if Apple booted Netflix out of the App Store tomorrow (or if Netflix packed up their bags and left) there are still myriad ways one could access Netflix.

The same would not remotely be true if one's ISP blocked Netflix or demanded extra money to use it. Many people have no ISP alternative, and may be locked into contracts. You are under no such contract with Apple. You can switch to another device tomorrow, or use literally dozens of competing operating systems and platforms at the same time.

    Apple benefits heavily from Netflix being on their 
    platform, they would lose a lot of customers if 
    every content provider decided to leave iOS tomorrow

Absolutely, sure. I asserted that Netflix derives massive value from Apple's platform and payment system. I didn't assert that it was a one-way street. Apple benefits as well, no doubt.

    It's very difficult to argue that Apple has invested in 
    best-of-class hardware for Netflix's sake.

Nobody's arguing that.

The same could be said of AWS. Amazon didn't create it solely for Netflix's sake. But more importantly: huh?

    We all know that it's the other way around.

Again, what does it matter whether or not apps are 1st or 729th on Apple's list of priorities? The question is whether or not Netflix derives value from their relationship with Apple, or not.

Jobs didn't originally want an App Store, yeah, but that was 14+ years ago. Apps downloaded from the App Store are clearly the primary use case for iPhones/iPads in 2021. Apple has invested massively in their app store, payment system, SDKs, XCode, etc. But at any rate, I fail to see how this is even relevant to the question of whether or not Netflix derives value from their relationship with Apple.

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#239

Post by fiddlerwoaroof » Tue, Oct 05, 2021, 3:18 AM UTC

brokencode wrote: post #203

JohnBooty wrote: post #187

Earlier quoted context omitted.

Apple by comparison demands 15% which is 3.5x as much of a cut. Apple provides credit card processing, and approval into the App Store (plus according to a comment in this email, it sounds like they keep Netflix in the App Store promotion rotation as "free" ad-space). This isn't anywhere near the value that AWS provides That's debatable. To put it mildly. Apple provides them access to, literally, nearly a billion pot…

That’s an extremely charitable assessment. Everybody knows what Netflix is already. There is little need for Netflix to market its service. They benefit from marketing specific shows, but I really doubt they benefit from marketing the app itself. And even if they did, 15% of their revenue for marketing? Forever? That is some amazingly expensive marketing. Apple is extracting rent, plain and simple. If they truly care…

And iOS is Apple’s walled garden: if Netflix doesn’t like the membership fee, they can always give up the iOS user base.

Re: Apple execs describe a “unique arrangement” with Netflix (2018)

#240

Post by fiddlerwoaroof » Tue, Oct 05, 2021, 3:22 AM UTC

JohnBooty wrote: post #238

danShumway wrote: post #212

Earlier quoted context omitted.

> Apple provides them access to This is in many ways the same argument that ISPs used during the net neutrality debates as to why Netflix should have to pay them extra money. Netflix was using all the bandwidth, and ISPs were keeping that access fast... blah, blah, blah. Many of the objections that I had to ISPs trying to double-dip on bandwidth fees back then also apply to this idea that Apple's product to Netflix i…

This is in many ways the same argument that ISPs used during the net neutrality debates as to why Netflix should have to pay them extra money. The parallels are there for sure. I would agree that gatekeeping is bad, and I often don't like how Apple behaves as gatekeeper. But there are massive key differences as well. Many ISPs have a local monopoly over broadband access. Many people have only a single choice for a br…

> Apps downloaded from the App Store are clearly the primary use case for iPhones/iPads in 2021.

My general sense is that most people prefer not to install apps: I know many people that look askance at websites that attempt to funnel them to an app and generally only isntall 1-5 apps beside the default set from Apple.