Regardless of the fact that Netflix and Amazon are fierce competitors in the video-streaming market, Vice President of Amazon Web Services Andy Jassy actually wants Netflix, its biggest customer, to be one of the largest businesses in the world running entirely on his companies web services platform. Because despite the two participating in the same market, the two of them need each other.
Reed Hastings, CEO of Netflix and a vocal competitor to Amazon’s Instant Video service, indeed likes Amazon for some things–like their web service platform, which his company users to provide Netflix subscribers with the things they love–streaming video. “The biggest benefit is the scale,” Hastings said. “Now we’re on a cost curve and an architecture that, as more people use it, gets cheaper.”
Even with the two companies competing on a fierce level, Jeff Bezos, CEO of Amazon has assured Hastings and Netflix that utilizing Amazon’s cloud services is a safe bet. Andy Jassy, a senior Amazon VP agrees that Netflix is an important customer for the Amazon team. “Netflix is every bit as important a customer to us as Amazon retail,” Jassy said.
So what exactly does Netflix use Amazon’s cloud web services platform for? Hastings explained to those who attended Amazon’s Cloud event in Las Vegas that the company utilizes it for a variety of uses beyond basic storage. “Netflix’s biggest problem is ranking,” Hastings said, continuing that Netflix has the unbelievable task of fitting over 10,000 videos into the space of about 10 inches of screen real estate at times.
Hastings stated that when his company gets the ranking right, users are more apt to stream content through the Netflix service. When they get it wrong, he says, users go see what’s on basic cable. Netflix, ironically, uses Amazon’s cloud services to ensure their users find videos that actually interest them.