from Hacker News

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

by osynavets on 10/4/21, 4:25 PM with 274 comments

• by ksec on 10/4/21, 6:54 PM

  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 compare Physical Software distribution before App Store ) that is being continuously sold with recurring revenue like staples or other commodities.

  Not to mention Netflix knew Apple were doing AppleTV+. Directly competing with them. I love how Apple complains about testing IAP as not OK as in we deserve our 15%.

  So Reed made the decision to stop IAP. And reading all the emails from Apple execs, Eddy Cue often seems to be the culprit.

  Steve From D5

  >You know, because Woz and I started the company based on doing the whole banana, we weren’t so good at partnering with people. And, you know, acatually, the funny thing is, Microsoft’s one of the few companies we were able to partner with that actually worked for both companies. And we weren’t so good at that, where Bill and Microsoft were really good at it because they didn’t make the whole thing in the early days and they learned how to partner with people really well.

  And I think if Apple could have had a little more of that in its DNA, it would have served it extremely well. And I don’t think Apple learned that until, you know, a few decades later.

• by djyaz1200 on 10/4/21, 5:09 PM

  Tech companies that reach monopoly scale (like Apple, Facebook, Amazon) should have to disclose all their agreements and honor a "Most Favored Nation" clause giving all companies the same pricing and access as the best negotiated agreement with any one company. This is the most reasonable way I can think of without breaking them up to prevent them picking winners and losers as new opportunities emerge. If you have a better plan I'd be glad to hear it.

• by emsy on 10/4/21, 6:19 PM

  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.

• by actusual on 10/4/21, 5:35 PM

  For those unfamiliar with IAP as a term of art: IAP = In App Purchases

• by jw1224 on 10/4/21, 7:24 PM

  I wonder why Netflix don’t want their content to be searchable in Apple’s TV app:

  > “Since TV App is not going to happen right now, there’s nothing else to get from Netflix at this time”

  The TV App is actually pretty great — one of the few parts of the Apple ecosystem where the garden walls are very low.

  I can search for a TV show or film, and even when the iTunes Store has it available, TV still suggests I watch it for free (effectively) on Amazon Prime, or any other streaming services I have set up.

  It’s a little surprising Apple seem happy to forego the revenue themselves — but great for users like me.

  For whatever reason, Netflix is the only major streaming provider who don’t integrate with the TV App — which is a shame.

• by throwawy8233qo on 10/4/21, 5:08 PM

  I know HBO Inc had the same 15% deal, at least back in 2018. I was on an email chain where some HBO execs mentioned this, and it was a revelation. As a vendor of iOS apps we hinted to other customers that the 30% cut is negotiable for providers strategic to Apple, without giving away HBO’s deal.

• by haunter on 10/4/21, 4:55 PM

  >Rep. Johnson: Does Apple treat every app and every developer the same?

  >Cook: “We treat every developer the same. We have open rules. It’s a rigorous process. Because we care about privacy and quality, we do look at every app before it goes on. We apply these rules equally to everyone.”

• by ramshanker on 10/4/21, 5:10 PM

  I am of the opinion that the whole "Reader apps" concept itself was brought in to selectively please big and important players. The ones whose absence would diminish the value of iPhone. Indie developer's can't be expected to get same treatment.

• by ChrisMarshallNY on 10/4/21, 7:26 PM

  I just wish the damn AppleTV apps worked better together.

  I use AppleTV for all my viewing (which isn’t really that much), and one thing that really annoys me, is the crap quality of the apps; even marqée-brand apps.

  I’m constantly having to reboot the unit to get out of “lockups.”

  Wouldn’t be surprised if a big reason that Netflix and Apple don’t play well with each other, is that they can’t code it (as opposed to nefarious motives -Hanlon’s Razor).

• by arthurofbabylon on 10/4/21, 5:27 PM

  Of note, it appears that Netflix’s gripe wasn’t so much about the 70/30 split as colloquially observed, but that Apple’s IAP saw more “voluntary churn” than Netflix’s direct purchase.

  Am I reading that right? Would this churn discrepancy apply to other services besides Netflix (like developer tools, access to smaller content libraries, etc)? Finally, what did Apple do to address their “voluntary churn” problem?

• by manquer on 10/5/21, 1:25 AM

  This is not new, 15 % has been possible in the Video Partner Program since 2016.

  The power dynamics is different with content providers for Apple. Apple TV needs content from the Big 4/5 Studios and that is a lot of leverage they have to negotiate better rates,

  Netflix may not have the same leverage as other content providers, it would have been easier for them to negotiate comparable terms.

• by ngcc_hk on 10/5/21, 12:30 AM

  Back to basic : Can you paid offline and not used IAP and still maintain an account so both iOS and android can used your paid system to do say Netflix. If so you cannot argue their pricing … it is apple iap. Or Google iap. You are using their payment system.

  If any paid content or game must use their iap and forced to pay … then there is an argument whether the set price is fair. Like is Mac Pro is fair. If you do like it is there any alternative. Given there is two players …

  For low end developer …

  For high buck developer …

  Price discrimination is really a monopoly way to do things. Or tie-in sale. Not sure forcing apple to do it is right.

• by jjtheblunt on 10/4/21, 5:17 PM

  The article says the Apple/Netflix agreement DID follow older rules, before current App Store rules?

• by jjtheblunt on 10/5/21, 1:02 AM

  Isn't the "unique arrangement" just its age, predating the modern App Store?

• by Osiris on 10/4/21, 4:58 PM

  That seems to undermine their "everyone is treated equally" argument.

• by kristjansson on 10/4/21, 5:40 PM

  Borrow a million dollars from the bank, you have a problem. Borrow a billion dollars from the bank, you and the bank have a problem.

  Why should it be a surprise that a partner in a stronger negotiating position negotiates a better deal than is offered at the door?

• by awinter-py on 10/5/21, 12:57 AM

  79/39 split is indeed unique

• by shmerl on 10/4/21, 10:27 PM

  Both Apple and MS are despicable.

• by oauea on 10/4/21, 5:09 PM

  It's been obvious for years that Apple gives absolutely no fucks about destroying small businesses with their inane review processes (which change on a whim and seem to depend on the mood of the reviewer) and fees. Of course larger corporations are exempt.

• by echelon on 10/4/21, 4:54 PM

  Steve Jobs and Tim Cook are the iPhone Al Capone.

  There's no technical reason software needs to be distributed this way. It's only greed.

  I hope this mounting evidence leads to a single verdict from the DOJ: "no more app stores" for common computing devices.

  (Please don't rehash the video game console argument.)