Benedict Evans, on iPhone as a subscription service:
One can certainly argue that selling smartphones is a subscription business, and though Google does not itself sell phones (to any significant degree), Apple certainly does. You pay an average of $700 or so every two years (i.e. $30/month) and Apple gives you a phone. Buy an Android instead and you lose access to the (hypothetical) great Apple television service.
On the idea of buying Netflix:
From a pure M&A perspective, buying Netflix and immediately limiting its business to Apple devices would halve its value – why buy a business and fire half the customers? Buying it without such a restriction would have no strategic value – Apple would just be buying marketing and revenue. But as Amazon has shown, you don’t have to buy Netflix – they’re not the only people who can buy and commission great TV shows.
And on Apple taking on the business of producing hit shows to enhance its content:
Perhaps a deeper question, setting aside the purely strategic calculations, is that Apple has always preferred a very asset-light approach to things that are outside its core skills. It didn’t create a record label, or an MVNO, and it didn’t create a credit card for Apple Pay – it works with partners on the existing rails as much as possible (even the upcoming Apple Pay P2P service uses a partner bank). So, Apple has hired some star producers and will presumably be commissioning some shows, with what counts as play money when you have a few hundred billion of cash. But I’m not sure Apple would want to take on what it would mean to have a complete bouquet of hundreds of its own shows. That would be a different company.
The whole piece is thoughtful and well written. It’s all about the ecosystem. What serves the ecosystem serves Apple.
I’ve been saying this for years on the AI forums — why buy netflix? what does it get them? netflix content already streams on apple devices, so it adds no value to apple hardware customers.
There’s too much TV/Movie content at this point and like what happened with music the ubiquity will render it worthless.