Apple execs describe a “unique arrangement” with Netflix (2018)(twitter.com)
twitter.com
Apple execs describe a “unique arrangement” with Netflix (2018)
https://twitter.com/TechEmails/status/1444367219509637123
288 comments
For comparison Netflix spends about $1.2 Billion dollars per year on AWS (Amazon Web Services). Their total revenue last year was 27.5B. So that means that AWS fees account for 4.3% of Netflix's revenue.
AWS is streaming video, operating hundreds of edge location CDN locations, and everything else running on expensive server infrastructure. AWS has real serious costs with offering that service, to the point that Netflix has yet to determine that it is better to build it themselves.
Apple by comparison demands 15% which is 3.5x as much of a cut. Apple provides 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). This isn't anywhere near the value that AWS provides, despite demanding a much higher premium. Of course this is the "generous" 15% IAP cut, instead of the normal 30% which is even more atrocious.
Apple seems to maintain the expectation that they deserve 30% of revenue from massive corporations like Netflix, Amazon, etc.. Even the "generous" 15% fee is quite atrocious, especially considering the fact that Apple provides next to no value for Netflix, if anything they are a pain in their side or a necessary evil for Netflix.
Apple is wildly delusional on the value that they provide. It is absolutely no surprise to me that Netflix would consider not allowing IAP subscriptions at all. They already have the marketing power to force people to subscribe at their website. I am surprised Netflix is honestly being as understanding on this issue as they seem to be.
AWS is streaming video, operating hundreds of edge location CDN locations, and everything else running on expensive server infrastructure. AWS has real serious costs with offering that service, to the point that Netflix has yet to determine that it is better to build it themselves.
Apple by comparison demands 15% which is 3.5x as much of a cut. Apple provides 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). This isn't anywhere near the value that AWS provides, despite demanding a much higher premium. Of course this is the "generous" 15% IAP cut, instead of the normal 30% which is even more atrocious.
Apple seems to maintain the expectation that they deserve 30% of revenue from massive corporations like Netflix, Amazon, etc.. Even the "generous" 15% fee is quite atrocious, especially considering the fact that Apple provides next to no value for Netflix, if anything they are a pain in their side or a necessary evil for Netflix.
Apple is wildly delusional on the value that they provide. It is absolutely no surprise to me that Netflix would consider not allowing IAP subscriptions at all. They already have the marketing power to force people to subscribe at their website. I am surprised Netflix is honestly being as understanding on this issue as they seem to be.
Apple by comparison demands 15% which is
3.5x as much of a cut. Apple provides
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). This isn't anywhere
near the value that AWS provides
Apple provides them access to, literally, nearly a billion potential customers who, on average, spend twice as much on app store purchases relative to Android users. [1]
Apple spends billions of dollars to do this, by creating (by many measures) best-in-class hardware devices, including designing their own bespoke in-house CPUs that trounce the majority of their consumer level competition.
It's not directly comparable to what AWS does, so I'm not sure we could possibly quantify how valuable it is to Netflix vis-a-vis AWS. However: it sure isn't nothing, and may well be 3.5x the value that AWS provides.
[1] https://timesofindia.indiatimes.com/gadgets-news/iphone-user...
That’s an extremely charitable assessment. Everybody knows what Netflix is already. There is little need for Netflix to market its service. They benefit from marketing specific shows, but I really doubt they benefit from marketing the app itself.
And even if they did, 15% of their revenue for marketing? Forever? That is some amazingly expensive marketing.
Apple is extracting rent, plain and simple. If they truly cared to partner with Netflix and make them successful, they wouldn’t have launched their own competing product that they get to host on their App Store rent-free.
And even if they did, 15% of their revenue for marketing? Forever? That is some amazingly expensive marketing.
Apple is extracting rent, plain and simple. If they truly cared to partner with Netflix and make them successful, they wouldn’t have launched their own competing product that they get to host on their App Store rent-free.
And iOS is Apple’s walled garden: if Netflix doesn’t like the membership fee, they can always give up the iOS user base.
Sure, it’s Apple’s right to charge whatever extortionate fees they want on their platform. They just shouldn’t act surprised when governments around the world start hitting them with antitrust lawsuits and new regulations.
Or how about this: maybe they could do the right thing even if they make less profit? Because they make limitless amounts of money as it is? Nah, that doesn’t sound right.. it’s better to keep on inviting the wrath of higher powers so that they can juice the earnings per share.
Or how about this: maybe they could do the right thing even if they make less profit? Because they make limitless amounts of money as it is? Nah, that doesn’t sound right.. it’s better to keep on inviting the wrath of higher powers so that they can juice the earnings per share.
Apple doesn’t provide access to these customers. Maybe a small portion are limited to iOS access for Netflix.
In reality there are many general service platforms that provide access to Netflix in combination with ISPs.
If chrome had a 15% fee to allow users to access websites then I think it would be pretty damaging to innovation on the web.
In reality there are many general service platforms that provide access to Netflix in combination with ISPs.
If chrome had a 15% fee to allow users to access websites then I think it would be pretty damaging to innovation on the web.
> If chrome had a 15% fee to allow users to access websites then I think it would be pretty damaging to innovation on the web.
It would also be very damaging to Chrome, because users would promptly download another browser. People generally carry one phone and switching to another is much more costly than switching browsers.
It would also be very damaging to Chrome, because users would promptly download another browser. People generally carry one phone and switching to another is much more costly than switching browsers.
> Apple provides them access to
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. Netflix was using all the bandwidth, and ISPs were keeping that access fast... blah, blah, blah. Many of the objections that I had to ISPs trying to double-dip on bandwidth fees back then also apply to this idea that Apple's product to Netflix is its customers.
The thing is that Apple provides a platform for their customers to access Netflix. 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. Those customers pay Apple for a phone that they can use to watch their favorite TV shows, they pay Apple for a device that can keep pace in capabilities with other tablets and phone OSes on the market.
So the argument that Apple deserves compensation for maintaining a market that is itself regularly compensating them is the same kind of double dipping that ISPs tried to engage in. I pay my ISP for an Internet connection so that I can access websites. People pay Apple for good hardware with a good app store. That's the arrangement; the deal isn't really happening on Netflix's side of the table.
It's very difficult to argue that Apple has invested in best-of-class hardware for Netflix's sake. They did it so that people would pay them money to buy phones. Apple is not selling their phones at a loss, and they were clear during the recent trial with Epic that they do not look at the app store as a revenue target. Taking fees for maintenance is one thing, but it's very difficult to seriously argue that Apple had an idea for a 3rd-party platform and then made an attractive phone in order to support that platform. We all know that it's the other way around.
This talk about Apple being the gatekeeper that graciously allows companies access to a market is also a somewhat dangerous road to go down, because it creates a lot of perverse incentives for the company. I have no doubt that some parts of Apple's leadership do think of their customer base as an asset that they offer other companies. And I think that attitude can help explain some of Apple's lock-in behavior and refusal to work with other platforms, because when users are an asset to be horded and leveraged, it becomes more important to force them to be loyal and to make it harder for them to switch platforms based on your future business decisions.
I feel like one of the biggest lessons of the modern Internet is that it's dangerous for consumers when companies start referring to their customer base as a product. Apple is occasionally a breath of fresh air in that regard. But in this case, not so much.
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. Netflix was using all the bandwidth, and ISPs were keeping that access fast... blah, blah, blah. Many of the objections that I had to ISPs trying to double-dip on bandwidth fees back then also apply to this idea that Apple's product to Netflix is its customers.
The thing is that Apple provides a platform for their customers to access Netflix. 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. Those customers pay Apple for a phone that they can use to watch their favorite TV shows, they pay Apple for a device that can keep pace in capabilities with other tablets and phone OSes on the market.
So the argument that Apple deserves compensation for maintaining a market that is itself regularly compensating them is the same kind of double dipping that ISPs tried to engage in. I pay my ISP for an Internet connection so that I can access websites. People pay Apple for good hardware with a good app store. That's the arrangement; the deal isn't really happening on Netflix's side of the table.
It's very difficult to argue that Apple has invested in best-of-class hardware for Netflix's sake. They did it so that people would pay them money to buy phones. Apple is not selling their phones at a loss, and they were clear during the recent trial with Epic that they do not look at the app store as a revenue target. Taking fees for maintenance is one thing, but it's very difficult to seriously argue that Apple had an idea for a 3rd-party platform and then made an attractive phone in order to support that platform. We all know that it's the other way around.
This talk about Apple being the gatekeeper that graciously allows companies access to a market is also a somewhat dangerous road to go down, because it creates a lot of perverse incentives for the company. I have no doubt that some parts of Apple's leadership do think of their customer base as an asset that they offer other companies. And I think that attitude can help explain some of Apple's lock-in behavior and refusal to work with other platforms, because when users are an asset to be horded and leveraged, it becomes more important to force them to be loyal and to make it harder for them to switch platforms based on your future business decisions.
I feel like one of the biggest lessons of the modern Internet is that it's dangerous for consumers when companies start referring to their customer base as a product. Apple is occasionally a breath of fresh air in that regard. But in this case, not so much.
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.
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
It's very difficult to argue that Apple has invested in
best-of-class hardware for Netflix's sake.
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.
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.
> 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.
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.
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.
I know many people that look askance at
websites that attempt to funnel them to an app
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."
> 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.
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.
> 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).
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).
>As an example, Apple extracts value from its customers who sign up for Netflix on its platform.
This statement is false. If people are signing up for Netflix via Apple's platform then they're already customers of Apple's and, therefore, Netflix is not providing that value. Instead, Apple is only deriving additional value when customers sign-up through Apple's services for Netflix which is where Apple would collect that 15/30. Currently, you can't do that because Netflix doesn't want to play with those percentages so Apple derives no value from Netflix customers on their platform.
This statement is false. If people are signing up for Netflix via Apple's platform then they're already customers of Apple's and, therefore, Netflix is not providing that value. Instead, Apple is only deriving additional value when customers sign-up through Apple's services for Netflix which is where Apple would collect that 15/30. Currently, you can't do that because Netflix doesn't want to play with those percentages so Apple derives no value from Netflix customers on their platform.
If Apple is trying to make an argument that access to its userbase is a service it provides that on its own is worth X% of in-app revenue, then it follows that Apple's userbase is providing Apple value by being a part of the market/service that they sell.
Unless Apple isn't selling access to a market... then things would be completely different.
But you can't have it both ways. If access to the iPhone market is a service with value that Apple is justified in charging developers to access, then who really makes that market valuable to app developers, and who really makes that market attractive enough that Apple can sell it? It would be the people buying iPhones, the customer base that makes up the market that developers want to reach.
Unless Apple isn't selling access to a market... then things would be completely different.
But you can't have it both ways. If access to the iPhone market is a service with value that Apple is justified in charging developers to access, then who really makes that market valuable to app developers, and who really makes that market attractive enough that Apple can sell it? It would be the people buying iPhones, the customer base that makes up the market that developers want to reach.
I'm not sure what you're trying to say. Apple is providing value to developers through access to its userbase, curation of a store, hosting, update services, localization, and reviews. Apple's users have already paid for their hardware so they already provide Apple some value. If developers want to have those customers, then they need to provide some additional value to Apple.
In other words, yes... they absolutely can have it both ways. I'm not saying that developers don't also provide Apple with some kind of value but that value, for most developers, is not enough to justify giving the other services Apple is providing as part of its ecosystem to them for free.
In other words, yes... they absolutely can have it both ways. I'm not saying that developers don't also provide Apple with some kind of value but that value, for most developers, is not enough to justify giving the other services Apple is providing as part of its ecosystem to them for free.
Possibly talking past each other then.
My statement was not that Netflix is providing Apple with value (I apologize if it came off that way), it's that Apple's customers are providing Apple with value by being a product that they sell to Netflix.
When Apple says that it provides a service that is "access to its userbase", that is Apple selling their customers as a product to another company.
When I talk about Apple trying to "have it both ways", what I refer to is Apple's simultaneous position that:
A) it monetizes customers directly rather than treating them as a product, which gives it a moral leg up over companies like Google/Facebook.
B) its customers are an asset that it is justified in selling access to.
Both of those statements can't be true at the same time, either it's monetizing access to its customer-base or it's not.
My statement was not that Netflix is providing Apple with value (I apologize if it came off that way), it's that Apple's customers are providing Apple with value by being a product that they sell to Netflix.
When Apple says that it provides a service that is "access to its userbase", that is Apple selling their customers as a product to another company.
When I talk about Apple trying to "have it both ways", what I refer to is Apple's simultaneous position that:
A) it monetizes customers directly rather than treating them as a product, which gives it a moral leg up over companies like Google/Facebook.
B) its customers are an asset that it is justified in selling access to.
Both of those statements can't be true at the same time, either it's monetizing access to its customer-base or it's not.
>Both of those statements can't be true at the same time
Why? Both of those statements can be true but I don't think the only options are the 2 that you're describing.
To me, it's more like the value proposition that Costco offers than it is selling customers as assets. Costco members pay a fee every year to stay on as members. Businesses want to put their products in Costco stores because Costco members spend money more liberally than in normal stores. Whereas Walmart shoppers are always looking for the lowest cost, Costco shoppers tend to shop for higher quality items and are willing to pay for them. Costco is not necessarily selling its customers to these businesses but access to them is limited because Costco sets certain standards for the limited space they have in their warehouses. So, in that sense, when companies are vying for the "access to [their] userbase", doesn't Costco also "have it both ways"?
Both of your statements are true in the case of Costco so why is it somehow impossible for them to be true in Apple's case as well? If the customer's appreciate Apple and Costco serving as gatekeepers (because they trust them to perform that task) then neither Costco or Apple are violating the trust of their users while still keeping that moral leg up.
Why? Both of those statements can be true but I don't think the only options are the 2 that you're describing.
To me, it's more like the value proposition that Costco offers than it is selling customers as assets. Costco members pay a fee every year to stay on as members. Businesses want to put their products in Costco stores because Costco members spend money more liberally than in normal stores. Whereas Walmart shoppers are always looking for the lowest cost, Costco shoppers tend to shop for higher quality items and are willing to pay for them. Costco is not necessarily selling its customers to these businesses but access to them is limited because Costco sets certain standards for the limited space they have in their warehouses. So, in that sense, when companies are vying for the "access to [their] userbase", doesn't Costco also "have it both ways"?
Both of your statements are true in the case of Costco so why is it somehow impossible for them to be true in Apple's case as well? If the customer's appreciate Apple and Costco serving as gatekeepers (because they trust them to perform that task) then neither Costco or Apple are violating the trust of their users while still keeping that moral leg up.
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.
Apple extracts value from its customers who sign up
for Netflix on its platform.
The difference here is that Apple treats end users as customers and charges them money directly.
Google and the others extract plenty of value from you. But they do it by advertising to you and selling your information.
You can like one model better than the other, but either they're gonna extract value from you. It's just a matter of how you want it done.
At least Facebook is free.
Okay.
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, a company
that needs hosting.
Do you also hate Netflix because they're a middleman between you and the actual performers in the shows you watch? They don't pass your entire subscription fee onto the directors, writers, and actors. And even when they get paid, their agents keep some of it.
I'm not necessarily loving Apple taking a cut. I don't know if it's worth 15%. But I was initially responding to the question posed by the the great great great grandparent post (or whatever) claimed that Apple's app store provided zero value or something close to it, which I think is absurd. You may not like what they're selling and that's fine, but that's different from them offering zero value.
> The difference here is that Apple treats end users as customers and charges them money directly.
It sounds to me like you're arguing it's valid for Apple to both treat its end users as customers and sell them to companies like Netflix as a product.
Look, I admire that Apple tries to have a direct relationship with customers. What went on with Netflix was contrary to that goal. It is movement in the direction of Facebook/Google/etc. And Apple should be better than that.
> At least Facebook is free. (actual laugh out loud)
I also really genuinely don't understand the derision about this. If I'm going to be a product (and it sounds to me that you're arguing Apple has a right to treat me like a product) then of course I would like to get some benefit out of that. Or, don't treat me like a product.
I don't understand what's ridiculous about wanting a company to pick a lane on what relationship they'll have with their customers and commit to whether they're going to sell to them or not. I don't get why it would be beneficial to me as a consumer for a company like Apple to try and simultaneously extract value from me directly and extract value from me indirectly as an asset they can sell to other companies.
Like, go ahead, make fun of Facebook for giving me a product for "free", but you're arguing that it's valid for Apple to be Facebook in the sense that it's selling access to me, and then to also directly charge me substantial amounts of real money for the privilege of being its product that it sells to developers. Facebook is evil, but it doesn't have the guts to try and make me pay for the privilege of being sold to another company.
> claimed that Apple's app store provided zero value or something close to it, which I think is absurd.
I think offering value and offering a service are two different things and we should treat them as two different things. It's too easy otherwise for rent extractors to suck up value out of systems. Apple's argument is that it deserves a certain payment structure because it controls access to a market. Or course it's worthwhile to try and figure out whether Apple is providing a real service by acting as a middleperson in both directions simultaneously, or whether it's just collecting extra rent.
> Do you also hate Netflix because they're a middleman between you and the actual performers in the shows you watch? They don't pass your entire subscription fee onto the directors, writers, and actors.
They most definitely do pass on a portion of that subscription fee to directors, writers, and actors. Netflix pays companies to be on their service, not the other way around. And of course it is reasonable to ask whether or not the percentage Netflix takes is fair or whether they're just extracting rent from a captive market. But this is kind of a silly comparison, Netflix's relationship to studios is almost a complete inverse of Apple's relationship with developers. Netflix courts content producers and pays for content to be either licensed to them or created for them in-house.
Typically, when we get into a scenario where both consumers and producers are paying a middleperson to connect them, we should ask questions. We should ask if there are terms being imposed by that middleperson to make it difficult to reach out to customers in any other way (for example, a ban on mentioning other payment methods). We should ask if there are lock-in mechanisms that are designed to artificially increase the cost for consumers to leave the platform. We should ask how many distribution methods exist (are there only 2 streaming services in the world?) and whether or not the current market is competitive.
And we should definitely ask what the value add of that middleperson is and what they think their value add is and what they think is their primary service that they sell. A responsible, positive middleperson doesn't sell a market, it sells services that make it easier to interact with that market, or it licenses and resells content from another market. I think it's a really reasonable question to ask what about the market access that Apple is arguing that developers "owe" them for hasn't already been payed for. We want middlepeople to provide a service that justifies using them over direct access, we don't want them to just be rent-seekers and we don't want their position of power to largely exist only because of restrictions and platform limitations that they created.
It sounds to me like you're arguing it's valid for Apple to both treat its end users as customers and sell them to companies like Netflix as a product.
Look, I admire that Apple tries to have a direct relationship with customers. What went on with Netflix was contrary to that goal. It is movement in the direction of Facebook/Google/etc. And Apple should be better than that.
> At least Facebook is free. (actual laugh out loud)
I also really genuinely don't understand the derision about this. If I'm going to be a product (and it sounds to me that you're arguing Apple has a right to treat me like a product) then of course I would like to get some benefit out of that. Or, don't treat me like a product.
I don't understand what's ridiculous about wanting a company to pick a lane on what relationship they'll have with their customers and commit to whether they're going to sell to them or not. I don't get why it would be beneficial to me as a consumer for a company like Apple to try and simultaneously extract value from me directly and extract value from me indirectly as an asset they can sell to other companies.
Like, go ahead, make fun of Facebook for giving me a product for "free", but you're arguing that it's valid for Apple to be Facebook in the sense that it's selling access to me, and then to also directly charge me substantial amounts of real money for the privilege of being its product that it sells to developers. Facebook is evil, but it doesn't have the guts to try and make me pay for the privilege of being sold to another company.
> claimed that Apple's app store provided zero value or something close to it, which I think is absurd.
I think offering value and offering a service are two different things and we should treat them as two different things. It's too easy otherwise for rent extractors to suck up value out of systems. Apple's argument is that it deserves a certain payment structure because it controls access to a market. Or course it's worthwhile to try and figure out whether Apple is providing a real service by acting as a middleperson in both directions simultaneously, or whether it's just collecting extra rent.
> Do you also hate Netflix because they're a middleman between you and the actual performers in the shows you watch? They don't pass your entire subscription fee onto the directors, writers, and actors.
They most definitely do pass on a portion of that subscription fee to directors, writers, and actors. Netflix pays companies to be on their service, not the other way around. And of course it is reasonable to ask whether or not the percentage Netflix takes is fair or whether they're just extracting rent from a captive market. But this is kind of a silly comparison, Netflix's relationship to studios is almost a complete inverse of Apple's relationship with developers. Netflix courts content producers and pays for content to be either licensed to them or created for them in-house.
Typically, when we get into a scenario where both consumers and producers are paying a middleperson to connect them, we should ask questions. We should ask if there are terms being imposed by that middleperson to make it difficult to reach out to customers in any other way (for example, a ban on mentioning other payment methods). We should ask if there are lock-in mechanisms that are designed to artificially increase the cost for consumers to leave the platform. We should ask how many distribution methods exist (are there only 2 streaming services in the world?) and whether or not the current market is competitive.
And we should definitely ask what the value add of that middleperson is and what they think their value add is and what they think is their primary service that they sell. A responsible, positive middleperson doesn't sell a market, it sells services that make it easier to interact with that market, or it licenses and resells content from another market. I think it's a really reasonable question to ask what about the market access that Apple is arguing that developers "owe" them for hasn't already been payed for. We want middlepeople to provide a service that justifies using them over direct access, we don't want them to just be rent-seekers and we don't want their position of power to largely exist only because of restrictions and platform limitations that they created.
If there's a really serious criticism I have of Apple -- well, there's a fair number of varying degrees of seriousness. But I think their original sin is that while they want everyone to acknowledge how much they ostensibly do for developers, they generally act as if applications bring no value to their platform.
Many years ago, when BeOS was just getting going, Be CEO and former Apple exec Jean Louis-Gassee was asked what the difference between Be and Apple was. He answered, "We don't shit on our developers." It's disappointing, to say the least, that this is still a valid criticism criticism nearly a quarter-century later.
Many years ago, when BeOS was just getting going, Be CEO and former Apple exec Jean Louis-Gassee was asked what the difference between Be and Apple was. He answered, "We don't shit on our developers." It's disappointing, to say the least, that this is still a valid criticism criticism nearly a quarter-century later.
Apple’s value is the set of customers who sign up first on iOS rather than web (edit: and who couldn’t be nudged to the web). I’d guess the number isn’t the full billion, but enough that Netflix doesn’t want to lose them.
Anecdotally, there are a lot of "app only" users out there who aren't familiar with opening up a browser application and typing in a URL. I don't know what percentage of users we're talking about, there.
But I have experienced plenty of users that are comfortable with tapping an app on their phones, and even installing one from an app store, but aren't comfortable with using a web browser.
It's not just older, non-technical users. Lots of kids have never known anything but apps. You know how your "average" Mac/PC user would have looked at you funny if you told them to open a terminal or command prompt 15 years ago? That is how many kids view a web browser these days - a slightly weird relic of an earlier time.
(Just to be clear: I detest this state of affairs!)
But I have experienced plenty of users that are comfortable with tapping an app on their phones, and even installing one from an app store, but aren't comfortable with using a web browser.
It's not just older, non-technical users. Lots of kids have never known anything but apps. You know how your "average" Mac/PC user would have looked at you funny if you told them to open a terminal or command prompt 15 years ago? That is how many kids view a web browser these days - a slightly weird relic of an earlier time.
(Just to be clear: I detest this state of affairs!)
> Apple provides them access to, literally, nearly a billion potential customers
On the flip side, if Apple were to no longer provide access to Netflix to those customers, they would be downright hostile about it and would be a watershed moment for Android. What % would change their next phone to one that "Has Netflix"? 10%? 20%? What would it cost Apples reputation to no longer support the juggernaut media consumption app? billions, probably.
Apple knows how much time people spend watching Netflix on their devices, they are not in a position to be negotiating.
I know anecdotally my mother would be on the phone almost immediately asking what android tablet to buy if this was to ever happen.
On the flip side, if Apple were to no longer provide access to Netflix to those customers, they would be downright hostile about it and would be a watershed moment for Android. What % would change their next phone to one that "Has Netflix"? 10%? 20%? What would it cost Apples reputation to no longer support the juggernaut media consumption app? billions, probably.
Apple knows how much time people spend watching Netflix on their devices, they are not in a position to be negotiating.
I know anecdotally my mother would be on the phone almost immediately asking what android tablet to buy if this was to ever happen.
> Apple provides them access to, literally, nearly a billion potential customers
Are they providing them access or are the not denying them access?
Are they providing them access or are the not denying them access?
There are a lot of things I hate about Apple's App Store, but it provides some significant services.
It is not a simple "pipe" between developers and users.
For developers it provides seamless and secure payments, SDKs, APIs, an IDE, and app distribution and updates to roughly a billion customers.
For end-users, it provides a mostly seamless experience, and (unlike other app stores) a nearly airtight guarantee that an app won't be fraudulent, won't install spyware, won't fuck up your machine, and can be easily uninstalled if you don't like it.
There are myriad flaws, and we can choose hate the overarching concept of folks needing an "app store" instead of simply running apt-get or whatever like Real Computer Users™. We can certainly choose to hate many things about it, like Apple's gatekeeping w.r.t. adult/controversial apps or their maddening review process.
But the things they do provide are significant and clearly have value to many.
So yes, I think it's appropriate to think of them as "providing access" and not merely "not denying it."
It is not a simple "pipe" between developers and users.
For developers it provides seamless and secure payments, SDKs, APIs, an IDE, and app distribution and updates to roughly a billion customers.
For end-users, it provides a mostly seamless experience, and (unlike other app stores) a nearly airtight guarantee that an app won't be fraudulent, won't install spyware, won't fuck up your machine, and can be easily uninstalled if you don't like it.
There are myriad flaws, and we can choose hate the overarching concept of folks needing an "app store" instead of simply running apt-get or whatever like Real Computer Users™. We can certainly choose to hate many things about it, like Apple's gatekeeping w.r.t. adult/controversial apps or their maddening review process.
But the things they do provide are significant and clearly have value to many.
So yes, I think it's appropriate to think of them as "providing access" and not merely "not denying it."
The services are significant, but at the same time, Apple commoditizes the users, which only works, because they are gatekeeping all software installations. If users were free to install alternative app stores after a big fat security warning, I doubt that Apple's 30% share would work as today.
>AWS is streaming video, operating hundreds of edge location CDN locations, and everything else running on expensive server infrastructure. AWS has real serious costs with offering that service, to the point that Netflix has yet to determine that it is better to build it themselves.
Somewhat off the core topic, but netflix run their own CDN (I also don't see any evidence for that 1.2 billion AWS bill figure, can you provide a link? Their latest SEC filing doesn't separate cloud service costs from the running of their Open Connect CDN)
Somewhat off the core topic, but netflix run their own CDN (I also don't see any evidence for that 1.2 billion AWS bill figure, can you provide a link? Their latest SEC filing doesn't separate cloud service costs from the running of their Open Connect CDN)
I'm not sure Netflix Open Connect counts as a CDN? They might still use distributed servers from AWS.
Netflix themselves classify it as a content delivery network, and that seems pretty fair - how else would you classify a network they have built to optimise content delivery, by way of peering agreements and physical kit they deliver to ISPs on demand?
They do use AWS for a lot of their internal compute and packaging, but it wouldn't be cost-effective to use AWS for content delivery, even with a deep discount to the highway robbery standard AWS egress prices.
They do use AWS for a lot of their internal compute and packaging, but it wouldn't be cost-effective to use AWS for content delivery, even with a deep discount to the highway robbery standard AWS egress prices.
The CDN nature of Netflix appliances is clear if you read their docs on fill patterns: https://openconnect.zendesk.com/hc/en-us/articles/3600356180...
Netflix installs appliances at peering exchanges around the world: https://www.peeringdb.com/net/457
Disclaimer: I don’t know much beyond a few Google searches on the topic.
Netflix installs appliances at peering exchanges around the world: https://www.peeringdb.com/net/457
Disclaimer: I don’t know much beyond a few Google searches on the topic.
The hardware they use for their CDN was recently discussed on HN. They don't use AWS hardware for their CDN.
https://news.ycombinator.com/item?id=28584738
https://news.ycombinator.com/item?id=28584738
Obiously they've meant IX PoP's or stuff inside ISP networks.
> Apple is wildly delusional on the value that they provide.
I haven't studied it, so I'm speaking out of turn, but I'm thinking that it's cheap for smaller players and expensive for larger ones, and not as a smooth function. NFLX is well past the knee in the curve I guess.
If you buy that, then it's unfair to say Apple is delusional about their value add. On average it's probably fair within reason.
I haven't studied it, so I'm speaking out of turn, but I'm thinking that it's cheap for smaller players and expensive for larger ones, and not as a smooth function. NFLX is well past the knee in the curve I guess.
If you buy that, then it's unfair to say Apple is delusional about their value add. On average it's probably fair within reason.
In the same way that the mafia is being fair taking your money for not removing your kneecaps
Is it reasonable to suggest AWS's primitives and even finished cloud products for video delivery are largely commodities?
Wheras, there is no such thing as the other App Store?
IIRC, Apple customers spend more and don't quote me on this, but are more influential in the spending of others. If that's true, then I think this comment under-represents the utility of operating in the App Store.
It doesn't necessarily mean that it should command the 15% tax, but it isn't "no value" either.
Wheras, there is no such thing as the other App Store?
IIRC, Apple customers spend more and don't quote me on this, but are more influential in the spending of others. If that's true, then I think this comment under-represents the utility of operating in the App Store.
It doesn't necessarily mean that it should command the 15% tax, but it isn't "no value" either.
> Apple seems to maintain the expectation that they deserve 30% of revenue from massive corporations like Netflix, Amazon, etc.
That's exactly what Apple believes.
From Tim Cook's testimony in Epic v. Apple, from Ars Technica:
> The in-app-purchasing (IAP) system itself, Cook said, is simply the most efficient way of collecting a 15 to 30 percent commission on each in-app sale. "If not for IAP, we’d have to come up with another system to invoice developers. It would be a mess."
This view is explicitly affirmed in the Epic v. Apple verdict[1]:
> Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional.
The court found the 30% rate arbitrary but not objectionable[2]:
> Indeed, while the Court finds no basis for the specific rate chosen by Apple (i.e., the 30% rate) based on the record, the Court still concludes that Apple is entitled to some compensation for use of its intellectual property.
Personally, I don't approve of Apple feeling entitled to a cut of commerce that doesn't hit their app store, but the court's take (before appeals) is that it's perfectly legal.
[0]: https://arstechnica.com/gaming/2021/05/ceo-tim-cook-faces-po...
[1]: Page 67, https://s3.documentcloud.org/documents/21060631/apple-epic-j...
[2]: Page 150
That's exactly what Apple believes.
From Tim Cook's testimony in Epic v. Apple, from Ars Technica:
> The in-app-purchasing (IAP) system itself, Cook said, is simply the most efficient way of collecting a 15 to 30 percent commission on each in-app sale. "If not for IAP, we’d have to come up with another system to invoice developers. It would be a mess."
This view is explicitly affirmed in the Epic v. Apple verdict[1]:
> Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional.
The court found the 30% rate arbitrary but not objectionable[2]:
> Indeed, while the Court finds no basis for the specific rate chosen by Apple (i.e., the 30% rate) based on the record, the Court still concludes that Apple is entitled to some compensation for use of its intellectual property.
Personally, I don't approve of Apple feeling entitled to a cut of commerce that doesn't hit their app store, but the court's take (before appeals) is that it's perfectly legal.
[0]: https://arstechnica.com/gaming/2021/05/ceo-tim-cook-faces-po...
[1]: Page 67, https://s3.documentcloud.org/documents/21060631/apple-epic-j...
[2]: Page 150
Yea, legally it’s clear Apple can charge whatever they want. The actual leverage large companies have is by not having their Apps on iOS Apple may lose customers.
But at this point I doubt Netflix is willing to risk it as there is simply to many streaming options. However, Netflix doesn’t need to use IAP so for them it’s a question of increased conversions with IAP rather than dropping the platform. Assuming their also saving a little on CC processing fees a 15% cut is probably a reasonable deal for increasing the number of Netflix customers and quite a bit of revenue for Apple.
But at this point I doubt Netflix is willing to risk it as there is simply to many streaming options. However, Netflix doesn’t need to use IAP so for them it’s a question of increased conversions with IAP rather than dropping the platform. Assuming their also saving a little on CC processing fees a 15% cut is probably a reasonable deal for increasing the number of Netflix customers and quite a bit of revenue for Apple.
> But at this point I doubt Netflix is willing to risk it as there is simply to many streaming options.
Well, but as you point out, they aren't using IAP at the moment so there's nothing to risk.
An interesting question is what would happen if Apple decided to play hardball and demand Netflix use IAP again, with no external option, similar to what is required for video games. Honestly, my money would be on Netflix pulling out of iOS.
Well, but as you point out, they aren't using IAP at the moment so there's nothing to risk.
An interesting question is what would happen if Apple decided to play hardball and demand Netflix use IAP again, with no external option, similar to what is required for video games. Honestly, my money would be on Netflix pulling out of iOS.
If I'm understanding the outcome of the Epic case that these documents came to light from, that kind of hardball would probably go pretty poorly. While Apple mostly won the case, between this and a case in South Korea, it's pretty clear they're going to be required to allow some kind of linking for external account management of "reader apps," which they classify Netflix as.
Personally, I suspect if Apple had not gone the ridiculously overreaching "we want a cut of every purchase of digital goods/services when the purchase occurs in any app on iOS" route, and had let Netflix and Amazon and anyone doing "reader apps" at least link out from the very beginning (and more reasonably, allow them to -- gasp! -- load a web view to purchase/manage subscriptions, buy ebooks, etc.), it would have saved an awful lot of heartache.
Well, that and just go with a 15% cut across the board rather than 30%.
Well, all of that and also include at least streaming game services in their quirky definition of "reader apps".
Personally, I suspect if Apple had not gone the ridiculously overreaching "we want a cut of every purchase of digital goods/services when the purchase occurs in any app on iOS" route, and had let Netflix and Amazon and anyone doing "reader apps" at least link out from the very beginning (and more reasonably, allow them to -- gasp! -- load a web view to purchase/manage subscriptions, buy ebooks, etc.), it would have saved an awful lot of heartache.
Well, that and just go with a 15% cut across the board rather than 30%.
Well, all of that and also include at least streaming game services in their quirky definition of "reader apps".
Are you sure about game subscriptions? They don’t require Blizzard to use IAP for their MMO related apps. These could do a few in game actions, so there is some flexibility.
Are those Blizzard apps on iOS, or on the Mac? As far as I know, on iOS, you have to offer in-app purchases for subscriptions, unless you meet specific criteria -- you may be able to offer subscriptions outside IAP in addition, but you need to let people buy in the app. (On the Mac, though, none of this really applies.)
iOS, though it’s a long way from actually playing the game.
Moreover, Netflix is an app that would work perfectly fine in the browser. Netflix was providing a native app as a courtesy to the customer, not the other way around. Most Netflix subscribers I know would probably shake their fist at Apple and God and then go back to binging Friends in Safari.
I don't think you can do EME in mobile safari? That would probably be a dealbreaker for the movie studios (logical or not).
You can do EME in iOS Safari now, but it's wonky and not very well implemented and Netflix certainly wouldn't do it by choice.
You also can't do downloads in browser.
You also can't do downloads in browser.
I know they added FairPlay in 2018 to Safari on iOS, so I assume it is likely that additional EME support has been enabled since.
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> Apple by comparison demands 15% which is 3.5x as much of a cut. Apple provides credit card processing, and approval into the App Store [...] . This isn't anywhere near the value that AWS provides, despite demanding a much higher premium.
It's access to an extremely valuable demographics. Everyone ships on the App Store first because that's where paying customers and high value users are.
All that AWS infrastructure to stream media is worthless without consumers at the other end of the wire.
It's access to an extremely valuable demographics. Everyone ships on the App Store first because that's where paying customers and high value users are.
All that AWS infrastructure to stream media is worthless without consumers at the other end of the wire.
Correct. You can go to AWS, Azure, GCP, IBM, host yourself, others, if you want cloud infrastructure. It's more or less commoditized.
On the other hand, if you want access thousands of customers who are willing to pay for and use your product ... well that's tough. And it's expensive. The real value is getting exposure to people who will pay real money. Value isn't equal to technical difficulty. That's why Google Ads are pricy, and that's why ads in a niche industry magazine targeting a very specific demographic can be even more expensive.
On the other hand, if you want access thousands of customers who are willing to pay for and use your product ... well that's tough. And it's expensive. The real value is getting exposure to people who will pay real money. Value isn't equal to technical difficulty. That's why Google Ads are pricy, and that's why ads in a niche industry magazine targeting a very specific demographic can be even more expensive.
I think you are underestimating the value of being present on the platform that is Apple. I basically only created my Netflix subscription (which I cancelled by now) because it was super easy to sign up on my Apple TV. I probably wouldn't have bothered to do so on a PC.
> This isn't anywhere near the value that AWS provides, despite demanding a much higher premium.
> Apple is wildly delusional on the value that they provide.
For non-Netflix-like services, strongly disagree. A service with no customers means 0 costs required to pay AWS. Say what you want, but sales & distribution is one of the most important, if not THE most important factor of a business.
> They already have the marketing power to force people to subscribe at their website.
Yes, Netflix specifically does, but other developers who leverage Apple's ecosystem? Not so much.
What's interesting here is that other traditional distributor and retailers of goods and services often have negotiated rates. Apple does no such thing - it's rate is fixed (on paper), meaning Apple thinks is distribution is equal in value for all developers - I think this is where the criticism should be.
> Apple is wildly delusional on the value that they provide.
For non-Netflix-like services, strongly disagree. A service with no customers means 0 costs required to pay AWS. Say what you want, but sales & distribution is one of the most important, if not THE most important factor of a business.
> They already have the marketing power to force people to subscribe at their website.
Yes, Netflix specifically does, but other developers who leverage Apple's ecosystem? Not so much.
What's interesting here is that other traditional distributor and retailers of goods and services often have negotiated rates. Apple does no such thing - it's rate is fixed (on paper), meaning Apple thinks is distribution is equal in value for all developers - I think this is where the criticism should be.
Maybe this is not a popular opinion but I think that Apple do provide the value. They created the device, the OS, the marketing behind it, the physical stores, all of that. The iPhone is an iconic device because of all the investment Apple put into it. Yes, there are also the millions of developers and apps out there.
But the one thing that Apple did right (for me and I guess most iOS users) is that they kept control over the UI & UX. This was my main driver into getting an iPhone. The fact that I interact with Apple and not just every developer in the world. I want to keep that interaction. What I don't want is for most apps to force me to enter my personal info (email) and card details store them somewhere "securely". I want to have a single vendor I trust (arguable this might not be Apple atm). But for me and for most ppl I know that single place is the thing that is the driving factor to keep in the eco system.
What I don't understand is why developers feel entitled (maybe the wrong word) to harming my UX by requesting external payment methods. Again, the investment for this "great" eco system comes from both sides and Apple do deserve a % of that. Maybe 15/30% is not fair but this is the free market. You can always decide not to develop for iOS - nobody is forcing you. Except your customers who I feel in this case developers/companies ignore as per the given theory above.
But the one thing that Apple did right (for me and I guess most iOS users) is that they kept control over the UI & UX. This was my main driver into getting an iPhone. The fact that I interact with Apple and not just every developer in the world. I want to keep that interaction. What I don't want is for most apps to force me to enter my personal info (email) and card details store them somewhere "securely". I want to have a single vendor I trust (arguable this might not be Apple atm). But for me and for most ppl I know that single place is the thing that is the driving factor to keep in the eco system.
What I don't understand is why developers feel entitled (maybe the wrong word) to harming my UX by requesting external payment methods. Again, the investment for this "great" eco system comes from both sides and Apple do deserve a % of that. Maybe 15/30% is not fair but this is the free market. You can always decide not to develop for iOS - nobody is forcing you. Except your customers who I feel in this case developers/companies ignore as per the given theory above.
The customer wants convenience, the developer wants to give convenience, and Apple charges 10-30x the going rate of merchant fees for it. And neither the developer nor the customer can pick a different style of convenience. I don't think it can be a free market if customers can't choose another option and developers can't compete with existing options.
Well I disagree. You can choose Android. What I feel normally lacks from the discussion is that the consumer has consciously chosen the OS and device. That choice needs to be respected and I think developers are now trying to augment what platform is doing. Apart from making more money I can’t see a reason how this benefits the customer (except edge cases - happy to be proven wrong here but haven’t really thought of a good example when this actually very useful). Also it’s more convenient for me to use Apple Pay and manage my subscriptions from the Settings app than from the 20 diff apps I have subscribed to and each one has an incentive to incorporate dark patterns in order to keep me from cancelling. Apple on the other hand cares for me being the next iPhone, watch, Mac, iPad so they Are not too fussed by me cancelling a subscription which I don’t use or want anymore.
How sure are you that customers chose iOS solely for their ability to pay Netflix via IAP, and not like the fact that Apple makes the sexiest, fastest phones that run iMessage and let them call their mom using FaceTime? Like, this is how people choose operating systems, I doubt most users even know how the 30% cut works (not that Apple makes it easy for you to tell them…)
"It's not a free market! Apple sucks and I want to use different products... and sure there are countless alternatives available for purchase online and in stores... but I can't and I don't switch because I love Apple and it has the best product and the others aren't as easy to use. Tyranny!"
The developer is not giving convenience if I can't use my payment information, contact info, and shipping info that I've already provided. Having to give all that info again to a payment processor that I don't necessarily know or trust is not convenient.
Remove all third-party apps from the ecosystem. How long do iDevices survive in this scenario? Even now that it's already such a behemoth of a platform?
Now do the opposite—make Apple as a whole disappear. What would app developers do?
I'm not saying Apple doesn't provide value, but let's not pretend they don't need the third-party developers they are so keen on squeezing no matter what. More than they need Apple, at least.
Now do the opposite—make Apple as a whole disappear. What would app developers do?
I'm not saying Apple doesn't provide value, but let's not pretend they don't need the third-party developers they are so keen on squeezing no matter what. More than they need Apple, at least.
Yes they do. I don’t think I was arguing the opposite. On the contrary. I think it’s a relationship. But one where Apple from day 1 have set the expectations on what and how they want that to work. In the end it’s their platform. Developers make the choice to create apps there and they are not happy with the rules. (Ignoring the Apple Watch keyboard and other features stealing issues here as Apple are 110% at fault there).
What my arguments is: Apple want their devices to have a specific feel and UX - so they enforce rules for iAP. But it’s the feel of an Apple product and customers vote with their money they like that feel.
I know you can make the case of let ppl vote when you have alternative forms of payment but we all know that if that is allowed a certain part of the UX will be hurt. Apple simply do not want to compromise their “vision”, “magic” , “feel” or whatever they want to call it so that developers earn more money.
What my arguments is: Apple want their devices to have a specific feel and UX - so they enforce rules for iAP. But it’s the feel of an Apple product and customers vote with their money they like that feel.
I know you can make the case of let ppl vote when you have alternative forms of payment but we all know that if that is allowed a certain part of the UX will be hurt. Apple simply do not want to compromise their “vision”, “magic” , “feel” or whatever they want to call it so that developers earn more money.
If an app was allowed to say "you can sign up in the App Store for $X, or you can sign up directly on our website for $(0.7 X)", shouldn't that satisfy you? You'd be able to have your convenient UX and keep your financial relationship solely with Apple - paying the full price for that benefit - and others who are happy for the less convenient UX and having a direct financial relationship with the developer will not have to pay for something they don't want.
No because you are breaking the UX with the price reduction incentive. Let’s say we care about the customer’s choice of OS and that they chose to have that single UX. If the app choice is: pay $X using iAP or pay $X using our own payment system: which one would most ppl choose? I’d argue that it will be the iAP.
So they prefer the UX Apple provides.
Now if we start adding incentives towards the other method you are pushing them more to what YOU prefer they do. You as a single developer would always be incentivised to take as much money from as many customers - hence dark patterns. And sure not every product and not every developer but most.
Overtime the trust in the “it just works” erodes as it doesn’t really work well anymore. I don’t think this is something that Apple want to see.
I think I might be happy for a limited trial of same price diff gateways method and see the results.
But as I always try to point out: I chose iOS for the look and feel. I don’t want the freedom in Android. I don’t want to have 30 subscriptions in random places my grandad got tricked into buying. Developers can always make the choice tell ppl to use Android & not develop for iOS and I respect that.
So they prefer the UX Apple provides.
Now if we start adding incentives towards the other method you are pushing them more to what YOU prefer they do. You as a single developer would always be incentivised to take as much money from as many customers - hence dark patterns. And sure not every product and not every developer but most.
Overtime the trust in the “it just works” erodes as it doesn’t really work well anymore. I don’t think this is something that Apple want to see.
I think I might be happy for a limited trial of same price diff gateways method and see the results.
But as I always try to point out: I chose iOS for the look and feel. I don’t want the freedom in Android. I don’t want to have 30 subscriptions in random places my grandad got tricked into buying. Developers can always make the choice tell ppl to use Android & not develop for iOS and I respect that.
No because you are breaking the UX with the price reduction incentive.
I'm not breaking anything. I'm providing information about an alternate service. If you choose to use the IAP, you get the same UX you always did.
So they prefer the UX Apple provides.
With a price of zero they do, but how much is that UX worth to them? How much is it worth to you? I say lets expose it at its true cost and if people want to continue paying that cost then more power to them.
Now if we start adding incentives towards the other method you are pushing them more to what YOU prefer they do.
That's not true at all. Apple is charging 30% for that IAP experience, but right now you have no choice but to pay it. The "incentive" is just "pay a lower price for a lower grade of service", and without that we don't know if Apple are overcharging for the higher grade of service or not.
If, as has been posited, Apple's IAP UX is absolutely worth that 30% to a significant number of consumers, then they'll rationally continue to pay that 30% for that service.
You as a single developer would always be incentivised to take as much money from as many customers - hence dark patterns.
With the 30% discount the developer is in fact making exactly the same money either way, so they don't care which you go with (in fact, they'll make slightly more with the IAP under that scenario, because they'll have to pay processing fees for the out-of-app purchases).
Overtime the trust in the “it just works” erodes as it doesn’t really work well anymore. I don’t think this is something that Apple want to see.
I don't see how. The IAP button is still there. I can also imagine consumers making the decision on whether the 30% is worth it on a case-by-case basis - you might be happy to pay Netflix or Amazon out of app, but maybe for some $2 purchase of magic beans in some throwaway game you'll figure the $0.60c is worth it not to have to stuff around creating some new account on some fly-by-night website.
I'm not breaking anything. I'm providing information about an alternate service. If you choose to use the IAP, you get the same UX you always did.
So they prefer the UX Apple provides.
With a price of zero they do, but how much is that UX worth to them? How much is it worth to you? I say lets expose it at its true cost and if people want to continue paying that cost then more power to them.
Now if we start adding incentives towards the other method you are pushing them more to what YOU prefer they do.
That's not true at all. Apple is charging 30% for that IAP experience, but right now you have no choice but to pay it. The "incentive" is just "pay a lower price for a lower grade of service", and without that we don't know if Apple are overcharging for the higher grade of service or not.
If, as has been posited, Apple's IAP UX is absolutely worth that 30% to a significant number of consumers, then they'll rationally continue to pay that 30% for that service.
You as a single developer would always be incentivised to take as much money from as many customers - hence dark patterns.
With the 30% discount the developer is in fact making exactly the same money either way, so they don't care which you go with (in fact, they'll make slightly more with the IAP under that scenario, because they'll have to pay processing fees for the out-of-app purchases).
Overtime the trust in the “it just works” erodes as it doesn’t really work well anymore. I don’t think this is something that Apple want to see.
I don't see how. The IAP button is still there. I can also imagine consumers making the decision on whether the 30% is worth it on a case-by-case basis - you might be happy to pay Netflix or Amazon out of app, but maybe for some $2 purchase of magic beans in some throwaway game you'll figure the $0.60c is worth it not to have to stuff around creating some new account on some fly-by-night website.
>I'm providing information about an alternate service.
His point was that developers would want to incentivize the alternate service and would, therefore, do things to discourage the IAP system.
His point was that developers would want to incentivize the alternate service and would, therefore, do things to discourage the IAP system.
> next to no value for Netflix
Apple basically has an iron-fisted grip on _worldwide_ audience of people with money to spend. Google, for example, does not, and their App store is a raging dumpster fire in comparison. I'm not saying that their "cut" shouldn't irritate people, it should - that's just market forces at play, but one must also recognize that for Netflix to not be in the App Store would be pretty catastrophi revenue-wise, much for the same reason why it'd be catastrophic for Google to not be the default search engine in iOS.
Apple basically has an iron-fisted grip on _worldwide_ audience of people with money to spend. Google, for example, does not, and their App store is a raging dumpster fire in comparison. I'm not saying that their "cut" shouldn't irritate people, it should - that's just market forces at play, but one must also recognize that for Netflix to not be in the App Store would be pretty catastrophi revenue-wise, much for the same reason why it'd be catastrophic for Google to not be the default search engine in iOS.
AWS does not stream video for Netflix. Netflix runs its own edge caches.
AWS is NOT doing much of the streaming for Netflix. They do their own streaming. AWS is just for their management infrastructure.
[deleted]
The value that Apple brings - which bafflingly you seem to have missed - is over a billion users. That's a significant value. I doubt more than 50 companies in the words history have been able to provide that level of user base on their platform.
I'm not saying 15% isn't a high fee, but your argument that Apple provide little to no value is simply false.
I'm not saying 15% isn't a high fee, but your argument that Apple provide little to no value is simply false.
That's interesting. As a developer I've often felt outright hostility coming from Apple developer relations, and maybe it's this lack of a partnership mentality. They generally treat end users really well, but it's like they see external developers as some sort of parasite feeding on their products. In my experience it's difficult to get actual technical help unless you personally know someone internal to Apple.
From Apple's perspective, developers are either creating competing products or products that Apple will eventually compete with. Either way they would rather not help.
And the arrogance and entitlement they've shown during Epic trial. Apple really believes that their OS and Store are godsend to developers, and this makes developers forever indebted to Apple for the 30% cut of everything happening through it.
I have to use mediocre Xcode, limited OS APIs, fight signing, sandboxing, lack of Vulcan, and capricious review. I need to keep rewriting churning APIs with "No Overview Available" instead of documentation. I'd rather not use any of this, but Apple keeps users hostage, because browser engines that would embarrass Safari are banned.
I have to use mediocre Xcode, limited OS APIs, fight signing, sandboxing, lack of Vulcan, and capricious review. I need to keep rewriting churning APIs with "No Overview Available" instead of documentation. I'd rather not use any of this, but Apple keeps users hostage, because browser engines that would embarrass Safari are banned.
> Apple really believes that their OS and Store are godsend to developers,
Or, at least, their lawyers have decided that is the line of argument likeliest to lead to a victory.
Or, at least, their lawyers have decided that is the line of argument likeliest to lead to a victory.
Having followed Apple very closely for more than two decade and tried very hard to convince myself that was the case, their PR and Marketing are simply very aligned on this issue. Especially after Katie Cotton stepped down.
My tinfoil hat theory is they allow the jailbreaking scene to persist instead of shoring up holes within a second of each jailbreak's release because they poach tweak ideas. When looking at the overlap between popular early jailbreak tweaks and features that were added to iOS over the years, this really doesn't seem farfetched.
The Apple of today does fix holes as soon as they can. But they don't really need to steal jailbreak tweaks anymore to figure out that people want to be able to change their homescreens…
There was a lot more than that which was copied, honestly. Notification center. Control center. Widgets. Low power mode. Notifications where you can reply in line. Probably hundreds more tiny quality of life things too that have made their way into iOS over the years that were first seen on cydia. Here's a list of 60 of them at least (2018):
https://ios.gadgethacks.com/how-to/60-ios-features-apple-sto...
https://ios.gadgethacks.com/how-to/60-ios-features-apple-sto...
Oh, I 100% agree, I'm just saying Apple may not see it that way anymore.
Don't forget products they just ban
Actually I've been invited to a 2 day developer session by Apple in the UK. It was very cool and educational - 2017 I think. It was all about partnership and how Apple can help all the 20 or so apps that are out there, what different APIs and new features the Apps can use and they had team members from a variety of different areas of the business. They didn't check that my app was using RN at the time so... :D
But needless to say that is a very different XP in comparison to all the millions of engineers who don't get that chance and the dev forums are useless most of the time.
Anyways just wanted to share that as an XP as I've never heard of anyone else ever been on one of these from my tech friends.
But needless to say that is a very different XP in comparison to all the millions of engineers who don't get that chance and the dev forums are useless most of the time.
Anyways just wanted to share that as an XP as I've never heard of anyone else ever been on one of these from my tech friends.
If you're lucky you can get a WWDC lab session.
However, I suspect Apple developer relations has largely turned into a broadcast/funnel system since 1:1 support doesn't scale well to millions of developers.
However, I suspect Apple developer relations has largely turned into a broadcast/funnel system since 1:1 support doesn't scale well to millions of developers.
Online WWDC has actually made it fairly easy to get a lab session, it's pretty nice!
> They continue to think Netflix as a physical product ( As they often like to compare Physical Software distribution before App Store )
Framing the relationship this way gives Apple more power and control, so that's what they're doing, no surprise. They're too smart to be merely misunderstanding such things.
Framing the relationship this way gives Apple more power and control, so that's what they're doing, no surprise. They're too smart to be merely misunderstanding such things.
Woz never seemed bad at teamwork. "Whole banana" was the results of jobs obession with dictatorial control, not the cause of it. Woz tried to add expansion ports to the Apple computer, but Jobs refused. Jobs seems to be throwing Woz under the bus (as usual) to deflect from his own flaws.
> Woz tried to add expansion ports to the Apple computer
Like the expansion slots in the [Apple II, Apple ///, Mac II, IIgs, Power Mac, Mac Pro, etc.] or the [SCSI, ADB, USB, FireWire, PC/Express/SD card, Thunderbolt, etc.] expansion ports on various Apple computers?
Like the expansion slots in the [Apple II, Apple ///, Mac II, IIgs, Power Mac, Mac Pro, etc.] or the [SCSI, ADB, USB, FireWire, PC/Express/SD card, Thunderbolt, etc.] expansion ports on various Apple computers?
yes. Here's wikipedia on the Apple II:
"During the design stage, Jobs argued that the Apple II should have two expansion slots, while Wozniak wanted eight. After a heated argument, during which Wozniak threatened that Jobs should "go get himself another computer", they decided to go with eight slots."
https://en.wikipedia.org/wiki/Steve_Wozniak
"During the design stage, Jobs argued that the Apple II should have two expansion slots, while Wozniak wanted eight. After a heated argument, during which Wozniak threatened that Jobs should "go get himself another computer", they decided to go with eight slots."
https://en.wikipedia.org/wiki/Steve_Wozniak
I love that quote. To get where you want to be, it may be helpful to build the skills you want, before you need them.
At this point, an organization like Apple is too cemented to easily change. I think you can't learn _everything_ on the job, because some things you'll learn too late. Now, it's more than "a few decades later," and have they really learned how to partner?
At this point, an organization like Apple is too cemented to easily change. I think you can't learn _everything_ on the job, because some things you'll learn too late. Now, it's more than "a few decades later," and have they really learned how to partner?
I think Steve Jobs did learn how to partner with people and being very very careful which battle to pick after he came back from NeXT. Qualcomm Modem and Patents agreement, Gorilla Glass on Original iPhone. Both likely pissed off Apple's Operation because of their huge increase in BOM. As Disney's ex CEO Bob Iger said, if Steve was alive they would probably have bought or partnered with Disney on streaming. Now Apple is in the content business competing directly with Netflix and Disney.
As shown in Qualcomm, IMG case. Tim Cook's Apple just aren't very good at partnering.
As shown in Qualcomm, IMG case. Tim Cook's Apple just aren't very good at partnering.
If they do some major restructuring that is.
What does IAP stand for in this context?
In-App Purchase
in-app purchase, i believe
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.
This is a solved problem. Just do what most American cities do with other natural monopolies like utilities: use careful price controls to cap margins and slow rate increases. You don't need to invent some esoteric market-based solution, especially for a service where marginal costs are near zero and supply is almost infinite.
It is not a 'solved problem'. Price controls are not easy for anyone to manage. Companies can easily find ways around them in many cases.
Enabling companies to categorize themselves as 'platforms' or otherwise and then stipulating both benefits and requirements based on those labels makes a lot of sense comparatively. The general problem though is that the government isn't typically using regulations to improve freedom and competition. The government looks at regulation as a way to extract money, so solutions that encourage competition on a level playing field through market forces (like OP's) aren't given fair consideration.
Enabling companies to categorize themselves as 'platforms' or otherwise and then stipulating both benefits and requirements based on those labels makes a lot of sense comparatively. The general problem though is that the government isn't typically using regulations to improve freedom and competition. The government looks at regulation as a way to extract money, so solutions that encourage competition on a level playing field through market forces (like OP's) aren't given fair consideration.
> Just do what most American cities do with other natural monopolies like utilities: use careful price controls to cap margins and slow rate increases.
Nothing Apple does is a natural monopoly.
Artificial monopolies can be maintained through vertical integration. If you don't like their app store, use another one. If all they provide is the app store, that's easy, and every platform would have half a dozen or more.
But if using a different app store requires you to develop your own operating system, and convince millions of third party developers to make applications for it even before it has any users, and make your own hardware, on and on, well then it's infeasible to make a competing app store and you get an uncompetitive and abusive market.
The solution there isn't to regulate it like a utility, it's to break up the company so that the operating system isn't made by the same company as the app store and has no reason to restrict the users to only the one. Then you have competition again and don't need any regulation other than the constraint on vertical integration.
Nothing Apple does is a natural monopoly.
Artificial monopolies can be maintained through vertical integration. If you don't like their app store, use another one. If all they provide is the app store, that's easy, and every platform would have half a dozen or more.
But if using a different app store requires you to develop your own operating system, and convince millions of third party developers to make applications for it even before it has any users, and make your own hardware, on and on, well then it's infeasible to make a competing app store and you get an uncompetitive and abusive market.
The solution there isn't to regulate it like a utility, it's to break up the company so that the operating system isn't made by the same company as the app store and has no reason to restrict the users to only the one. Then you have competition again and don't need any regulation other than the constraint on vertical integration.
What is relevant is that the App Store is a natural monopoly within the iOS ecosystem. As long as Apple has such significant market power (including a substantial market share, especially as a percentage of revenue, not just units sold) their natural monopoly on the iOS platform will extend to them being a willing participant in an oligopoly.
Said state of affairs is the expected outcome of Apple having a natural monopoly and there being only one other substantial mobile OS market participant, who just so happens to also operate a natural monopoly for app sales - albeit a much, much more tenuous one.
Said state of affairs is the expected outcome of Apple having a natural monopoly and there being only one other substantial mobile OS market participant, who just so happens to also operate a natural monopoly for app sales - albeit a much, much more tenuous one.
> What is relevant is that the App Store is a natural monopoly within the iOS ecosystem.
That's very much not a natural monopoly, but a constraint that is forced onto the ecosystem by Apple. There is no technical reason for it existing, but it exists by design.
That's very much not a natural monopoly, but a constraint that is forced onto the ecosystem by Apple. There is no technical reason for it existing, but it exists by design.
Absolutely not a solved problem. The utilities have no reason to innovate at that point.
In my local municipality I have no way to choose renewable energy apart from building my own power plant on my roof. That’s a complete failure of these government granted monopolies.
In my local municipality I have no way to choose renewable energy apart from building my own power plant on my roof. That’s a complete failure of these government granted monopolies.
The regulating bodies of those utilities work hard to create incentives for them to innovate. I spent four years of my career working on energy programs with major utilities around the country in which they tried to incentive reductions in energy usage.
Which is a curious statement: why would a electrical utility want people to use less electricity?
The reason is because the regulatory agencies created incentives within the regulatory framework to encourage them to do it. Basically the regulators start with an outcome, bake that outcome into how utilities get paid, and then let the utility innovate to figure out how to do it. This led to meaningful reduction in energy usage across many markets.
Which is a curious statement: why would a electrical utility want people to use less electricity?
The reason is because the regulatory agencies created incentives within the regulatory framework to encourage them to do it. Basically the regulators start with an outcome, bake that outcome into how utilities get paid, and then let the utility innovate to figure out how to do it. This led to meaningful reduction in energy usage across many markets.
I'd love to hear more, what kinds of incentives? Is it something like, "if you get X efficiency, you get N more dollars"?
There are a bunch of different models but they mostly come down to the regulatory agency (IE: the PUC) creating a pot of money for utilities that is paid out when they reach energy reduction goals.
You can learn more by looking into Demand Response programs and Demand Management programs around the country.
You can learn more by looking into Demand Response programs and Demand Management programs around the country.
There's no such thing as choosing renewable energy on a grid. Energy is fungible. If you get on one of those "choose green" schemes, you're just getting the same energy but also buying some credits from somewhere else.
What incentive does the app store have to innovate now?
It's not something that should be a choice. The government should move as much power to renewable as fast as possible and you should just keep getting power. This idea of "choice" for a commodity based on how it was produced not based on any features is crazy and will never work.
What's wrong with your local power provider not incorporating renewables? There are still solar installers, and it probably a better deal overall to own your own plant, as it were.
My city recently forced every resident into an esoteric market-based solution for electricity (sold with a pack of lies about renewable energy and reduced rates) that required explicit opt-out to avoid and stay with the provider who actually generates power and services the people on its infrastructure.
Which city?
There's no historical evidence of natural monopolies existing at the scale of cities. There are multiple American examples of decades long competition in utilities. The economic rationale for politicians to give their friends local monopolies long postdates the practice of doing so.
> The Myth of Natural Monopoly
> Most so-called public utilities have been granted governmental franchise monopolies because they are thought to be "natural monopolies." Put simply, a natural monopoly is said to occur when production technology, such as relatively high fixed costs, causes long-run average total costs to decline as output expands. In such industries, the theory goes, a single producer will eventually be able to produce at a lower cost than any two other producers, thereby creating a "natural" monopoly. Higher prices will result if more than one producer supplies the market.
> Furthermore, competition is said to cause consumer inconvenience because of the construction of duplicative facilities, e.g., digging up the streets to put in dual gas or water lines. Avoiding such inconveniences is another reason offered for government franchise monopolies for industries with declining long-run average total costs.
>It is a myth that natural monopoly theory was developed first by economists, and then used by legislators to "justify" franchise monopolies. The truth is that the monopolies were created decades before the theory was formalized by intervention-minded economists, who then used the theory as an ex post rationale for government intervention. At the time when the first government franchise monopolies were being granted, the large majority of economists understood that large-scale, capital intensive production did not lead to monopoly, but was an absolutely desirable aspect of the competitive process.
http://mises-media.s3.amazonaws.com/rae9_2_3_3.pdf
> The Myth of Natural Monopoly
> Most so-called public utilities have been granted governmental franchise monopolies because they are thought to be "natural monopolies." Put simply, a natural monopoly is said to occur when production technology, such as relatively high fixed costs, causes long-run average total costs to decline as output expands. In such industries, the theory goes, a single producer will eventually be able to produce at a lower cost than any two other producers, thereby creating a "natural" monopoly. Higher prices will result if more than one producer supplies the market.
> Furthermore, competition is said to cause consumer inconvenience because of the construction of duplicative facilities, e.g., digging up the streets to put in dual gas or water lines. Avoiding such inconveniences is another reason offered for government franchise monopolies for industries with declining long-run average total costs.
>It is a myth that natural monopoly theory was developed first by economists, and then used by legislators to "justify" franchise monopolies. The truth is that the monopolies were created decades before the theory was formalized by intervention-minded economists, who then used the theory as an ex post rationale for government intervention. At the time when the first government franchise monopolies were being granted, the large majority of economists understood that large-scale, capital intensive production did not lead to monopoly, but was an absolutely desirable aspect of the competitive process.
http://mises-media.s3.amazonaws.com/rae9_2_3_3.pdf
Make them a (common carrier)[https://en.wikipedia.org/wiki/Common_carrier] just like was done for WAN access in the USA. Hahahahahaha.
The price the users pay to Facebook is their privacy and attention. What would a price cap for that look like?
Better plan? How about we stop letting tech companies reach "monopoly scale"?
The market is globally competitive. How would expect tech companies to compete if you have policies that continuously place them at a disadvantage against global competitors.
Tariffs don't solve these problems either. OP's suggestion is pretty decent idea relative to playing wack a mole with price fixing while trying to make sure your country's corps can compete on the global market.
Tariffs don't solve these problems either. OP's suggestion is pretty decent idea relative to playing wack a mole with price fixing while trying to make sure your country's corps can compete on the global market.
> The market is globally competitive.
If national governments are going to allow companies to be trans-national, then we clearly need trans-national regulatory authorities. This isn't rocket science.
People act like corporations are immutable acts of divine intervention. They are an artifact we create and we are free as a society to change their parameters however we wish.
If national governments are going to allow companies to be trans-national, then we clearly need trans-national regulatory authorities. This isn't rocket science.
People act like corporations are immutable acts of divine intervention. They are an artifact we create and we are free as a society to change their parameters however we wish.
It's not a free market, it has never been a free market, and this is just another part of a market that should also be regulated.
>How would expect tech companies to compete if you have policies that continuously place them at a disadvantage against global competitors.
We can look at a map of most popular messaging apps per country in the light of todays downtime and see that they don't or they compete with themselves.
It also shows the only places where competition can grow to a scale where it can even hope to start competing and survive is where there's first a protectionist policy in place favoring domestic players.
We can look at a map of most popular messaging apps per country in the light of todays downtime and see that they don't or they compete with themselves.
It also shows the only places where competition can grow to a scale where it can even hope to start competing and survive is where there's first a protectionist policy in place favoring domestic players.
I agree, but there may be certain things like electric power grids, sewer systems, messaging systems, high bandwidth ISPs, where it may not make a lot of sense to have two (or not two in a particular geographic location). In that sense you may need some regulation.
Sure, but why limit this to tech companies? Let's also apply this to banks, landlords, governments, grocery chains, and employers in general.
Why should I not get the best wages, negotiated employment agreement, interest rates, lease terms, and deal with the IRS on taxes that I really don't want to pay as my most successful peer?
Banks bend over backwards for their VIP customers, why shouldn't they do the same for me?
My neighbours didn't get a rent increase this month because my landlord likes them, why should I have to negotiate for getting the same thing?
Bill on my team got a 30% bonus this year, I also want a 30% bonus... And would love to see this sort of thing codified in law.
Why should I not get the best wages, negotiated employment agreement, interest rates, lease terms, and deal with the IRS on taxes that I really don't want to pay as my most successful peer?
Banks bend over backwards for their VIP customers, why shouldn't they do the same for me?
My neighbours didn't get a rent increase this month because my landlord likes them, why should I have to negotiate for getting the same thing?
Bill on my team got a 30% bonus this year, I also want a 30% bonus... And would love to see this sort of thing codified in law.
You snark, but legally preventing banks from offering better rates to favored clients would probably be a good thing for society and the banks themselves. After all, plenty of charming and well liked clients have turned out to be terrible credit risks.
Favored clients in this case aren't slick guys in a suit, I'm talking about people who want the bank to manage billions of dollars for them, as compared to me and my shitty savings account that may or may not have any money in it.
Credit scores are a very good thing. Someone who pays their bills on time shouldn’t have to pay the same rate as someone who always skips the bill, and without them, every loan would have 10% interest at least, even for mortgages
The concept is fine. The implementation is garbage (in the US), and insufficiently transparent.
"but why limit.. " assumes we do things in an absolute manner. But we don't. All rules and regulations are arbitrary to an extent. We have different rules depending on the situation, the entity, etc. We get to pick and choose the rules that we think will benefit society the most.
Might be too broad. Especially as the scale gets smaller I think that non-quantitative aspects can reasonably affect who you want to do business with. For example, if I'm annoying and rude to my local mechanic and he starts charging me extra to deal with my bullshit I don't really see a problem with that.
There does start to be a problem however if he's the only mechanic in town or if he charges more or less based on race or some other protected class.
I think it's a very hard in general to find the balance on problems like this one, and I don't expect you can come up with a one size fits all rule.
There does start to be a problem however if he's the only mechanic in town or if he charges more or less based on race or some other protected class.
I think it's a very hard in general to find the balance on problems like this one, and I don't expect you can come up with a one size fits all rule.
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Having this requirement when dealing with tech monopolies is uniquely helpful because in some cases there is no alternative. We can always rent, shop or bank other places. I'd argue where there isn't a thriving marketplace of choice monopolies should have to have the same rules with all their partners.
You can always use other software as well. The only reason HN believe Apple to be a monopoly is because the product they purchased does what it was advertised to do - security through chain of trust via an good-but-imperfect organization. It's only a legal monopoly if the courts say so, and the judge in Epic v Apple defined the market in a way that actually made sense - they aren't a monopoly on mobile game purchases, but they did took anticompetitive actions in that market to stifle competition.
> I'd argue where there isn't a thriving marketplace of choice monopolies should have to have the same rules with all their partners.
They can't have a monopoly on iPhones because the iPhone isn't a market - it's a device where the App Store is the killer feature. There are other products you can buy that compete with the iPhone and its app store.
> I'd argue where there isn't a thriving marketplace of choice monopolies should have to have the same rules with all their partners.
They can't have a monopoly on iPhones because the iPhone isn't a market - it's a device where the App Store is the killer feature. There are other products you can buy that compete with the iPhone and its app store.
Apple as of years ago was capturing over 90% of all the margin in smartphones (https://www.cnbc.com/2016/11/23/apple-captures-record-91-per...). I'd argue that represents a monopoly in paid smartphones. Our option as users is either buy a phone from Apple or accept what is essentially a free service from Google (you have to buy the hardware)... who are giving that away to solidify their search monopoly. This to me doesn't represent a thriving marketplace of user choice.
90% of global smartphone profits does not mean 90% of devices in the market. It's been demonstrated for years that iPhone users are much more likely to pay for apps. It's possible to be extremely profitable and not have a monopoly on the market because the iPhone isn't just an appliance but a Veblen good as well.
It does however mean Apple has significant market power. Almost by definition: in a very counterfactual perfectly competitive smartphone market, everyone sells at cost and there aren't any profits. Reducing it to monopoly vs. not-a-monopoly is drawing too bright a line.
And I don't really think iPhones are a Veblen good exactly. Targeted at higher-income buyers? Yes. Valued as much for design as aesthetics? Absolutely. But pretty sure a $500 iPhone would outsell an otherwise-identical $800 iPhone, nevertheless.
And I don't really think iPhones are a Veblen good exactly. Targeted at higher-income buyers? Yes. Valued as much for design as aesthetics? Absolutely. But pretty sure a $500 iPhone would outsell an otherwise-identical $800 iPhone, nevertheless.
[deleted]
I agree with everything you just said but without the irony.
We could also just put a tax of 100% on any revenue in excess of $10bn a year and nip this entire society-destroying problem in the bud.
That -sounds- simple, but it isn't, and in reality any company would easily bypass that by simply creating other companies to take some of the revenue. They already do that to avoid international taxes. As an example, the US charges tax on all income coming to a US company so companies have entities in countries like Ireland and Luxembourg to keep that money out of the US government's reach.
So Apple might have $100B stuck in Ireland, unable to bring it to the US, but it doesn't matter, that money still counts for their shareholders.
And it's the same thing here. If you try to tax $10B they'll just have 100 companies all making $9.9B/yr, in a variety of different countries, completely separate from each other, and you're back where you started.
And while this would be extremely complicated/expensive for them to manage, it'd be profitable because the alternative is to get a 100% tax on those profits.
Taxes aren't easy. And calling a company that sells phones a "society-destroying problem" is a bit hyperbolic, don't you think?
So Apple might have $100B stuck in Ireland, unable to bring it to the US, but it doesn't matter, that money still counts for their shareholders.
And it's the same thing here. If you try to tax $10B they'll just have 100 companies all making $9.9B/yr, in a variety of different countries, completely separate from each other, and you're back where you started.
And while this would be extremely complicated/expensive for them to manage, it'd be profitable because the alternative is to get a 100% tax on those profits.
Taxes aren't easy. And calling a company that sells phones a "society-destroying problem" is a bit hyperbolic, don't you think?
There’s nothing simple about it. It would require pages of statute as well as regulatory guidance, and some of the most wealthy and capable forces in our modern world would be arrayed against it trying to avoid and evade the rules.
None of those things make the proposal impossible however.
It would be a dismal society indeed if we unilaterally surrendered to every instance of centralized malevolent power without a fight.
None of those things make the proposal impossible however.
It would be a dismal society indeed if we unilaterally surrendered to every instance of centralized malevolent power without a fight.
So what happens to the company spending 10.5bn to earn 11 bn? They just get a net loss of 0.5 bn?
edit: Or lets pick a real example and see how that works out. ArcelorMittal is a major steel provider. They sold $53B last year. They had a tough year though, so their final net loss was actually about half a billion.
Under your proposal, they would have lost 43 billion dollars. Uh oh, you just collapsed the steel industry.
edit: Or lets pick a real example and see how that works out. ArcelorMittal is a major steel provider. They sold $53B last year. They had a tough year though, so their final net loss was actually about half a billion.
Under your proposal, they would have lost 43 billion dollars. Uh oh, you just collapsed the steel industry.
I assume the idea is that large companies such as this would have a period of time to scale down operations to the largest size where it still makes sense, and then more competitors would pop up to take over the market share they leave behind. I’m not defending the proposal since I’m too ignorant to have an opinion worth speaking out loud, but that was my interpretation at least.
It’s even simpler. They’d split up into pieces.
Seeing as how there are very few massive companies that weren’t created by piecing together smaller companies in the first place it shouldn’t confuse anyone. Also companies spin off parts constantly when they think it’s in their interest so they idea they won’t know how to do it is frivolous.
You could certainly make an argument that my $10bn number is too low, or that there should be a sliding scale of some sort but the concept and it’s likely outcome is very easy to understand.
Seeing as how there are very few massive companies that weren’t created by piecing together smaller companies in the first place it shouldn’t confuse anyone. Also companies spin off parts constantly when they think it’s in their interest so they idea they won’t know how to do it is frivolous.
You could certainly make an argument that my $10bn number is too low, or that there should be a sliding scale of some sort but the concept and it’s likely outcome is very easy to understand.
It's a silly idea because plenty of companies have high revenue and low profit (or net loss), and are not anti-competitive in the slightest. An arbitrary revenue cap doesn't help the situation at all, as evidenced by the steel company.
Disincentivizing growth is... dumb.
Disincentivizing growth is... dumb.
Nah. Splitting up ArcelorMittal is a fucking great idea.
Our competitive landscape is being absolutely choked by anti-competitive behavior, monopoly, and single point of failure problems in supply chains, labor markets, commodities markets, and everything else.
It’s unsafe and bad for society and we should take decisive and aggressive action to stop it.
Instead we’re so accustomed to it and dulled into submission by decades of corporate PR efforts that people will somehow think it makes sense to reflexively advocate for lawless monopolists[0] on message boards in the name of “growth”.
[0] https://www.reuters.com/article/us-arcelor-africa-antitrust-...
https://www.hindustantimes.com/business/arcelormittal-fined-...
https://www.luxtimes.lu/en/business-finance/arcelormittal-fi...
Our competitive landscape is being absolutely choked by anti-competitive behavior, monopoly, and single point of failure problems in supply chains, labor markets, commodities markets, and everything else.
It’s unsafe and bad for society and we should take decisive and aggressive action to stop it.
Instead we’re so accustomed to it and dulled into submission by decades of corporate PR efforts that people will somehow think it makes sense to reflexively advocate for lawless monopolists[0] on message boards in the name of “growth”.
[0] https://www.reuters.com/article/us-arcelor-africa-antitrust-...
https://www.hindustantimes.com/business/arcelormittal-fined-...
https://www.luxtimes.lu/en/business-finance/arcelormittal-fi...
I am sympathetic to your argument, but it would be stronger if you didn't project the "why" onto a large group of people. It's pretty clear that the reasons are complex, nuanced, and possibly only a problem at scales most of us never encourage. (I think there are probably also benefits of the large size, e.g. Walmart has completely changed what you can buy for low prices, which has incredible value to many people)
Also, I'm not sure the SPOF problems are a result of anti-competitive behavior - AIUI, it's because JIT delivery between different entities is far more cost effective, and the human brain tends to ignore hidden risks.
Also, I'm not sure the SPOF problems are a result of anti-competitive behavior - AIUI, it's because JIT delivery between different entities is far more cost effective, and the human brain tends to ignore hidden risks.
While I would definitely entertain extreme tax tiers at high revenue limits (like $10B/yr), it is important to note that there is value in Apple making money.
There are a lot of jobs created between the $10B and $1T levels. And as citizens of Apple's home nation, it greatly benefits us that those high-quality jobs are available.
A 100% tax (or even 80%) tax would discourage a lot of products from existing. Apple would probably move down to simply offering just phones and apps only and removing everything else. I know that sounds good in theory, but there are indirect benefits for these other services that they offer, in addition to jobs. It also bolster's California's economy all the way down to bodegas, bars, restaurants, and hobby shops.
So an alternative tax like 60% on revenues above $50B that can not be deducted against might be a more reasonable alternative.
There are a lot of jobs created between the $10B and $1T levels. And as citizens of Apple's home nation, it greatly benefits us that those high-quality jobs are available.
A 100% tax (or even 80%) tax would discourage a lot of products from existing. Apple would probably move down to simply offering just phones and apps only and removing everything else. I know that sounds good in theory, but there are indirect benefits for these other services that they offer, in addition to jobs. It also bolster's California's economy all the way down to bodegas, bars, restaurants, and hobby shops.
So an alternative tax like 60% on revenues above $50B that can not be deducted against might be a more reasonable alternative.
It's an interesting thought experiment at least. What would the hidden incentives of something like that be?
For example, if a company wanted to keep growing, it would have to split organically into separate corporate entities. What would stop them establishing "favored" relationships with each other? Say for example Facebook splits out "Zuckerburg data centers inc" - what's to stop them pricing themselves above market to avoid taking on other customers, and then giving FB a hefty discount? You could mandate that there be no board overlap, but shareholders would probably receive a split.
For example, if a company wanted to keep growing, it would have to split organically into separate corporate entities. What would stop them establishing "favored" relationships with each other? Say for example Facebook splits out "Zuckerburg data centers inc" - what's to stop them pricing themselves above market to avoid taking on other customers, and then giving FB a hefty discount? You could mandate that there be no board overlap, but shareholders would probably receive a split.
You'd need to actually draft a law rather than write it on a napkin and there would be armies of very well paid lawyers trying to avoid it, but that's common to any attempt to break up concentrated power.
In that context it wouldn't be all that hard. You'd need to figure out some definitions for common ownership, joint enterprise, and so on. A lot of those laws and definitions already exist. It's only really in the last few decades that we've abandoned antitrust law but we have successfully done things like this in the past.
In that context it wouldn't be all that hard. You'd need to figure out some definitions for common ownership, joint enterprise, and so on. A lot of those laws and definitions already exist. It's only really in the last few decades that we've abandoned antitrust law but we have successfully done things like this in the past.
When have we capped the potential revenue of companies successfully in the past? I've never heard of it
If Zuckerberg data centers wants to keep growing, then at some point they will have to find external customers.
Too easy to get around, as soon as company A starts making $11B they make a new company B that charges $1B for some random service, probably "consulting".
Thats actually what a lot of firms do, and what was really prominant in the Cannabis industry;
Cannabis companies couldnt do "real banking" do to federal shenanigans.
So instead why dispensaries would do, is make another LLC who buys the building and all the building permits that are municipally regulated - then as the municipality zoned and approved locations and projects for dispensaries and distribution licenses (which had a multitude of their own specific restrictions)
They would then rent the facilities for ridiculous rental amounts which the rental company would legally be able to put into any regular bank - then make loans to the cannabis companies and dispensaries for whatever operating expenses were needed.
This got really ugly when Med Men, based out of LA, was made really public because of douchebaggery happening in the company revealing how they had been gaming their own investors etc...
Cannabis companies couldnt do "real banking" do to federal shenanigans.
So instead why dispensaries would do, is make another LLC who buys the building and all the building permits that are municipally regulated - then as the municipality zoned and approved locations and projects for dispensaries and distribution licenses (which had a multitude of their own specific restrictions)
They would then rent the facilities for ridiculous rental amounts which the rental company would legally be able to put into any regular bank - then make loans to the cannabis companies and dispensaries for whatever operating expenses were needed.
This got really ugly when Med Men, based out of LA, was made really public because of douchebaggery happening in the company revealing how they had been gaming their own investors etc...
Why not $9bn a year?
You got to start the discussion somewhere.... For me, I t think that it should be related to the number of employees.
A cap on employees would probably be a negative thing, but a cap on revenue per employee would incentivise hiring people
that's the solution
Talking about monopolies, why does Facebook and HN have network issues at the same time.
Maybe people visit other sites when the ones they would have used go down? I don't know for sure but it is a plausible explanation for me.
makes sense but at the same time it surprises me
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.
This is naive, IMO.
Even if the app store was run differently, say allowing a competing way of installing apps, Apple still have plenty of fungible power to make such deals. You might have ticked a box to make it technically fair, for some definition of, but that would probably be just cosmetic. IE, app store would still represent most revenue and everyone is in the same position but a few geeks.
The "platform game" establishes market power, where buyers and sellers need to go through you. They have no negotiating power, and you can price to make deals that take all the "surplus utility" off the table, in classic economic terms.
So... reality isn't perfect and some players are big enough to negotiate. Netflix is that player here. They negotiate when they have to, but try to keep it quite.
When the market is this structured, this is how it works.
Even if the app store was run differently, say allowing a competing way of installing apps, Apple still have plenty of fungible power to make such deals. You might have ticked a box to make it technically fair, for some definition of, but that would probably be just cosmetic. IE, app store would still represent most revenue and everyone is in the same position but a few geeks.
The "platform game" establishes market power, where buyers and sellers need to go through you. They have no negotiating power, and you can price to make deals that take all the "surplus utility" off the table, in classic economic terms.
So... reality isn't perfect and some players are big enough to negotiate. Netflix is that player here. They negotiate when they have to, but try to keep it quite.
When the market is this structured, this is how it works.
An alternative market would create pressure on Apple. If Netflix tells the App store to go screw themselves and lists on a different store, then the App Store gets that much less traffic and either has to compete or lose out.
I don't think it does, beyond box ticking. You're not likely to get enough competition to get competitive market dynamics on iPhones. Sure, a highly motivated user might go to alternative app stores.
Netflix does not need to go to a different store. They're influential enough to negotiate. Apple would cut them the discount, like now, and they wouldn't. The other store will not have enough users to make the reduced fees worth ditching the app store.
If there was enough competition, most of the app store profits would dissipate. That's what competition does. Users wouldn't pay 20-30%'extra to have apple's stamp, prices would fall and the business model is gone.
No little tickbox rule will make a competitive market in app stores. These markets are structured by nature. That's why platforms are so powerful.
Netflix does not need to go to a different store. They're influential enough to negotiate. Apple would cut them the discount, like now, and they wouldn't. The other store will not have enough users to make the reduced fees worth ditching the app store.
If there was enough competition, most of the app store profits would dissipate. That's what competition does. Users wouldn't pay 20-30%'extra to have apple's stamp, prices would fall and the business model is gone.
No little tickbox rule will make a competitive market in app stores. These markets are structured by nature. That's why platforms are so powerful.
>Sure, a highly motivated user might go to alternative app stores.
Highly motivated users like kids who want to install Fortnite on their phones? That would give an "iOS Epic Store" a foot in the door, and while I'm not a huge fan of Epic, I think that would at least introduce some competition for Apple.
Highly motivated users like kids who want to install Fortnite on their phones? That would give an "iOS Epic Store" a foot in the door, and while I'm not a huge fan of Epic, I think that would at least introduce some competition for Apple.
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Does that seem to be the case for Google? My impression was that both companies take essentially the same percentages. They even both announced programs over the last year to reduce their fees for devs making under $1 million a year, only Apple beat Google to the punch there. My take away is that Google has felt more pressure from public perception/noise making than alternative app stores.
From a consumer point of view, this is terrible.
No, it increases choice and lowers costs for the consumer. If you see switching app stores a "cost" because it's less practical, you most likely would still be able to use your store of choice, but you might need to pay more.
I don't see Netflix pulling out of the App Store if there alternatives. Right now, this is the only thing they can do to retaliate.
I don't see Netflix pulling out of the App Store if there alternatives. Right now, this is the only thing they can do to retaliate.
>If you see switching app stores a "cost" because it's less practical, you most likely would still be able to use your store of choice
This doesn't really match what's happened with the PC gaming marketplace. Facebook pays for exclusives to the Oculus Store, Epic (whose lawsuit brought this e-mail to light) pays for exclusives on their store. A fair few major developers only release through their own store. Cases that buck this trend (like Halo releasing on Steam) tends to be news rather than typical.
This doesn't really match what's happened with the PC gaming marketplace. Facebook pays for exclusives to the Oculus Store, Epic (whose lawsuit brought this e-mail to light) pays for exclusives on their store. A fair few major developers only release through their own store. Cases that buck this trend (like Halo releasing on Steam) tends to be news rather than typical.
Compared to the console market, availability across stores on PC is still generally better, and importantly, the barrier for consumers to buy games from multiple stores on PC is much lower than the barrier to buy a PS5/Switch exclusive game on a console that you don't own. That lack of platform control has also lead to an ecosystem of PC games that is pretty objectively more innovative and more expansive than the collection of games on any other tightly-managed competing platform.
The increasing trend of app stores on PC moving towards being silos is very worrying and harmful to consumers, but it's still a great deal better than what happens in competitive device-specific markets. Unless people like buying 3 separate gaming devices to get access to every console game that's released.
That many apps are available for both Android and iOS really has more to do with a lack of competition and a set of consumer expectations about availability than it has to do with platform management. There was a period where most PC games only released on Steam, too. But I personally enjoy being able to opt out of that store/DRM in favor of stores like Itch/GoG without losing access to every single new game that gets released. And I think my consumer choices have generally increased with the addition of newer storefronts that offer me different features that Steam refuses to offer.
It's easy to talk about the harms of fragmentation when you're happy with the status quo. But nobody who grew up protesting Steam's DRM is unhappy that more PC stores exist now, even if the market is more fragmented. And I similarly suspect that the people arguing that more choices on the iPhone would be bad for consumers are people who are happy with the app selection already, they're probably not the people who are frustrated that apps like NewPipe, Firefox, or emulators can only be accessed by moving to a completely separate ecosystem and buying a new device.
The increasing trend of app stores on PC moving towards being silos is very worrying and harmful to consumers, but it's still a great deal better than what happens in competitive device-specific markets. Unless people like buying 3 separate gaming devices to get access to every console game that's released.
That many apps are available for both Android and iOS really has more to do with a lack of competition and a set of consumer expectations about availability than it has to do with platform management. There was a period where most PC games only released on Steam, too. But I personally enjoy being able to opt out of that store/DRM in favor of stores like Itch/GoG without losing access to every single new game that gets released. And I think my consumer choices have generally increased with the addition of newer storefronts that offer me different features that Steam refuses to offer.
It's easy to talk about the harms of fragmentation when you're happy with the status quo. But nobody who grew up protesting Steam's DRM is unhappy that more PC stores exist now, even if the market is more fragmented. And I similarly suspect that the people arguing that more choices on the iPhone would be bad for consumers are people who are happy with the app selection already, they're probably not the people who are frustrated that apps like NewPipe, Firefox, or emulators can only be accessed by moving to a completely separate ecosystem and buying a new device.
> The "platform game" establishes market power, where buyers and sellers need to go through you.
So we have to get a law against a "monopoly that arises after you've bought a product".
So we have to get a law against a "monopoly that arises after you've bought a product".
You said it's naive but didn't actually present a reasonable alternative.
Sorry. Poor choice of words.
Alternative to what? A law that says apple must allow alternative App Stores? I'm ok with that, and it might be useful to some people. I just don't think it will affect the market much.
The App Store "market" is not going to become a competitive market with a quick fix like that. Any solution that does make it a competitive market also tanks the business model. 30% to deliver an app is many times what a competitive rate would be. The competitive rate might be 0. We didn't have app stores before app stores.
Any kind of antitrust effort would need to start from the understanding that this is not a competitive market. Apple has all the power. A few app devs have the leverage to negotiate and everyone else is a price taker. You could "solve" it by regulating prices, enforcing a single price or otherwise limiting apple's choices directly. Or... you could leave it as is, which is (IMO) about the same as ruling that they must allow side loading or alternative app stores.
Similarly, it will be very hard to limit fb from making their app addictive, shrill or other such problems. Their incentives are very strongly tied to these.
Alternative to what? A law that says apple must allow alternative App Stores? I'm ok with that, and it might be useful to some people. I just don't think it will affect the market much.
The App Store "market" is not going to become a competitive market with a quick fix like that. Any solution that does make it a competitive market also tanks the business model. 30% to deliver an app is many times what a competitive rate would be. The competitive rate might be 0. We didn't have app stores before app stores.
Any kind of antitrust effort would need to start from the understanding that this is not a competitive market. Apple has all the power. A few app devs have the leverage to negotiate and everyone else is a price taker. You could "solve" it by regulating prices, enforcing a single price or otherwise limiting apple's choices directly. Or... you could leave it as is, which is (IMO) about the same as ruling that they must allow side loading or alternative app stores.
Similarly, it will be very hard to limit fb from making their app addictive, shrill or other such problems. Their incentives are very strongly tied to these.
> I just don't think it will affect the market much.
In a weird way, I think Apple and Google proved it would have significant impact, at least enough for them to put sizable effort in stopping it from happening.
Otherwise Apple wouldn't be fighting tooth and nails to keep it at bay. Google also went pretty great length, through bundled contracts, backroom deals and scaremongering to dissuade partners and users from choosing the alternative means that are available.
From the "follow the money" perspective, it seems there's hope in that corner.
In a weird way, I think Apple and Google proved it would have significant impact, at least enough for them to put sizable effort in stopping it from happening.
Otherwise Apple wouldn't be fighting tooth and nails to keep it at bay. Google also went pretty great length, through bundled contracts, backroom deals and scaremongering to dissuade partners and users from choosing the alternative means that are available.
From the "follow the money" perspective, it seems there's hope in that corner.
proves it both ways, does it not?
I mean, I agree that if Apple abandoned trying to control app delivery it would be a big deal. I just don't think a simple rule gets us there.
I mean, I agree that if Apple abandoned trying to control app delivery it would be a big deal. I just don't think a simple rule gets us there.
I think it’s reasonable to expect a lot of people to follow Netflix outside of the App Store. Therefore Apple would have to make an offer that is competitive enough for them to stay. I would argue that’s fair competition. Unlike their current highway robbery approach (in German we have the word wegelagerei, which was medieval toll extortion on unavoidable roadways, a better fitting term in my opinion)
I don't understand where you're going.
Obviously Netflix would have more negotiating power if there were more alternatives. Netflix has enough leverage with Apple now that they pay half what regular developers pay. The dynamics play strongly in Apple's favour. 15% (or 30% for shmoes) may be a large slice. But even if the alternative app store is free for developers,
In any case, I'm not arguing that a competitive market would not be better. I'm arguing that it takes more than a minor rule to get there. The dynamics play strongly in the platform's favour. 15% (or 30% for shmoes) may be a large slice. But, unless you take the vast majority of users with you, that will add up to less revenue.
There just isn't a whole lot of middle ground, compatibility between a world with competitive dynamic and play store's business model. To the extent that a law would be successful in creating competition, the play store business model fails. It's premised on monopolism, more or less. I mean, payment processing and such obviously exist outside of a captive market... but in a competitive market, rates probably resolve to <50% of the current rate.
Obviously Netflix would have more negotiating power if there were more alternatives. Netflix has enough leverage with Apple now that they pay half what regular developers pay. The dynamics play strongly in Apple's favour. 15% (or 30% for shmoes) may be a large slice. But even if the alternative app store is free for developers,
In any case, I'm not arguing that a competitive market would not be better. I'm arguing that it takes more than a minor rule to get there. The dynamics play strongly in the platform's favour. 15% (or 30% for shmoes) may be a large slice. But, unless you take the vast majority of users with you, that will add up to less revenue.
There just isn't a whole lot of middle ground, compatibility between a world with competitive dynamic and play store's business model. To the extent that a law would be successful in creating competition, the play store business model fails. It's premised on monopolism, more or less. I mean, payment processing and such obviously exist outside of a captive market... but in a competitive market, rates probably resolve to <50% of the current rate.
emsy's claim was that Apple's App Store doing something bad isn't a problem, but rather that the only problem is that there aren't other app stores on the iPhone. The "alternative" is that, no, it's actually a problem that Apple's App Store is doing something bad.
Disclaimer: this is from memory
You could submit paid products to default Cydia repositories, where you personally handled payments. There was no commission in such scenarios. If you opted for payments to be handled by SaurikIT, a 30% fee was in place.
Cydia had special deals in place for Intelliborn products, I dont think this extended to other groups. Intelliborn previously operated Rock Your iPhone, which was acquired by Cydia and this was a negotiated term.
You could submit paid products to default Cydia repositories, where you personally handled payments. There was no commission in such scenarios. If you opted for payments to be handled by SaurikIT, a 30% fee was in place.
Cydia had special deals in place for Intelliborn products, I dont think this extended to other groups. Intelliborn previously operated Rock Your iPhone, which was acquired by Cydia and this was a negotiated term.
I also had special deals in place for various other developers. The deal with Intelliborn was especially "at cost", but I also did deals with anyone who seemed to have leverage or whom I simply felt a need to motivate. In one interesting case I actually took a larger cut than 30% in exchange for extremely pervasive cross-promotional advertising, though you could argue that was simply a separate service "on top" of the payment processing.
https://news.ycombinator.com/item?id=27615663 <- some commentary I wrote about Apple's negotiating position with respect to the 15% discounts for anti-bulk sales (which is weirdly backwards) where I touch on special deals (and tie in how Intelliborn's special deal was in some sense due to store competition).
https://news.ycombinator.com/item?id=27615663 <- some commentary I wrote about Apple's negotiating position with respect to the 15% discounts for anti-bulk sales (which is weirdly backwards) where I touch on special deals (and tie in how Intelliborn's special deal was in some sense due to store competition).
Users know they're buying into a closed garden when they buy the product. It's a feature, not a bug. If people wanted alternative app stores, they'd buy Android or Linux devices.
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.
> “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.
I led engineering for a product in a similar position. Short answer is that it's about who owns the consumer. When you relinquish control of the browse experience, you lose the ability to control where your users go.
For example, say Netflix allowed access and their customers got used to going to the TV app instead of the Netflix app, then Apple over time decides to feature Netflix content less and less over their own offerings or deprioritizing Netflix content in search results. They could slowly bleed Netflix's customers away. They'd also have detailed data on what Netflix content users watched.
In general, I'm with Netflix on this one considering how many businesses Apple has screwed over throughout the years when they choose to compete directly.
For example, say Netflix allowed access and their customers got used to going to the TV app instead of the Netflix app, then Apple over time decides to feature Netflix content less and less over their own offerings or deprioritizing Netflix content in search results. They could slowly bleed Netflix's customers away. They'd also have detailed data on what Netflix content users watched.
In general, I'm with Netflix on this one considering how many businesses Apple has screwed over throughout the years when they choose to compete directly.
Since picking up an Apple TV, my Netflix consumption is down to zero. Everything else is right there in the main UI, and it provides zero incentive for me to open their app.
At least from my perspective, Netflix really dropped the ball on this decision.
At least from my perspective, Netflix really dropped the ball on this decision.
I believe this is helping illustrate why Netflix made this decision.
Sure, right now they'll lose a few people like you who cbf switching apps to see what's on Netflix - but they're banking that there's a lot more who will resign themselves to switching apps for the show they want, because they're used to finding their Netflix shows in the Netflix app anyway.
Whereas if they join TV App, they'll be training their users to find their content in TV App - which gives Apple a lot of leverage. Now a threat to kick them out of TV App has teeth - because there will be a lot more users like you, who've grown accustomed to finding their Netflix shows in TV App, and won't know to go switching apps to find it.
They don't want to hand Apple a club to beat them with.
Sure, right now they'll lose a few people like you who cbf switching apps to see what's on Netflix - but they're banking that there's a lot more who will resign themselves to switching apps for the show they want, because they're used to finding their Netflix shows in the Netflix app anyway.
Whereas if they join TV App, they'll be training their users to find their content in TV App - which gives Apple a lot of leverage. Now a threat to kick them out of TV App has teeth - because there will be a lot more users like you, who've grown accustomed to finding their Netflix shows in TV App, and won't know to go switching apps to find it.
They don't want to hand Apple a club to beat them with.
Netflix doesn’t want their content to show up in apple TV search because they don’t want to give access to their user’s data to Apple. It’s a terrible anti-consumer decision and frankly it was one of the last straws that led me back to piracy after many years. All I wanted was a universal search for content instead of having to go into each provider’s app.
I am now using Plex/Sonarr/Radarr and it works flawlessly, a much better ecosystem with open APIs and tons of integrations with tvdb/discord/trakt/opensubtitles etc. Netflix had a good thing going on for a while but they managed to screw it up.
I am now using Plex/Sonarr/Radarr and it works flawlessly, a much better ecosystem with open APIs and tons of integrations with tvdb/discord/trakt/opensubtitles etc. Netflix had a good thing going on for a while but they managed to screw it up.
I think it's more than that - if users are finding shows through the Apple TV search then Apple is able to promote their own shows and services in that search functionality. Netflix wants people to use their app so they can push their own content and features.
Similar to why Amazon doesn't like it when you Google for products and end up at Amazon, they would rather you just visit amazon.com and search from there so they can show you ads.
Similar to why Amazon doesn't like it when you Google for products and end up at Amazon, they would rather you just visit amazon.com and search from there so they can show you ads.
The argument is more nuanced than that. For example if I tell my TV “Hey Siri, play Top Gear” it will show me an Amazon logo for a few seconds while the app starts and then the video plays. At no point in that interaction did Apple attempt or even have a chance to say “are you sure you don’t want to watch {other-car-show}”. This decision by Netflix is hurting consumers.
Apple, refusing to share their user data with others: "Great. Pro privacy. Pro user."
Netflix, refusing to share their user data with Apple: "Terrible. Anti-consumer. Last straw."
Netflix, refusing to share their user data with Apple: "Terrible. Anti-consumer. Last straw."
It’s not sharing. It’s just making it searchable - aka the catalog and link back. The second feature is the ability to continue/resume from the Home Screen. That requires sharing playback information.
However, there’s no indication that Apple mines this information. On the other hand, it’s extremely useful to me as a user. This is the primary reason I don’t use Netflix much these days and I have a premium subscription. It’s so easy for me to reach to HBO Max or Hulu than Netflix.
I'm not quite sure this is the case, given that Netflix seems happy to share that data with Google on AndroidTV/GoogleTV devices.
The thing that's lead me back to piracy is not Netflix itself, but the proliferation of streaming providers, with their exclusives. Let me pay for the show I want, easily, and I'll pay for it. Make me jump through hoops and subscribe to services I don't want, well, it's just as easy to torrent it. Netflix didn't screw this up; it was every studio wanting to lock viewers into their own service.
The thing that's lead me back to piracy is not Netflix itself, but the proliferation of streaming providers, with their exclusives. Let me pay for the show I want, easily, and I'll pay for it. Make me jump through hoops and subscribe to services I don't want, well, it's just as easy to torrent it. Netflix didn't screw this up; it was every studio wanting to lock viewers into their own service.
With the flood of medium quality content coming from Netflix in the past few years I'm almost happy with it not showing up.
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.
The Video Partner Program which takes 15% went into effect in 2016.
>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.”
>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.”
> Apple CEO Tim Cook defended the company’s App Store commission structure in his sworn testimony before the House Antitrust Subcommittee on Wednesday.
> “We treat every developer the same. We have open and transparent rules,” Cook said, in his testimony. “It’s a rigorous process, because we care so deeply about privacy and security and quality. We do look at every app before it goes on,” he added.
Slightly different quote, added some context and here is a source too: https://techcrunch.com/2020/07/29/apples-app-store-commissio...
> “We treat every developer the same. We have open and transparent rules,” Cook said, in his testimony. “It’s a rigorous process, because we care so deeply about privacy and security and quality. We do look at every app before it goes on,” he added.
Slightly different quote, added some context and here is a source too: https://techcrunch.com/2020/07/29/apples-app-store-commissio...
You seem to have missed out the crucial piece on context from that source, in that it's talking explicitly about app review and not IAP commission.
Which also has special-case rules (or lack of enforcement thereof…)
This is glaringly evident at the very least in the way Apple and Google (don't) apply app store review to their own apps, so I don't understand why you're being downvoted.
FWIW I think Apple's apps do actually go through review, but the issues that crop up (non-public API usage, etc.) get swept under the rug (don't quote me on that though). Similar to how third parties blessed for private API usage probably get their apps through review.
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Isn't complying with IAP rules part of app review?
The amount of commission that Apple receives from an IAP isn't something that's in the code for an app. It's not something that could be part of the app review process. It's an arrangement between Apple and the developer.
The app review processes explicitly are testing the backend components for compliance as well.
The Fortnite app behind the lawsuit that we got these docs from was explicitly taken down for failing app review by not complying with IAP guidelines.
The Fortnite app behind the lawsuit that we got these docs from was explicitly taken down for failing app review by not complying with IAP guidelines.
To be fair, from the third email it's clear they meant for Netflix to be treated as everyone else (after they figured the rules for the program they mention), eliminating this special treatment.
In my personal belief, Cook would've won more by admitting they may have some exceptions, but actively try to get rid of those. It's arguable of course, but it the email he justifies it by end-user interests and he probably means it. That's just real-world realities - that exceptions happen even with the principled people, just because things are never white-and-black.
Instead, he told a lie how they're holier than the Pope. Even if he believes in that and genuinely wants things to be that way, he surely knew it's not the reality.
And I just wonder why. I don't have any knowledge how things work at those levels, but my very naive risk analysis is that if there's any serious investigation there are significant chances such lie would be uncovered, and legal and PR consequences of that would be harsher than admittance, especially with justifications.
In my personal belief, Cook would've won more by admitting they may have some exceptions, but actively try to get rid of those. It's arguable of course, but it the email he justifies it by end-user interests and he probably means it. That's just real-world realities - that exceptions happen even with the principled people, just because things are never white-and-black.
Instead, he told a lie how they're holier than the Pope. Even if he believes in that and genuinely wants things to be that way, he surely knew it's not the reality.
And I just wonder why. I don't have any knowledge how things work at those levels, but my very naive risk analysis is that if there's any serious investigation there are significant chances such lie would be uncovered, and legal and PR consequences of that would be harsher than admittance, especially with justifications.
> It's arguable of course, but it the email he justifies it by end-user interests and he probably means it.
Perhaps I’m just cynical but I can’t help but think all of the Apple execs have had “best for the consumer” drilled into them for the purposes of the antitrust issues that are inevitably coming. If I were a shrewd Apple exec trying to posture against antitrust litigation and/or regulation I’d be sprinkling “best for the consumer” at every possible opportunity. Memos. Emails. Slide decks. Fucking everywhere. There’s no down side to mentioning it and a ton of upside if the document ever becomes public.
Perhaps I’m just cynical but I can’t help but think all of the Apple execs have had “best for the consumer” drilled into them for the purposes of the antitrust issues that are inevitably coming. If I were a shrewd Apple exec trying to posture against antitrust litigation and/or regulation I’d be sprinkling “best for the consumer” at every possible opportunity. Memos. Emails. Slide decks. Fucking everywhere. There’s no down side to mentioning it and a ton of upside if the document ever becomes public.
> I can’t help but think all of the Apple execs have had “best for the consumer” drilled into them for the purposes of the antitrust issues
Oh, I'm sure every talking head is trained for newspeak until they start to believe it.
Oh, I'm sure every talking head is trained for newspeak until they start to believe it.
Presumably any video platform could apply for the "Video Partner Program" mentioned in the email.
...which that email says in the very same sentence is different from the "unique arrangement" they have with Netflix.
They're unique arrangement with Netflix predates their Video Partner Program and probably some of their other app store rules:
Peter Stern:
"Longer Version: I explained that these IAP tests are not OK for Apple. Our commitment to developers and customers is to run the world's best App Store, and when Netflix is cycling in and out, they are undermining that. I also explained that we run a principled App Store, and they have a unique arrangement because it was struck before the existing Video Partner Program came into effect..."
Peter Stern:
"Longer Version: I explained that these IAP tests are not OK for Apple. Our commitment to developers and customers is to run the world's best App Store, and when Netflix is cycling in and out, they are undermining that. I also explained that we run a principled App Store, and they have a unique arrangement because it was struck before the existing Video Partner Program came into effect..."
[deleted]
What is the consequence of such a blatantly false testimony to Congress?
It's only blatantly false if you ignore the context that it was spoken in of talking about basic App review and not IAP commission. And plenty of wiggle room there, especially if the "same process applied to everyone" includes the stage "Have we negotiated a contract with them for an exception on this"
Not that I think that anything would happen if it were in the IAP context.
Not that I think that anything would happen if it were in the IAP context.
Err... even in that context, it's blatantly false.
https://web.archive.org/web/20210712060426/https://www.teleg...
https://web.archive.org/web/20210712060426/https://www.teleg...
"Law? What do I care about the law. Ain’t I got the power?” (attributed to Cornelius Vanderbilt https://en.wikipedia.org/wiki/Cornelius_Vanderbilt)
Your question made me think of that quote. There are technical answers to you question (that lying under oath is a crime), but the realist answer is, that unless Congress/executive has the will to enforce consequences, very little.
Your question made me think of that quote. There are technical answers to you question (that lying under oath is a crime), but the realist answer is, that unless Congress/executive has the will to enforce consequences, very little.
For your average Joe or the CEO of a trillion-dollar company?
Absolutely nothing.
Lying to Congress is a crime (distinct from perjury), but it's unusual for anyone to be tried for/convicted of it though. Michael Cohen, Trump's lawyer, is a (rare) recent example.
Cook was under oath, no? So as per my understanding, it is perjury on top of lying to congress. I am, however, not a lawyer.
Also you didn't read what Cook actually said in the preceding and following sentences.
Right, lying to Congress is a crime regardless of whether you're under oath, but if you're under oath and lie, it's both.
It depends on who your friends are. Compare Clapper and Flynn.
In practice? None whatsoever. Even under oath.
After all, Congress critters constantly lie or spout nonsense, why should we ask more of those before them?
In principle, it's a crime. But, nobody will do anything about it, especially when it comes to a powerful white man.
After all, Congress critters constantly lie or spout nonsense, why should we ask more of those before them?
In principle, it's a crime. But, nobody will do anything about it, especially when it comes to a powerful white man.
Ironically, it's both common knowledge and trivially verifiable. I'm not sure how this is a "debated" topic.
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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.
Luke LaFreniere has publicly stated that App Review basically refused to even entertain a Floatplane "reader app" for months, until they were able to appeal to someone who actually understood Apple's rules. They were getting absolutely nonsensical rejections that either didn't make sense or didn't account for the whole "reader app" thing.
What's a "reader app"?
An app designed for getting a user's previously purchased content (i.e. the Kindle app). They are exempted from certain App Store guidelines around account management and in-app purchases.
https://developer.apple.com/app-store/review/guidelines/#rea...
https://developer.apple.com/app-store/review/guidelines/#rea...
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).
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).
The Netflix app is especially bad about this. At least on my prior-gen 4K ATV, do a search in the Netflix app and you'll never get out of the search menu. Menu button does nothing, select one of the items in search does nothing because as soon as you Menu out of it, you're back to the unescapable search screen. The only way out is to kill the Netflix app. (This might have been fixed, haven't watched anything on Netflix in a while. Definitely repro'ed a month ago.)
And, BTW, you might not need to reboot to escape a lockup. I don't have an ATV on and accessible, but I'm pretty sure you double-tap the TV/Home button that brings up an Alt-Tab-like view of your running apps. Swipe or arrow left or right to the problem app, swipe up to kill it. It's what I do with the Netflix app way too often, like when I used the search functionality. :-)
And, BTW, you might not need to reboot to escape a lockup. I don't have an ATV on and accessible, but I'm pretty sure you double-tap the TV/Home button that brings up an Alt-Tab-like view of your running apps. Swipe or arrow left or right to the problem app, swipe up to kill it. It's what I do with the Netflix app way too often, like when I used the search functionality. :-)
I simply want Netflix results to be included in the main AppleTV search.
I have seen some results give an “Open In” choice for Netflix, but selecting that simply opens the Netflix app at the “Home” screen. It’s also quite rare. I think I have only encountered ite once or twice.
Most results for movies and shows that are only available in Netflix, come up as “Rent or Buy.”
Shows and movies exclusive to Netflix don’t show up in AppleTV searches.
I also prefer the AppleTV “Details” screen, but even there, when reviewing a certain actor, the displayed “filmography” is really strange; often missing some major roles.
Sometimes, headline actors are missing from a show’s cast, in “Details.”
It seems like legal issues, but it is so random, that I suspect technical reasons.
I have seen some results give an “Open In” choice for Netflix, but selecting that simply opens the Netflix app at the “Home” screen. It’s also quite rare. I think I have only encountered ite once or twice.
Most results for movies and shows that are only available in Netflix, come up as “Rent or Buy.”
Shows and movies exclusive to Netflix don’t show up in AppleTV searches.
I also prefer the AppleTV “Details” screen, but even there, when reviewing a certain actor, the displayed “filmography” is really strange; often missing some major roles.
Sometimes, headline actors are missing from a show’s cast, in “Details.”
It seems like legal issues, but it is so random, that I suspect technical reasons.
It seems like legal issues
I saw some blurb when Apple was introducing "Up Next", or whatever that ATV integration is, and Netflix reportedly was having no part of it. So I imagine that whatever drives that whole integration probably drives search and other details.
Regardless of the cause, I'm with you. I watch less Netflix as a result, too.
I saw some blurb when Apple was introducing "Up Next", or whatever that ATV integration is, and Netflix reportedly was having no part of it. So I imagine that whatever drives that whole integration probably drives search and other details.
Regardless of the cause, I'm with you. I watch less Netflix as a result, too.
I've never rebooted my AppleTV aside from updates. Double click the home button on the remote and swipe up to kill an app.
Thanks for the tip!
Yeah, apps hang all the time. They don't crash, per se, but you can't break out of the screen they are presenting.
Yeah, apps hang all the time. They don't crash, per se, but you can't break out of the screen they are presenting.
I have the same issues on xbox with an order of magnitude more powerful hardware. Don't think its apples fault. When you think about it these companies don't have any incentive not to offer crapware software, since they compete with eachother on catalogue rather than ux which is 'good enough.'
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?
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?
There were a number of issues. My understanding is that Netflix was not paying 30% but rather was paying 15% due to their special agreement with Apple. According to the emails, it was Apple's refusal to go below 15% that triggered Netflix to begin testing not allowing payment via IAP. The "voluntary churn", "promotion coordination" and "revenue sharing" offers are from Apple trying to sweeten the pot to keep Netlfix from dumping IAP completely.
In other words, Netflix is harder to cancel directly than through Apple's subscription UI.
As is the case for virtually every dark pattern subscription (most of them) when not through Apple.
This isn't a problem, it's a benefit -- from customer point of view.
Apple makes a customer-friendly rather than seller friendly subscription UI, the reason I won't subscribe to things any more except through Apple.
It's genuinely surprising to me the proportion of customer hostile rhetoric on this topic.
As is the case for virtually every dark pattern subscription (most of them) when not through Apple.
This isn't a problem, it's a benefit -- from customer point of view.
Apple makes a customer-friendly rather than seller friendly subscription UI, the reason I won't subscribe to things any more except through Apple.
It's genuinely surprising to me the proportion of customer hostile rhetoric on this topic.
Netflix is very easy to cancel, though? There's a big honking "cancel membership" button on the top level account settings page. It's actually more prominent than other entries on the page.
http://imgur.com/a/09XZ9jb
Also very easy to change your plan level up or down.
http://imgur.com/a/09XZ9jb
Also very easy to change your plan level up or down.
Yeah, I would guess that the important difference is that Apple emails a receipt for all subscriptions every month, making it much less likely that someone forgets about their subscription when they no longer regularly use it.
Netflix auto-cancels inactive accounts, granted it's after 2 years (>$250 in the American market).
https://about.netflix.com/en/news/helping-members-who-havent...
https://about.netflix.com/en/news/helping-members-who-havent...
Apple is pretty dark-patterny about the subscriptions too. On Android the refund/uninstall button is right next to the open button in the Play store. You buy an app, don't like it, click a button and return it.
I just bought an iPad app the other day (my first), it didn't meet my needs, but I still can't figure out where to go to refund it. And Apple's subscriptions expire immediately if you cancel during a free trial, whereas the Google ones will still let you finish the term of your trial.
Apple's not really the good guy either. They're just the powerful ones.
I just bought an iPad app the other day (my first), it didn't meet my needs, but I still can't figure out where to go to refund it. And Apple's subscriptions expire immediately if you cancel during a free trial, whereas the Google ones will still let you finish the term of your trial.
Apple's not really the good guy either. They're just the powerful ones.
> And Apple's subscriptions expire immediately if you cancel during a free trial, whereas the Google ones will still let you finish the term of your trial.
Amusingly, this is only the case for Apple's first-party subscriptions. Third-party IAP subscriptions for which you are in the free trial when you cancel will continue to provide "access" until the trial period concludes.
Amusingly, this is only the case for Apple's first-party subscriptions. Third-party IAP subscriptions for which you are in the free trial when you cancel will continue to provide "access" until the trial period concludes.
It’s way easier to cancel Netflix via Netflix than the App Store though.
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.
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.
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.
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.
The article says the Apple/Netflix agreement DID follow older rules, before current App Store rules?
It's about extending the agreement despite the rules being different now. It's also not good that they mention the Apple TV app in the same email, because it acknowledges they know they're competing with Netflix and it has bearing on their special treatment with a competitor.
Isn't the "unique arrangement" just its age, predating the modern App Store?
That seems to undermine their "everyone is treated equally" argument.
This is an example of the "special friend" technique harmful platforms make use of (slide 40):
https://www.slideshare.net/danctheduck/gdc-2011-game-of-plat...
"First you sign long-term contracts with certain influential developers"
https://www.slideshare.net/danctheduck/gdc-2011-game-of-plat...
"First you sign long-term contracts with certain influential developers"
[deleted]
[deleted]
The same deal is available for everyone though.
https://developer.apple.com/programs/video-partner/
https://developer.apple.com/programs/video-partner/
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?
Why should it be a surprise that a partner in a stronger negotiating position negotiates a better deal than is offered at the door?
It’s amusing that this quote has inflated like most things today. Original quote was (“If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.”)
79/39 split is indeed unique
Both Apple and MS are despicable.
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.
Not just destroy, destroy and steal too. Because why not.
https://www.theverge.com/2021/9/16/22676706/apple-watch-swip...
https://www.theverge.com/2021/9/16/22676706/apple-watch-swip...
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.)
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.)
From February this year - Apple App store is home to multi-million dollar scams. The method the guy used to find this is so childish it's a wonder how Apple could have missed. Also Apple employs some dark patterns if you wanna report scams.
https://www.theverge.com/2021/2/8/22272849/apple-app-store-s...
https://www.theverge.com/2021/2/8/22272849/apple-app-store-s...
You don’t think the security/trust argument has any merit?
Obviously not the OP, but figured I'll give my unsolicited opinion anyway.
I think there's "merit" to it, in that the logic holds: if we restrict the apps in an app store to be selected by a trusted entity then we can more likely trust the app. This computes, I think it's reasonable enough logic, but we could extend this further to something farcical too: I could make my phone "unhackable" and "more secure" by throwing it into a wood chipper. It would be impossible to hack, there's virtually no chance of my personal details leaking because of it, but of course I lose access to features of the phone (or in this case the entire phone itself). A corporation (or any large entity) will always be able to justify a restriction as a means of "increased security". Security vulnerabilities will almost always come from being able to actually use a computer as a computer.
This wouldn't inherently be a problem if it weren't for the fact that there are plenty of things things that are perfectly legal, but Apple won't approve, presumably out of fears of legal headaches, like video game console emulators.
My "solution" to approximate something decent would be to do something more or less akin to what macOS does. By default, don't allow any sideloading and only allow things to be installed via the App Store. If one would like to install something outside of the app store, they must (on a per-app basis) go into the security settings and allow things. This would still give preferential treatment to the App Store, but would allow people who know what they're doing to go around this.
NOTE: I'm aware of the self-signing AltStore thing, and it's definitely a step in the right direction, if still a bigger pain in the ass than it should be.
I think there's "merit" to it, in that the logic holds: if we restrict the apps in an app store to be selected by a trusted entity then we can more likely trust the app. This computes, I think it's reasonable enough logic, but we could extend this further to something farcical too: I could make my phone "unhackable" and "more secure" by throwing it into a wood chipper. It would be impossible to hack, there's virtually no chance of my personal details leaking because of it, but of course I lose access to features of the phone (or in this case the entire phone itself). A corporation (or any large entity) will always be able to justify a restriction as a means of "increased security". Security vulnerabilities will almost always come from being able to actually use a computer as a computer.
This wouldn't inherently be a problem if it weren't for the fact that there are plenty of things things that are perfectly legal, but Apple won't approve, presumably out of fears of legal headaches, like video game console emulators.
My "solution" to approximate something decent would be to do something more or less akin to what macOS does. By default, don't allow any sideloading and only allow things to be installed via the App Store. If one would like to install something outside of the app store, they must (on a per-app basis) go into the security settings and allow things. This would still give preferential treatment to the App Store, but would allow people who know what they're doing to go around this.
NOTE: I'm aware of the self-signing AltStore thing, and it's definitely a step in the right direction, if still a bigger pain in the ass than it should be.
There is a definitely a benefit in terms of trust and security, though not fool proof.
However, when you force companies to only signup and accept payment through your payment gateway instead of giving customers the option, and then unequally applying rules and colluding with other companies you start to get in trouble in regards to monopolistic practices.
However, when you force companies to only signup and accept payment through your payment gateway instead of giving customers the option, and then unequally applying rules and colluding with other companies you start to get in trouble in regards to monopolistic practices.
Nitpick: developers aren't required by Apple to restrict payment to only go through the App Store / Apple Pay. They're just required to take an equivalent App Store levy out of whatever gross they're making, regardless of what payment processor they use, and hand that levy to Apple.
For example, there's no TOS requirement preventing Amazon from having been selling Kindle books through its iOS Kindle app this whole time, and charging those sales through the user's Amazon payment processing as per usual. The only TOS requirement is that they would have just had to take 30% off the top of those sales for Apple. Amazon doesn't want to do this (and perhaps would have negative margins if they did), so instead they have decided to not have any kind of store view in the iOS Kindle app, and instead to just tell iOS Kindle users to go to the Amazon website to shop for Kindle books.
For example, there's no TOS requirement preventing Amazon from having been selling Kindle books through its iOS Kindle app this whole time, and charging those sales through the user's Amazon payment processing as per usual. The only TOS requirement is that they would have just had to take 30% off the top of those sales for Apple. Amazon doesn't want to do this (and perhaps would have negative margins if they did), so instead they have decided to not have any kind of store view in the iOS Kindle app, and instead to just tell iOS Kindle users to go to the Amazon website to shop for Kindle books.
It has some merits, but not worth enough to justify 30% tax. Perhaps 10% would be acceptable. 5% can make a good case for Apple.
lip service.
Trust and security don't mean much when apps have unfettered internet access. You cannot find who the app is contacting, how often and what is sent. You also have no ability to filter or block the contact. *
* there are minor hacks.
Trust and security don't mean much when apps have unfettered internet access. You cannot find who the app is contacting, how often and what is sent. You also have no ability to filter or block the contact. *
* there are minor hacks.
I trust my own judgement, thank you very much. I don't need Big Daddy Apple making all my decisions for me.
Also, that has absolutely nothing to do with banning third party payment processors for IAPs. That is just criminal, or well, it should be.
Also, that has absolutely nothing to do with banning third party payment processors for IAPs. That is just criminal, or well, it should be.
>Also, that has absolutely nothing to do with banning third party payment processors for IAPs. That is just criminal, or well, it should be.
I find this sentiment interesting vs the juxtaposition that Netflix wanted off of IAP because Apple makes it too easy to cancel your subscription.
I've always viewed the current tension over the App Store not to be Apple vs. Users, but Apple vs. Scumbag Developers
I find this sentiment interesting vs the juxtaposition that Netflix wanted off of IAP because Apple makes it too easy to cancel your subscription.
I've always viewed the current tension over the App Store not to be Apple vs. Users, but Apple vs. Scumbag Developers
The device performs involuntary "CSAM" scans (where "CSAM" means whatever any given nation's intelligence apparatus doesn't like). If you don't believe it, just look to what they've done to their customers in non-US regions. Or that Mac phones home about what programs you run.
App review is meant to enforce Apple's payment rules as much as anything. They don't and can't catch everything.
Strong sandboxing, granular permissions, and remote kill switch (that can be disabled) can do effectively the same job. It just won't earn Apple gobs of racketeering money.
App review is meant to enforce Apple's payment rules as much as anything. They don't and can't catch everything.
Strong sandboxing, granular permissions, and remote kill switch (that can be disabled) can do effectively the same job. It just won't earn Apple gobs of racketeering money.
> (Please don't rehash the video game console argument.)
Why not?
Why not?
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.