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I've always found it totally bizarre. I just picture Bezos in his office, cackling to himself over Netflix' shortsightedness.

by everly 11y ago

acdha 11y ago
Do you have the same reaction to Apple buying processors from Samsung or Intel? Google buying operating systems from Microsoft or Apple? In each of those situations they've decided that level of risk is outweighed by the cost of trying to do everything in-house. Data centers are an expensive business to be in and Amazon can amortize their costs over a much larger base than Netflix. The thing to remember is that businesses routinely do this kind of thing and rely on contracts and markets to manage their risks. Even assuming that they don't have guarantees in the agreement giving Netflix those famously low rates, if Amazon chose sabotage they'd be endangering their much larger cloud business and that would hurt them for much longer than the time it would take Netflix to migrate to Google, Azure, etc. Even if you're completely unethical and a ruthless competitor, it's hard to argue that Amazon wouldn't benefit far more from making Prime Video a more interesting product, which conveniently also has no potential downsides.
- everly 11y ago
  Well, I suppose I don't have the same reaction to those other examples mainly because Amazon/Bezos have shown such a clear desire to capture/dominate market verticals and thus I'd never want to put myself at his mercy in a business situation. I also don't think those examples are perfect analogies for the Netflix-AWS dependency, though I certainly understand your point that businesses routinely rely upon the services of other businesses to get things done and that sabotage would be a bad look for Amazon. I'm not arguing that Amazon wouldn't benefit from making Prime Video a more interesting product. But finding ways to hamper your biggest competitor, who is fully dependent on your infrastructure, is definitely a way to make Prime Video more interesting. Perhaps I'm being paranoid. I guess I just find Bezos difficult to trust.
  - acdha 11y ago
    A decade or so ago, most people would have said similar things about Microsoft, but I get your point in general and certainly would only trust Bezos to be a tenacious competitor. I think the big counterbalance now is competition – raising prices on AWS would be a boon for e.g. Azure – but I definitely wouldn't want to bet against abuse if one of Microsoft, Google, Rackspace, etc. dropped out. I'm sure Netflix has pretty good forecasts for how much it'd cost to move operations elsewhere as long as a good option exists.

I've always found it totally bizarre. I just picture Bezos in his office, cackling to himself over Netflix' shortsightedness.

by everly 11y ago

I've always found it totally bizarre. I just picture Bezos in his office, cackling to himself over Netflix' shortsightedness.

acdha 11y ago

Do you have the same reaction to Apple buying processors from Samsung or Intel? Google buying operating systems from Microsoft or Apple? In each of those situations they've decided that level of risk is outweighed by the cost of trying to do everything in-house. Data centers are an expensive business to be in and Amazon can amortize their costs over a much larger base than Netflix. The thing to remember is that businesses routinely do this kind of thing and rely on contracts and markets to manage their risks. Even assuming that they don't have guarantees in the agreement giving Netflix those famously low rates, if Amazon chose sabotage they'd be endangering their much larger cloud business and that would hurt them for much longer than the time it would take Netflix to migrate to Google, Azure, etc. Even if you're completely unethical and a ruthless competitor, it's hard to argue that Amazon wouldn't benefit far more from making Prime Video a more interesting product, which conveniently also has no potential downsides.

everly 11y ago
Well, I suppose I don't have the same reaction to those other examples mainly because Amazon/Bezos have shown such a clear desire to capture/dominate market verticals and thus I'd never want to put myself at his mercy in a business situation. I also don't think those examples are perfect analogies for the Netflix-AWS dependency, though I certainly understand your point that businesses routinely rely upon the services of other businesses to get things done and that sabotage would be a bad look for Amazon. I'm not arguing that Amazon wouldn't benefit from making Prime Video a more interesting product. But finding ways to hamper your biggest competitor, who is fully dependent on your infrastructure, is definitely a way to make Prime Video more interesting. Perhaps I'm being paranoid. I guess I just find Bezos difficult to trust.
- acdha 11y ago
  A decade or so ago, most people would have said similar things about Microsoft, but I get your point in general and certainly would only trust Bezos to be a tenacious competitor. I think the big counterbalance now is competition – raising prices on AWS would be a boon for e.g. Azure – but I definitely wouldn't want to bet against abuse if one of Microsoft, Google, Rackspace, etc. dropped out. I'm sure Netflix has pretty good forecasts for how much it'd cost to move operations elsewhere as long as a good option exists.