No, Netflix is Not Joining New Apple Video Service

Posted on March 19, 2019 by Paul Thurrott in Apple, Cloud, iOS, Music + Videos, Smart Home with 14 Comments

No surprise here, but Netflix confirmed last night that it will not participate in Apple’s coming video service.

“We want to have people watch our content on our service,” Netflix CEO Reed said at a widely-reported press conference. “We’ve chosen not to integrate into their service.”

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 Apple’s 30 percent vig on in-app purchases because it was siphoning an unfair $850 million per year from its revenues. Netflix’s complaint mirrors Spotify’s, 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 Netflix’s content in the living room. So it has to tread carefully here as Apple moves from partner to a direct competitor.

“Apple’s a great company,” Mr. Hasting said, politically. But he noted that Netflix would have “great difficulty” competing against a company as “well-funded” as Apple. “But you do your best job when you have great competitors,” 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 can’t 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 “technology.”

Still, it’s 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.

“[Apple] are going to do some great shows,” Hastings said. “I’m going to be envious. They’re going to come up with some great ideas. We’re going to want to borrow those.”

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Comments (14)

14 responses to “No, Netflix is Not Joining New Apple Video Service”

  1. Avatar

    dontbe evil

    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

    • Avatar

      Jason Peter

      In reply to dontbe_evil: of course, they're fighting with spotify against apple arrogance and abuse of dominant position


      What dominant position? Apple literally has no dominance in any market. Its most dominant product, the iPhone, has roughly 20% of the smartphone market (give or take), while Android basically has the rest. Its marketshare in the PC market is minuscule.


      The only dominance Apple has in any market at all is in the “Apple ecosystem”. But that’s akin to stating that Netflix has dominance of the “Netflix” market. Sounds moronic, right? Thats because it is.

      • Avatar

        dontbe evil

        In reply to Jason_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.

  2. Avatar

    toukale

    Who in their right minds thought Netflix would join the Apple service? It makes no sense at all. This sound more like a media made up story. They can write a story about whether Netflix will join, then write another story when Netflix deny it, then a third story to explain why? This is how the media seems to operate these days. Instead of reporting the news, they try to create it in order to have more things to write about.

    • Avatar

      lvthunder

      In reply to toukale:

      I wish all the apps would integrate into the TV app. They should also integrate into the Search part of the platform. That way when I search for a show I can see it's available in Netflix, Amazon, iTunes, etc. That would make things easier for the consumer.

  3. Avatar

    mestiphal

    Back in the day Microsoft bundled Internet Explorer with the windows installation, and they got in trouble. Even though you were freely able to install Netscape or AOL.


    Apple has a close store, and the only way currently for Netflix to have an app run on an iphone is by paying them their stipulated 30% cut, there is no free market. How is this not worse than what Microsoft was doing 20 years ago?

    • Avatar

      toukale

      In reply to Mestiphal:

      To be fair, Microsoft had a 90+ percent of the pc market, not so with Apple. Android currently have over 80%+ of the market, Apple is seating on 13-15% share. Spotify is not going to go out of business if they do not support the iPhone. You could not say so during the Microsoft hay days with windows/pc's. That's the different between the two. What Apple and the iPhone have a monopoly on are users with the most buying power. Every company are dying to have access to those users,.


      That is not a case for anti trust, at least in the US base on current law. Folks need to stop their emotional outburst and bias when it comes to Apple. Is Apple doing tricks to increase their services revenue, sure, but every platform owner have and do so since commerce have been a thing.

    • Avatar

      lvthunder

      In reply to Mestiphal:

      You are 100% wrong. You only have to pay Apple 30% if people sign up in the app. They used to allow that. They stopped earlier this year or late last year. Now when you install the Netflix app instead of having a login and sign up button you just have a login button. You go to a web browser and sign up and Apple gets nothing.

      • Avatar

        mestiphal

        In reply to lvthunder:

        Ahh okay, makes sense... I do remember someone getting in trouble at one point because they were trying to redirect the user to their website, so they wouldn't sing up for the service within the app, but I guess if they don't even do that, and just have the customer be smart and go sign up for the service on their own, they can go around that rule.

  4. Avatar

    BrianEricFord

    Spotify should look to Netflix for some tips on how to compete.

  5. Avatar

    BrianEricFord

    Worth pointing out that 10 billion is 10 times what Apple pledged, but the recent NYT article (linked here yesterday, I believe) points out that there’s no way Apple hasn’t far exceeded its $1 Billion pledge, at this point.

  6. Avatar

    nbplopes

    Man Paul. You are full of factoids.


    As for Netflix not joining because of some Apple is evil notion.


    They have not joined MS either on XBox either. Heck, Spotify only serviced on Xbox once Microsoft Groove left.


    Why don’t you inform your user also of such matters.


    Face it. The App Store it’s a Store/Shop. Not a directory of apps. Much like Amazon that seam to like so much, it’s a Store/Shop.


    Other allegations of Spotify that Apple strives to keep the company in the dark by refusing apps and blocking .... are o me more dammaging. Yet I remember Amazon doing similar things, including banning products simply due to conflicting interests.


    I know you want to compare this to MS. But you cannot. Simply because back than if you did not use Windows meant that you were out of the game. 90%+ marketshare.


    While today one truly have options.


    • Avatar

      jgraebner

      In reply to nbplopes:

      A Netflix app is available on the XBox. Apple is supposedly trying to create some sort of aggregate service that would offer content from multiple providers on one app. Microsoft hasn't attempted anything similar.


      I expect Apple's offering won't be too different from what Hulu and Amazon have done. Both offer a few services, HBO and Showtime probably being the biggest, that can be purchased as an add-on. You then can watch the programming from those services through the Hulu or Amazon user interface. Apple might have some leverage to get a few more services on board with that approach.

  7. Avatar

    mike2thel73

    I was watching Andrew Schulz on the Joe rogan experience podcast. I know those guys are comedians which obviously doesn't make them experts on anything tech BUT, Andrew said something brilliant and I'm in agreement with him...Netflix is done.


    They want to be bought out.


    They are spending themselves into debt......like the democrats they are.


    Andrew Schulz also said apple, facebook, google, and whatever other big tech company who has the money should think about buying Netflix. I think he's right.


    Apple wouldn't need to start from scratch by buying Netflix.....although there wouldn't be an end to the rising of monthly prices knowing apple would be owning them.

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