The relationship between Netflix (NASDAQ:NFLX) and Apple (NASDAQ:AAPL) has deteriorated in recent months. In the latest example of the growing animosity between the two, with no warning, Netflix AirPlay support has abruptly ended. Apple recently inked high profile deals with number of TV manufacturers to include AirPlay 2 support — a big deal, given the feature has previously required an Apple TV streamer to work — but with the Netflix move, Apple device users can no longer stream Netflix to those TVs. In fact, they can no longer stream Netflix content to an Apple TV either…
The move is more of a nuisance than anything for most users, but it serves notice that AAPL is facing a battle as it pivots to services in an attempt to wean revenue reliance and Apple stock value off iPhone sales.
AirPlay Support Stops Working for Netflix
On Friday, owners of Apple devices noticed that when they tried to cast Netflix content from their iPhone or iPad, it failed. Netflix AirPlay support has been available on these devices since 2013, so that was definitely odd.
Netflix quietly added a note to its mobile devices support page, stating, ”Airplay is no longer supported for use with Netflix due to technical limitations.”
Further investigation showed that not only had Netflix AirPlay support stopped working with TVs that support AirPlay, but it had also been shut down with the Apple TV set-top streamer.
Netflix Clarifies “Technical Limitations”
As new of the Netflix move began to make headlines, the company issued a statement explaining its actions (via MacRumors):
“We want to make sure our members have a great Netflix experience on any device they use. With AirPlay support rolling out to third-party devices, there isn’t a way for us to distinguish between devices (what is an Apple TV vs. what isn’t) or certify these experiences. Therefore, we have decided to discontinue Netflix AirPlay support to ensure our standard of quality for viewing is being met. Members can continue to access Netflix on the built-in app across Apple TV and other devices.”
It’s not clear what viewing quality optimization Netflix might have been implementing, but the fact the company also shut down AirPlay support for the Apple TV suggests there might be a little more to the move.
Does It Matter?
For most iPhone and iPad users, the Netflix move shouldn’t be a big deal. The native Netflix app on the Apple TV still works. Anyone who bought a new Samsung TV when it was announced as the first brand to get built-in AirPlay 2 support won’t be able to cast Netflix from an iOS app, but smart TVs all have built-in Netflix support these days.
The Netflix move largely means inconvenience. Killing Netflix AirPlay support forces people to sign into TVs with their Netflix account instead of casting content to the TV with their iPhone.
The NFLX action takes some of the wind out of Apple’s move to bring AirPlay 2 support to a wide range of TVs. This was a big deal because for more than a decade AAPL has forced consumers to buy an Apple TV streamer if they wanted to cast content from their iPhone or iPad to a TV. And that move ties into a critical strategy: pump up services like the new Apple TV+ streaming video service.
With iPhone sales down, boost revenue and keep Apple stock value growing by rapidly growing Services division revenue.
Faced with revenue pressures of its own, NFLX has increasingly railed against Apple’s efforts, from refusing to let iPhone users pay for a Netflix subscription through an app (thereby avoiding Apple’s 30% cut) to refusing to participate in AAPL’s streaming video service plans.
Netflix told The Verge the move was “not a business competition play” but the timing is suspicious. As Apple’s services move and Apple TV+ bring it closer to being an actual competitor for subscribers, the yanking of Netflix AirPlay support is just the latest move by NFLX that make things a little for difficult for Apple — intentionally or not.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.