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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 p

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.

Mindwipe 5y ago
> Many ISPs have a local monopoly over broadband access. Not outside of the US, and net neutrality was still considered important. If my ISP blocked Netflix tomorrow I've got 5G coming into my house and the choice of twenty competing ISPs. I still think the entire company should get dismantled if they were stupid enough to do that from a regulatory POV.
fiddlerwoaroof 5y ago
> 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.
- saagarjha 5y ago
  I am one of those people. But even then, I am pretty sure we're a small minority: most people have many, many apps that they hardly ever use. If a website tells them to install an app, they'll do it, because the website told them to.
- JohnBooty 5y ago
  I know many people that look askance at websites that attempt to funnel them to an app Yeah, these are universally disliked, I think. But my sense is that for most people, they don't think of e.g. Facebook as a website. They think of it as an app. Ask a kid what Tiktok or Instagram are. I promise they'll say, "apps."
danShumway 5y ago
> 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 has an obligation to do so. The way I see it is: - Apple customers pay Apple for strong hardware and a vibrant platform that supports their favorite content/apps. - Developers pay Apple for support/moderation on the app store. I don't see the loose ends here where Netflix owes Apple anything beyond maintenance costs. Of course both Apple and Netflix benefit from each other. But the argument that Apple is providing Netflix a service by giving them access to those customers twists the relationship that Apple should have with its customers, sets up a bad incentive structure for the company, and feels very analogous to the kind of double-dipping behavior that we called out with ISPs. The fact that Netflix gets value from Apple's relationship with its own user base does not create some kind of extra obligation for Netflix. Sometimes people/companies do things that happen to benefit other companies as a side effect of selling a product. It doesn't immediately mean everyone else who benefits is obligated to pay them money. > The same could be said of AWS. Amazon didn't create it solely for Netflix's sake. I don't think that's analogous at all. Netflix is directly in the category of customer that AWS is designed to serve. AWS is a hosting service that is sold to Netflix and to companies like Netflix, companies that needs hosting. On the other hand, iOS does not exist for app developers, it exists for consumers. It's a weird perversion of that relationship to treat Netflix like they're a customer. Consumers are the customers. Plenty of companies invert that relationship (Facebook, Google, etc); those are products where advertisers are the customer and consumers are a product that is given a benefit in the form of a free service. Apple (often to its credit) went a different direction. But it doesn't now get to pretend that it's in both positions at the same time :) An analogous situation between AWS and iOS would be if Amazon started charging me as a consumer for access to Netflix's servers in addition to charging Netflix for hosting costs, and if AWS then argued that this was a fair price because I was benefiting from Netflix's increased performance on their servers. > Many ISPs have a local monopoly over broadband access. ISP monopolies made the problem worse, but their arguments about Netflix paying their "fair share" would have been disingenuous even if they were not monopolies. Customers paid ISPs for access to websites, there was nothing "fair" about ISPs trying to double-dip and charge companies and consumers twice for the same service. Similarly, Apple customers (the people who buy its hardware and subscribe to its cloud services) pay Apple for access to the market it created. It's not unfair for Netflix to profit off of that market without compensating Apple, because Apple is already being compensated by its real customers. For an Apple exec to argue that its customer base is a service they provide to other companies is a perversion of that relationship. And pretty selective, because again, it's not like Apple is reducing prices or paying out parts of its Netflix profits to consumers for the value they provide Apple by forming that market. At least Facebook is free. Outside of basic maintenance costs for the stuff jacurtis mentioned, stuff that's necessary to keep the app store free to access: "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)", what is Apple providing for Netflix that hasn't already been paid for by consumers? That's the analogy I see with the ISPs: not the monopoly stuff necessarily, more the illogical feeling that multiple different parties are somehow simultaneously responsible for paying Apple multiple times for the same service or else they're freeloading. Of course, ultimately Apple will try to extract as much value as possible out of their position, they're a company, that's what they do. They will charge Netflix because they can. But as consumers and onlookers, we don't have to pretend that they have a moral argument or buy into their public justifications about why they have the setup that they have. Netflix is not freeloading on Apple and Apple is not providing a fantastic well-priced service for developers; Apple is exploiting a position of power that allows them to charge both customers and developers twice for the same product (market access).

Mindwipe 5y ago

> Many ISPs have a local monopoly over broadband access. Not outside of the US, and net neutrality was still considered important. If my ISP blocked Netflix tomorrow I've got 5G coming into my house and the choice of twenty competing ISPs. I still think the entire company should get dismantled if they were stupid enough to do that from a regulatory POV.

fiddlerwoaroof 5y ago

> 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.

saagarjha 5y ago
I am one of those people. But even then, I am pretty sure we're a small minority: most people have many, many apps that they hardly ever use. If a website tells them to install an app, they'll do it, because the website told them to.
JohnBooty 5y ago
I know many people that look askance at websites that attempt to funnel them to an app Yeah, these are universally disliked, I think. But my sense is that for most people, they don't think of e.g. Facebook as a website. They think of it as an app. Ask a kid what Tiktok or Instagram are. I promise they'll say, "apps."

danShumway 5y ago

> 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 has an obligation to do so. The way I see it is: - Apple customers pay Apple for strong hardware and a vibrant platform that supports their favorite content/apps. - Developers pay Apple for support/moderation on the app store. I don't see the loose ends here where Netflix owes Apple anything beyond maintenance costs. Of course both Apple and Netflix benefit from each other. But the argument that Apple is providing Netflix a service by giving them access to those customers twists the relationship that Apple should have with its customers, sets up a bad incentive structure for the company, and feels very analogous to the kind of double-dipping behavior that we called out with ISPs. The fact that Netflix gets value from Apple's relationship with its own user base does not create some kind of extra obligation for Netflix. Sometimes people/companies do things that happen to benefit other companies as a side effect of selling a product. It doesn't immediately mean everyone else who benefits is obligated to pay them money. > The same could be said of AWS. Amazon didn't create it solely for Netflix's sake. I don't think that's analogous at all. Netflix is directly in the category of customer that AWS is designed to serve. AWS is a hosting service that is sold to Netflix and to companies like Netflix, companies that needs hosting. On the other hand, iOS does not exist for app developers, it exists for consumers. It's a weird perversion of that relationship to treat Netflix like they're a customer. Consumers are the customers. Plenty of companies invert that relationship (Facebook, Google, etc); those are products where advertisers are the customer and consumers are a product that is given a benefit in the form of a free service. Apple (often to its credit) went a different direction. But it doesn't now get to pretend that it's in both positions at the same time :) An analogous situation between AWS and iOS would be if Amazon started charging me as a consumer for access to Netflix's servers in addition to charging Netflix for hosting costs, and if AWS then argued that this was a fair price because I was benefiting from Netflix's increased performance on their servers. > Many ISPs have a local monopoly over broadband access. ISP monopolies made the problem worse, but their arguments about Netflix paying their "fair share" would have been disingenuous even if they were not monopolies. Customers paid ISPs for access to websites, there was nothing "fair" about ISPs trying to double-dip and charge companies and consumers twice for the same service. Similarly, Apple customers (the people who buy its hardware and subscribe to its cloud services) pay Apple for access to the market it created. It's not unfair for Netflix to profit off of that market without compensating Apple, because Apple is already being compensated by its real customers. For an Apple exec to argue that its customer base is a service they provide to other companies is a perversion of that relationship. And pretty selective, because again, it's not like Apple is reducing prices or paying out parts of its Netflix profits to consumers for the value they provide Apple by forming that market. At least Facebook is free. Outside of basic maintenance costs for the stuff jacurtis mentioned, stuff that's necessary to keep the app store free to access: "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)", what is Apple providing for Netflix that hasn't already been paid for by consumers? That's the analogy I see with the ISPs: not the monopoly stuff necessarily, more the illogical feeling that multiple different parties are somehow simultaneously responsible for paying Apple multiple times for the same service or else they're freeloading. Of course, ultimately Apple will try to extract as much value as possible out of their position, they're a company, that's what they do. They will charge Netflix because they can. But as consumers and onlookers, we don't have to pretend that they have a moral argument or buy into their public justifications about why they have the setup that they have. Netflix is not freeloading on Apple and Apple is not providing a fantastic well-priced service for developers; Apple is exploiting a position of power that allows them to charge both customers and developers twice for the same product (market access).