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It continues to surprise me how (why?) Netflix builds their infrastructure on their #1 competitors platform. They're basically funding Amazon Prime. They're undoubtedly smart, so they must have a lot of incentive in doing so.



I would assume AWS allows Netflix to be lower cost, more agile, etc., allowing Netflix to deliver a better product for their customers and allowing them to focus on their core value (not servers). In addition, I doubt that Amazon Prime Video services go unfunded if Netflix wasn't an AWS customer. I don't think it's such a simple, two element zero sum concern.


I think you are correct.

And just because Netflix uses servers (hardware) hosted through AWS doesn't mean that they don't have plenty of proprietary in house tech (software) that powers their service. An example of such would be Open Connect (https://openconnect.itp.netflix.com/) their CDN built on top of FreeBSD and Nginx (https://www.nginx.com/blog/why-netflix-chose-nginx-as-the-he...).

But beyond software, content licensing and content creation are also major distinguishing factors in the streaming video space.


The better product part is debatable. These days we typically spend half an hour or more browsing to find something good to watch. The quality of titles available is terrible.


Am I the only one that thinks its a good thing that we have a system in which this kind of a situation is possible? That they can host their entire infrastructure on their competitors product shows a level of trust on both sides that I find remarkable, and something we should definitely have more of.


Apple buys screens and has some of their chips fabbed by Samsung.

It is remarkable, but not uncommon.


> Apple buys screens and has some of their chips fabbed by Samsung.

In fact all of their mobile CPUs except A8/A8X and A9X are fabricated by Samsung [1]. Lately they are also increasingly using Taiwan Semiconductor.

[1] see https://en.wikipedia.org/wiki/Apple_mobile_application_proce... and linked "Main article" pages e.g. https://en.wikipedia.org/wiki/Apple_A9


They don't announce it the same way however. Or at least I've never seen Samsung mentioned by name anywhere on apple.com.


I'm surprised nobody else has suggested it as a theory so I will.

One reason to host your service on a competitor's platform is if you intend to be purchased by that competitor. It brings your technology portfolio in alignment with theirs and makes the integration of the two platforms after acquisition easier.


If you think about it, it's also the absolute best advertisement for AWS you could have.

"What should I go with? AWS or Azure/Google/Whomever? Wait, Netflix runs entirely on AWS... I use Netflix, my daughter uses Netflix, I've never experienced Netflix downtime..."

...sure, maybe your entire reasoning for picking AWS wouldn't be because of Netflix. But it's like a poster child. If Netflix trusts AWS, why shouldn't you?


It is not a secret, it has been addressed in at least one talk by Netflix a head[1].

> Cloud features and APIs should be a commodity not a differentiator

> ...

> We would prefer to be an insignificant customer in a giant cloud.

[1] https://justinmk.github.io/jmk/selfish-cooperation


"insignificant customer in a giant cloud"

it makes me wonder if Netflix gets any "special deals" that any other corporation/consumer couldn't get, or if anything has been done at the hardware level specifically for Netflix.

I.e., I wonder if they ended up building a data center that they would have needed anyway, but made it the "Netflix datacenter," even if no one else would ever know it.


Is it also surprising when Apple sources parts from Samsung?


I wonder if you'd consider dedicated hardware for sources where the AWS bill gets to high?

For example, here in the netherlands, you have one major IX, the AMS-IX; if they were to rent a suite there, put some metal and hire a few engineers, they could supply most of western europe from there; I can imagine for some of these locations, it would make sense cost wise; on the other hand, if they are profitable like this, why take on the extra distractions of HR, failing hardware, etc. (which is probably why Netflix doesn't do the above...)


Netflix already do this, see: https://openconnect.netflix.com/en/


Is it really a direct competitor though? I mean it is in the "streaming video" sense. But Amazon Prime is not really in the business of producing original content whereas Netflix is.


Amazon Prime (Video) is backing "The Grand Tour" as well as many others -- they're definitely getting into producing original content.


"Hand of God", "Transparent", "The Man in the High Castle", and a whole bunch more.

https://en.wikipedia.org/wiki/Amazon_Studios


A relatively large proportion of what I watch on Prime is Amazon Studios content. Largely because there are more interesting series than I have time to watch, and so it's easy to pick the content that's already included in the Prime subscription I'd still have just for the delivery first, and relegate content I have to pay extra for for later (that said, I do end up paying for quite a few movies).


Think about it from Amazon's perspective. $===$===$ every day of the week. Their AWS devision would be smart not to consider that they are providing their competitor with a good product/platform. And for Netflix, if they are getting a great platform (cheap, powerful, good support, etc) then why not? They should be beating their competitor on creative grounds.


AWS appears to be the best product for the job in terms of cost-effective scalability for their needs. That it happens to be a profit center for a competitor is a side concern.

Furthermore, it's actually a benefit to the marketplace! It forces Netflix to differentiate it's product to retain customers/marketshare.


Competition is not a zero sum game and video on demand is not a winner takes it all scenario. Netflix is already the market leader and for Amazon it is a great way to hedge, even if their video service fails Netflix would ensure they still get some profit from the market.


It all comes down to core -vs- non-core competencies...


Apparently Amazon makes more money on AWS than they do on their retail site. I'm sure netflix helps :)


I think this also facilitates moving to another competitor if the need arises


It's cheaper for them to run on Amazon Prime.


It's a bad decision. It's similar to companies deciding to outsource their communication to other parties (e.g. Slack) that can be hacked [1] and you can be banned at any moment.

Don't outsource your infrastructure to 3rd parties (especially competitors) just to save few dollars in the short term. Have control of your assets.

  [1] https://techcrunch.com/2015/03/27/slack-got-hacked/


I don't think it is a big concern so long as the risks are acknowledged and contracts are in place. Apple outsources production of its Apple Ax SoCs to Samsung too.


> to other parties that can be hacked and you can be banned at any moment

That applies to you and me. Amazon will not ban Netflix randomly. If anything unexpected happens, I'm sure Netflix guys have direct contact to either people dedicated to servicing them, or appropriate level of Amazon management. They're also unlikely to have the same contract/access as you and me.


If they were to go with Azure they'd be funding the Windows/Xbox Store. If they were to go with Google they'd be funding the Play Store.

Best just to use the best tools for the job (and us customers get to reap the rewards of that funding with great TV shows!)




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