Why Apple Never Even Dreamed of Buying Netflix

The launching point for this week’s Particle Debris is a fascinating article at Vanity Fair. (The Netflix part comes soon.)

Apple TV Is Just A Hobby”: How An Argument With Steve Jobs Explains The Future Of Apple

Apple co-founder Steve Jobs
Steve Jobs

The article starts with a fascinating story about the author’s encounter with Steve Jobs.

“In 2007, you unveiled the Apple TV, and while you were sitting on stage, you described Apple’s core businesses as a three-legged stool,” I said to Jobs. “You said you hoped Apple TV would be the fourth leg of that stool. Yet, three years later, Apple TV sales are paltry. Did you get it wrong?” Jobs dismissively denied—in front of the top editors at the paper—that he had ever said that. I began to push back, but Jobs interrupted me. “Nick, I did not say that.” He was emphatic.

But Steve Jobs did say that. It just goes to show how the mind of some leaders works. That part is worth the read.

But then author Bilton makes a major mistake. He writes:

If you’re Apple, with $250 billion in the bank, and you’re really truly trying to go after this space, why not spend ten times that on content? Why not buy Netflix? Why stick your toe in the water when you could jump in and make the biggest fucking splash imaginable?

Not really.

It’s almost as if he didn’t even watch the Apple event. I say that because Apple thoroughly explained its entire Apple TV+ content strategy for all the world to see.

  1. Inspiration
  2. Quality
  3. Great story telling
  4. Stories that can change the world
  5. Respect for diversity, inclusion

While some content at Netflix can claim some of those factors, it’s not a pervasive theme at Netflix. At Apple, it will be. For Apple to buy Netflix would be like Nordstroms buying K-Mart. It’s just not the corporate brand.

So let’s drop the “Apple coulda bought Netflix” mantra and start to embrace what Apple is trying to achieve. Making the world a better place.

More Debris

• A big name company who should have the sense to remain trustworthy has gone astray. “FTC fines Office Depot $25 million for bogus virus scans.” As brick-and-mortar outfits become more and more distressed, the temptation of some incremental revenue will be hard to resist. Watch that space.

Apple Card
Apple Card

• Meanwhile, Apple always seems to figure out ways to make money by delighting us and simultaneously protecting us. Ben Lovejoy at 9to5Mac writes: “How Apple will make money from the Apple Card – and the ways it will save money.

• Artificial Intelligence brings forth all kinds of ethical questions. Here’s a glimpse into a recent summit. “Ethical question takes center stage at Silicon Valley summit on artificial intelligence.

• Now that Apple is working to get Apple TV+ on as many platforms as possible, starting with Roku and Amazon Fire TV, is the Apple TV hardware dead? Some have expressed this view, but that’s likely wrong. The very experienced David Katzmaier explores: “Will Apple’s TV app on Roku, Fire TV and Samsung kill the Apple TV box?” The subtitle provides a hint. “Or just make it stronger?”

Apple TV 4K
Just getting stronger.

For more color on this, see: “Apple TV isn’t dying, it’s more vital then ever.”

For one thing, the Apple TV 4K is more powerful than any other streaming box on the market, and while that might not seem to matter much, it does allow for some neat features you won’t find on Roku players or Fire TV Sticks. … And alongside Amazon’s Fire TV 4K, it’s one of the only devices to support both Dolby Vision HDR and Dolby Atmos surround sound.

• The original AirPods have a W1 chip. The new AirPods 2 have an H1 chip. What’s the difference? At iMore , Joseph Keller explains. “What’s the difference between Apple’s W1 chip and H1 chip?

• Finally, for some comic relief, we end with this. “Two-thirds of all Android antivirus apps are frauds.” Aren’t you glad you live in the Apple universe?

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Particle Debris is a generally a mix of John Martellaro’s observations and opinions about a standout event or article(s) of the week followed by a discussion of articles that didn’t make the TMO headlines, the technical news debris. The column is published most every Friday except for holiday weeks.

8 thoughts on “Why Apple Never Even Dreamed of Buying Netflix

  • Netflix is on a decline and Steve Jobs knew it. It’s not the best service to stream movies out there. Apps like Cinema HD, Mobdro, and other similar streaming services are taking over the premium ones.

  • Dream TV in the realm of APK is a generally new application choice on a home screen of DREAM TV to introduce on flame stick Go to the correct side of the window and open the envelope Download.

  • Well, la-ti-da. Netflix is just K-Mart and Apple is Nordstroms. I guess you mean overpriced on everything. Installed user base is another matter. Steve Jobs claimed to have cracked the code for TV but then the company went into long-term deep hibernation with an insanely great solution to TV. Meanwhile, Netflix ate its lunch and captured the first-mover advantage. Hiring over-the-hill Oprah and Spielberg won’t be the pixie dust required for slaying Goliath. Hubris is Apple’s worst enemy.

  • John:

    If there is any one theme that underlies your PD selections this week, it is ‘uncertainty’; whether it is Bilton’s thesis that if Apple want to make a big splash into streaming TV then they should simply buy Netflix rather than risk rolling their own content; Lovejoy’s piece on how (and therefore whether) Apple can make money on their credit card service; Katzmaier‘s exploration of whether or not Apple’s gamble of porting of their AppleTV+ service to as many platforms as possible is a hardware ELE (extinction level event), might commit the service to an evolutionary dead end or be a brilliant bottleneck escape to Darwinian dominance, as Newman’s article would support; attempts at finding the right balance between not simply ethics and the rollout of AI, but providing an individual consumer benefit vs an authoritarian tool that might quash individual liberties; and even the credibility and reliability of antivirus services and apps preferred by either major companies or disparate apps on a major platform – all underscore the widespread and shared uncertainty in both the industry and consumer communities on the continued rapid evolution and rollout of services and their value proposition in terms of risks or benefits and the odds of success to industry and consumer alike.

    Social scientists have repeatedly told us, with ample empirical evidence, that as a species we dislike uncertainty. There are several reasons for this, but two are relevant to your PD. For one, we are terrible at estimating uncertainty, both relative risk and absolute risk. Indeed, rather than incorporating empirical evidence into a realistic risk assessment in daily life, we measure risk according to familiarity; assigning lower risk to everyday exposures, even when those risks are great, and extreme risk to infrequent or unfamiliar risks, even when those costs at population level are small. We are hardwired to be parochial, to be creatures of our immediate environment, after all, that’s where we live. A second reason why we dislike uncertainty is that it represents a survival threat, particularly when we are compelled to make a decision with limited information. Will that decision lead us to survive, thrive or perish? We loathe being compelled to leave the comfort of the known for uncertainty and the unknown; and nothing, including a refusal to make a choice, can eliminate that risk.

    A couple of observations, and then a summary, excluding AI this time, as it is complex and we’ve discussed this many times.

    Bilton suggests that Apple are gambling badly by not buying Netflix and using that as their foray into streaming TV content. If we take Tim Cook and Apple’s recent presentation, no less than Apple’s historic comments at face value, then there could not be a worse pairing than Apple and Netflix. Yes, Netflix has a robust streaming service, including award winning content, but these two companies are not in the same business. Apple’s articulation of inspiration, quality, great story telling, stories that can change the world and respect for diversity and inclusion, while not a strategy, is a statement of objectives. These comprise the outcome of Apple’s product development and the social impact they seek.

    There is a valid question regarding whether or not there is a market for these objectives. Apple apparently think there is. We also have data regarding the appetite for inspirational and inclusive content; be it biographies, super heroes, diversity in people, places and cultures – as evidenced by this year’s awarded cinema (Emmy’s, BAFTA, Oscars). Much will depend on delivery, however an increasingly diverse market with increasing purchasing power and social media voice interact with Apple’s willingness to supply in order to create an emerging market. Those are the objectives. Apple have hired proven talent. We will have to wait and assess the products.

    An even cursory examination of Netflix’s content, most of which is not original, reveal no such objectives. Their offerings are omnivorous and all over the map, including a fair amount of content that appeals to the lowest common denominator. Apple, to meet their objectives, would need to completely hollow out and resupply Netflix’s content and simply utilise their distribution network and installed base, were Apple to pursue their own objectives. Instead, Apple have opted for an alternative strategy – platform agnostic distribution. By enabling the widest possible distribution across platforms, Apple are leveraging their own substantial user base and that of their competitors for what they hope will be not simply novel but popular content. There is an internal consistency of objective here between novel content creation and a bid for widest possible distribution to maximise uptake and even profit.

    In summary, this comes down to the uncertainty proposition; ie what is the bet that Apple are making. Specifically, are Apple gambling on the services or a defined albeit unexpressed user demand, and therefore a user experience? Knowing the subject of the gamble has practical value, because it informs us as to whether or not the uncertainty concerns a subject about which Apple have experience or not; and if so, what is the track record of that experience. The outlined objectives above being a values proposition, Apple’s gamble is less about a product or service per se than it is about a user experience, specifically an extension of a consistently cultivated user experience into the field of entertainment, but with the same objectives; enriching the user, bettering the environment (in this case, the social environment), and unlocking human potential. This is an area of uncertainty about which Apple have considerable experience, successful adoption of specific offerings notwithstanding, and a proven track record. So long as Apple, then, adhere to this area of their core competency, risk and therefor uncertainty are minimised, and confined to the acceptance and uptake of specific offerings, rather than to the larger venture of TV streaming service itself.

    As ever, time will deliver the verdict.

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