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Comment by jdorfman | Hacker News Reader

> Three months later Netflix cut prices and referred to Amazon’s assumed imminent entry to the space; Netflix’s stock slid again.

I never understood why Netflix would continue to become one of the largest AWS customers after Amazon entered the space. Will someone please enlighten me?

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Switching cloud providers at Netflix's scale is an enormous multi-year technical undertaking, plus they would be exposed to the risk of two cloud providers instead of one while in transition, plus there are a lot of unknowns in switching providers at that scale which have all been ironed out over the years at AWS, and which could negatively impact customer perception of their product. Plus, as one of the showcase examples of cloud computing success that AWS loves to refer to, I'm sure that Netflix has some sweetheart deals that are difficult to compete with. It would take many many years for "dollars diverted from our competitor" to come close to "dollars spent executing the transition", even with the assumption that a successful transition is possible.

Amazon doesn’t really compete with Netflix. Prime Video is there as a marginal benefit to keep customers paying for Prime, which in turn keeps them shopping at Amazon. The Prime catalog frequently changes to the point that a third or even half of my bookmarks are either pay-to-rent or just not available at all.

To be fair, by now Netflix is rotating a lot, too. By now I'm surprised if a movie or series I'm recommended actually is on Netflix. It's not on Amazon Prime level yet, but it's not that far off, at least in my experience.

I wouldn’t dismiss pay-to-rent and the additional subscription channels. If you’re not averse to those, Prime is still the best one-stop besides Netflix.

The same reason Apple buys iPhone displays from Samsung and has a search deal with Google. Companies can directly compete with each other while simultaneously having partnerships and signing win-win deals. Happens in business all the time.

Great point.

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