Top of the Great Era

Chapter 3021: High-quality services are more expensive

There are many TV boxes now, and even with the layers of policy blockades in China, there are many TV boxes.

There are dozens of TV boxes on the market in the United States.

AppleTV is really not competitive.

It’s not the product.

But it's too expensive.

Not only is it expensive to buy the box, but the product inside the box is also expensive.

Other TV boxes do not charge commissions for apps in the box, which is equivalent to a free platform that connects users and apps. AppleTV is different. It adopts Apple's consistent principle in the past and charges a 30% commission for paid apps.

In order to ensure their own interests, the application party has no choice but to raise the price.

For example, the monthly subscription fee for Netflix on other TV boxes is $9.99, and all of this $9.99 belongs to Netflix. The subscription fee for AppleTV is $11.99, and of this $11.99, $3.6 belongs to Apple, and Netflix only gets $8.4.

Two or three years ago, Netflix had just launched its strategy of producing its own dramas, and its business was not yet stable. In addition, TV boxes were not mature enough at that time. Apple TV was very popular in the market due to its excellent quality and reputation, and its sales soared.

Due to these two factors, Netflix reached a cooperation with Apple.

Netflix entered AppleTV and agreed to Apple's request for a 30% commission.

Times have changed, things are different.

Netflix has now established a firm foothold in the film and television streaming industry and has become the first choice for most streaming users to watch movies and TV series through the Internet. Zhou Buqi is also not idle. The streaming platform Peacock, which has been brewing for many years, is about to be launched under Ziweixing Global!

With Boss Zhou’s experience in the Internet and the backing of the world’s largest content library behind Ziweixing Global, it is conceivable that Peacock will occupy a very important position in the streaming industry!

If Netflix and Peacock both reject Apple TV, Cook will be in a passive position, and Apple TV, which already has poor sales, may really fail.

  It can be said that this time we are completely confident!

However, Zhou Buqi had not originally intended to make a move so soon.

Now he is busy with the listing of Ziweixing International.

I had originally planned to wait until it went on the market, and after Ziweixing Global's Peacock was launched, I would officially join forces with Netflix and publicly announce my withdrawal from Apple's AppleTV to force them to submit.

Unexpectedly, Cook has a keen sense of smell.

After hearing that Ziweixing Global was going to launch its own streaming platform, he quickly reacted. Without Zhou Buqi's explicit or implicit suggestion, he had already thought of this possibility and took the initiative to contact Boss Zhou.

Want to turn the crisis into nothing.

There was no chance for Zhou Buqi to slap himself in the face.

Cook sighed, "We have had many pleasant collaborations over the years."

Zhou Buqi smiled and said, "Of course, every cooperation is still fresh in my memory. Now we are still working together to fight against Qualcomm! However, cooperation is cooperation, and competition is also inevitable. Competition and cooperation are the mainstream of modern society."

Cook frowned and said, "Really?"

Zhou Buqi looked calm and said firmly, "We have to change. Netflix lost $16 billion in the past year. After the launch of Peacock, we are expected to lose at least $15 billion to $20 billion a year. We paid such a high price to build up the streaming media industry. What's the result? Not only does Apple not offer any discounts, it is also sucking blood from us."

Cook quickly waved his hand and said, "That's not what I meant. We provide a platform and services, and it's normal to charge a certain fee."

"Is that your answer?"

Zhou Buqi glanced at him, but remained calm.

Cook must have been well prepared to make up his mind to find me and talk about this matter.

I guess he has already made the decision, so just wait.

Cook pondered and said: "There are indeed many TV box products on the market now, but none can compare with AppleTV. Other competitors are doing really badly. AppleTV's advantage in the TV box industry is far greater than the advantage of iPhone in the mobile phone industry."

"In the mass market, the biggest advantage is price." Zhou Buqi didn't give him much opportunity to argue. "Redmi, Honor, Motorola, and Vivo have all launched smartphones priced at just over $100. The mobile phone market will definitely be turned upside down in the future. At least in terms of total sales, the iPhone will no longer have any advantage."

Cook said: "You are right. Expensive products often lack advantages in total sales. However, expensive products also have inherent advantages. Expensive products are more likely to be recognized by users when they provide expensive services."

Zhou Buqi did not comment.

Cook went on to say: "The quality of Apple TV is far better than those of its competitors on the market, so Apple TV can not only be sold at a higher price, but also be more expensive than its competitors when providing services for some platforms. This is not only the principle of Apple's software and hardware ecosystem, but also the most basic business logic."

Zhou Buqi shook his head and laughed, "Solve the mystery!"

Cook said: "Apple TV can share revenue with streaming media manufacturers! This is the greatest sincerity I can express!"

“Sharing the profits?”

Zhou Buqi raised his eyebrows.

Cook said: "For example, Netflix's subscription fee is $10 per month in other TV boxes, while the subscription fee for Apple TV is $12 per month. I think this pricing strategy is reasonable. Apple TV can provide better quality and better services, so it is more expensive than its competitors, which is reasonable. According to our calculations, Apple TV's service fee is 20% higher than that of its competitors, which is a very reasonable range."

Zhou Buqi said: "The problem now is that even if Netflix raises its prices by 20%, its revenue from AppleTV is still far less than that from other places!"

Cook smiled and said, "Yes, so we just need to resolve this part of the disagreement. The disagreement is not whether the commission exists, but whether Netflix can get more returns by providing better services for Apple TV."

Zhou Buqi was already certain that the other party had already prepared a plan before asking him to come over, and... he really wanted to make concessions!

If concessions were made, then the matter could really be resolved through friendly negotiation.

Cook said: "I have decided to reduce AppleTV's commission from 30% to 15%. In this way, Netflix can get more revenue from the services it provides on AppleTV than other TV boxes after deducting the commission. This is Apple's attitude towards its partners. Netflix does this, as does Ziweixing Global's Peacock. You only need to increase the price of related products on AppleTV by 20%, and then AppleTV will only take a 15% commission as operating expenses, maintaining a portion of the revenue premium for content providers. Under this new strategy, content providers can earn more revenue than from other TV boxes."

Zhou Buqi laughed and said, "You really don't suffer any loss at all!"

Cook wondered, “Reducing the commission from 30% to 15%, isn’t this a huge concession? Apple has shown its utmost sincerity in cooperation! Under the new commission model, by providing services for AppleTV, streaming media vendors can earn more revenue from AppleTV than from other TV boxes!”

In terms of quality, AppleTV is indeed much better than other competitors.

This is Apple’s confidence.

Even though AppleTV is more expensive than other TV boxes and the content services it provides are more expensive, Apple is confident that users can accept such a price difference, because better services should have a higher price.

Although AppleTV still has a 15% commission, as long as the streaming media manufacturers set a slightly higher price in AppleTV, about 20% higher than other TV boxes, and then Apple takes another 15%...in the end, the streaming media manufacturers still make money, and although there is a commission for the services they provide to Apple, they can bring in more revenue.

This is indeed a solution.

Zhou Buqi doesn't care about the pricing method adopted by Apple products, as long as Netflix and Peacock can make money. He smiled and said: "What about the iPhone and iPad?"

"This is impossible!"

Tim Cook's face changed and he flatly rejected it.