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

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

#281

Post by dkonofalski »

caf wrote: post #261
martimarkov wrote: post #255

Earlier quoted context omitted.

No because you are breaking the UX with the price reduction incentive. Let’s say we care about the customer’s choice of OS and that they chose to have that single UX. If the app choice is: pay $X using iAP or pay $X using our own payment system: which one would most ppl choose? I’d argue that it will be the iAP. So they prefer the UX Apple provides. Now if we start adding incentives towards the other method you are p…

No because you are breaking the UX with the price reduction incentive. I'm not breaking anything. I'm providing information about an alternate service. If you choose to use the IAP, you get the same UX you always did. So they prefer the UX Apple provides. With a price of zero they do, but how much is that UX worth to them? How much is it worth to you? I say lets expose it at its true cost and if people want to contin…

>I'm providing information about an alternate service.

His point was that developers would want to incentivize the alternate service and would, therefore, do things to discourage the IAP system.

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

#282

Post by richardw »

JohnBooty wrote: post #237
richardw wrote: post #198

Earlier quoted context omitted.

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-te…

That’s very interesting. I wouldn’t have guessed that.

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

#283

Post by danShumway »

dkonofalski wrote: post #279
danShumway wrote: post #245

Earlier quoted context omitted.

> whether or not Netflix derives value from their relationship with Apple, or not I think that's a very different question than whether or not Apple has a strong argument that Netflix ought to pay them for that value. As an example, Apple extracts value from its customers who sign up for Netflix on its platform. But Apple is not paying any of that money back to its customers, and I doubt it would try to argue that it…

>As an example, Apple extracts value from its customers who sign up for Netflix on its platform. This statement is false. If people are signing up for Netflix via Apple's platform then they're already customers of Apple's and, therefore, Netflix is not providing that value. Instead, Apple is only deriving additional value when customers sign-up through Apple's services for Netflix which is where Apple would collect t…

If Apple is trying to make an argument that access to its userbase is a service it provides that on its own is worth X% of in-app revenue, then it follows that Apple's userbase is providing Apple value by being a part of the market/service that they sell.

Unless Apple isn't selling access to a market... then things would be completely different.

But you can't have it both ways. If access to the iPhone market is a service with value that Apple is justified in charging developers to access, then who really makes that market valuable to app developers, and who really makes that market attractive enough that Apple can sell it? It would be the people buying iPhones, the customer base that makes up the market that developers want to reach.

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

#284

Post by ls15 »

JohnBooty wrote: post #259
ls15 wrote: post #210

Earlier quoted context omitted.

> Apple provides them access to, literally, nearly a billion potential customers Are they providing them access or are the not denying them access?

There are a lot of things I hate about Apple's App Store, but it provides some significant services. It is not a simple "pipe" between developers and users. For developers it provides seamless and secure payments, SDKs, APIs, an IDE, and app distribution and updates to roughly a billion customers. For end-users, it provides a mostly seamless experience, and (unlike other app stores) a nearly airtight guarantee that a…

The services are significant, but at the same time, Apple commoditizes the users, which only works, because they are gatekeeping all software installations. If users were free to install alternative app stores after a big fat security warning, I doubt that Apple's 30% share would work as today.

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

#285

Post by dkonofalski »

danShumway wrote: post #283
dkonofalski wrote: post #279

Earlier quoted context omitted.

>As an example, Apple extracts value from its customers who sign up for Netflix on its platform. This statement is false. If people are signing up for Netflix via Apple's platform then they're already customers of Apple's and, therefore, Netflix is not providing that value. Instead, Apple is only deriving additional value when customers sign-up through Apple's services for Netflix which is where Apple would collect t…

If Apple is trying to make an argument that access to its userbase is a service it provides that on its own is worth X% of in-app revenue, then it follows that Apple's userbase is providing Apple value by being a part of the market/service that they sell. Unless Apple isn't selling access to a market... then things would be completely different. But you can't have it both ways. If access to the iPhone market is a ser…

I'm not sure what you're trying to say. Apple is providing value to developers through access to its userbase, curation of a store, hosting, update services, localization, and reviews. Apple's users have already paid for their hardware so they already provide Apple some value. If developers want to have those customers, then they need to provide some additional value to Apple.

In other words, yes... they absolutely can have it both ways. I'm not saying that developers don't also provide Apple with some kind of value but that value, for most developers, is not enough to justify giving the other services Apple is providing as part of its ecosystem to them for free.

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

#286

Post by danShumway »

dkonofalski wrote: post #285
danShumway wrote: post #283

Earlier quoted context omitted.

If Apple is trying to make an argument that access to its userbase is a service it provides that on its own is worth X% of in-app revenue, then it follows that Apple's userbase is providing Apple value by being a part of the market/service that they sell. Unless Apple isn't selling access to a market... then things would be completely different. But you can't have it both ways. If access to the iPhone market is a ser…

I'm not sure what you're trying to say. Apple is providing value to developers through access to its userbase, curation of a store, hosting, update services, localization, and reviews. Apple's users have already paid for their hardware so they already provide Apple some value. If developers want to have those customers, then they need to provide some additional value to Apple. In other words, yes... they absolutely c…

Possibly talking past each other then.

My statement was not that Netflix is providing Apple with value (I apologize if it came off that way), it's that Apple's customers are providing Apple with value by being a product that they sell to Netflix.

When Apple says that it provides a service that is "access to its userbase", that is Apple selling their customers as a product to another company.

When I talk about Apple trying to "have it both ways", what I refer to is Apple's simultaneous position that:

A) it monetizes customers directly rather than treating them as a product, which gives it a moral leg up over companies like Google/Facebook.

B) its customers are an asset that it is justified in selling access to.

Both of those statements can't be true at the same time, either it's monetizing access to its customer-base or it's not.

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

#287

Post by Handytinge »

jacurtis wrote: post #145
ksec wrote: post #83

I am pretty sure I read something similar before. Probably from Benedict Evans or somewhere else. I think the most important issue from these email isn't the lack of Alternative App Store, IAP, or 70/30 split. It is that Apple Execs has Zero understanding of how other business works especially with respect to Internet or Software Services. They continue to think Netflix as a physical product ( As they often like to c…

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…

The value that Apple brings - which bafflingly you seem to have missed - is over a billion users. That's a significant value. I doubt more than 50 companies in the words history have been able to provide that level of user base on their platform.

I'm not saying 15% isn't a high fee, but your argument that Apple provide little to no value is simply false.

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

#288

Post by Handytinge »

emsy wrote: post #60

The problem here are not the special deals, saurik commented he cut special deals in the Cydia store occasionally the last time this topic came up. The problem is that there is no alternative to Apple when it comes to publishing software and content on the iPhone and that makes these kind of deals unfair.

Users know they're buying into a closed garden when they buy the product. It's a feature, not a bug. If people wanted alternative app stores, they'd buy Android or Linux devices.

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

#289

Post by dkonofalski »

danShumway wrote: post #286
dkonofalski wrote: post #285

Earlier quoted context omitted.

I'm not sure what you're trying to say. Apple is providing value to developers through access to its userbase, curation of a store, hosting, update services, localization, and reviews. Apple's users have already paid for their hardware so they already provide Apple some value. If developers want to have those customers, then they need to provide some additional value to Apple. In other words, yes... they absolutely c…

Possibly talking past each other then. My statement was not that Netflix is providing Apple with value (I apologize if it came off that way), it's that Apple's customers are providing Apple with value by being a product that they sell to Netflix. When Apple says that it provides a service that is "access to its userbase", that is Apple selling their customers as a product to another company. When I talk about Apple t…

>Both of those statements can't be true at the same time

Why? Both of those statements can be true but I don't think the only options are the 2 that you're describing.

To me, it's more like the value proposition that Costco offers than it is selling customers as assets. Costco members pay a fee every year to stay on as members. Businesses want to put their products in Costco stores because Costco members spend money more liberally than in normal stores. Whereas Walmart shoppers are always looking for the lowest cost, Costco shoppers tend to shop for higher quality items and are willing to pay for them. Costco is not necessarily selling its customers to these businesses but access to them is limited because Costco sets certain standards for the limited space they have in their warehouses. So, in that sense, when companies are vying for the "access to [their] userbase", doesn't Costco also "have it both ways"?

Both of your statements are true in the case of Costco so why is it somehow impossible for them to be true in Apple's case as well? If the customer's appreciate Apple and Costco serving as gatekeepers (because they trust them to perform that task) then neither Costco or Apple are violating the trust of their users while still keeping that moral leg up.

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