No surprise here, but Netflix confirmed last night that it will not participate in Appleās coming video service.
āWe want to have people watch our content on our service,ā Netflix CEO Reed said at a widely-reported press conference. āWeāve chosen not to integrate into their service.ā
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Spotify has gotten a lot of press this past week for its antitrust allegations against Apple. But Netflix came first: The streaming-video giant announced in November that it would no longer pay Appleās 30 percent vig on in-app purchases because it was siphoning an unfair $850 million per year from its revenues. Netflixās complaint mirrors Spotifyās, though the latter had the guts to contact antitrust regulators: Apple unfairly punishes services that compete with its own services by taxing all in-app revenues, including ongoing subscription revenues.
Of course, Netflix relies in part on Apple for distributing its apps. Netflix is quite popular on iPhones and iPads, and Apple TV is one of three or four major ways in which its users enjoy Netflixās content in the living room. So it has to tread carefully here as Apple moves from partner to a direct competitor.
āAppleās a great company,ā Mr. Hasting said, politically. But he noted that Netflix would have āgreat difficultyā competing against a company as āwell-fundedā as Apple. āBut you do your best job when you have great competitors,ā he added.
Netflix does have a few advantages over Apple, of course. The firm has been buying and producing high-quality content for years, and it now has a deep and rich library of content that even previous market leaders like HBO canāt match. The firm now spends over $10 billion per year acquiring and creating content, an amount that is ten times that which Apple pledged. It also spends an additional $1.2 billion per year on ātechnology.ā
Still, itās Apple. A firm with the most loyal customer base in tech, and one that has shown itself eager to eat up almost any service, no matter how thin or noncompetitive. That said, recent reports suggest that Apple is moving quickly to create its own content, and given its close ties to Hollywood, there are some big names onboard.
ā[Apple] are going to do some great shows,ā Hastings said. āIām going to be envious. Theyāre going to come up with some great ideas. Weāre going to want to borrow those.ā
dontbe evil
<p>of course, they're fighting with spotify against apple arrogance and abuse of dominant position … waiting for apple news service, so more services will join forces with antitrust against apple</p>
dontbe evil
<blockquote><em><a href="#413800">In reply to Jason_P:</a></em></blockquote><p><br></p><p>maybe "dominant position" is not the proper word, but they can sell same services of their competitors (music, soon video and news) on their platform, earning 100% of money instead of 70%. for example apple can sell at 9 and earn 9, competitors can sell at 10 and earn 7.</p>
BrianEricFord
<p>Spotify should look to Netflix for some tips on how to compete.</p>
BrianEricFord
<p>Worth pointing out that 10 billion is 10 times what Apple <em>pledged</em>, but the recent NYT article (linked here yesterday, I believe) points out that thereās no way Apple hasnāt far exceeded its $1 Billion pledge, at this point.</p>