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Apple is not providing a service to Netflix.
Actually, they are. They are allowing them to sell their product through the App Store. There's a Terms of Service you have to agree to sell, which includes what they do and what I can't. (although minor, Apple also hosts the installation file)
lets put it another way, let’s say you own a computer store selling hard drives and a subscription tech support, you then create a free app to sell your hard drives. Should Apple get a cut of your hard drive sales from your app? No i didn’t think so. Now you add some more items to your app for sale, you add that tech support subscription and bang Apple are now taking 30% of your fee Apple, I’d bet you wouldn’t be happy.
First of all, Apple does allow you to sell things through your app without them taking a cut, as long as whatever you are selling aren't intended to be used on the device. So, you could sell your precious hard drives without Apple taking a cut. Other examples are tickets of all kind and so on.
Secondly, Netflix is making money by being available in the App Store. To take your hard drive example, I bet you'd be quite annoyed if Western Digital put a big sticker on all their harddrive boxes that said you could get their hard drives cheaper by cutting out the middle man and buy from their website instead.
 
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Actually, they are. They are allowing them to sell their product through the App Store. There's a Terms of Service you have to agree to sell, which includes what they do and what I can't. (although minor, Apple also hosts the installation file)

First of all, Apple does allow you to sell things through your app without them taking a cut, as long as whatever you are selling aren't intended to be used on the device. So, you could sell your precious hard drives without Apple taking a cut. Other examples are tickets of all kind and so on.
Secondly, Netflix is making money by being available in the App Store. To take your hard drive example, I bet you'd be quite annoyed if Western Digital put a big sticker on all their harddrive boxes that said you could get their hard drives cheaper by cutting out the middle man and buy from their website instead.
So the small print says you can sell one thing but not another...thats great.
Netflix is making money by buying content and having subscribers to watch that content.
Apple is just a viewer like xbox, playstation, tv and so on.
Apple should not be getting a cut of that revenue. It will change and things like this will end up being regulated. You only have to wait.

PS why add adjectives like precious? Don't take it to heart so much. It must be hard for all the fanboys out there who are feeling the heat like Apple.
 
“theotherphil” said:
I love arguments like this. Like you somehow have a right to use Apple's infrastructure to host your app, provide bandwidth for downloads, provide advertising, marketing and easy access, globally and all in one place FOR FREE.



Microsoft learnt the hard way that it's better to allow in app sign up than try and force people to a website for sign up. Many people choose Apple for ease of use, they want things to just work and trust apple to keep their personal details safe. The less people you share your data with, the less of a footprint you have for hackers to take advantage of



Let's see, the app is only 56MB. Boy, that's a lot of space being used! Ok, I get it shows up in the App store and people rate the app, but really, how much does that take up, not as much as you might think. Also, apple rakes in $99 a year for a developer fee and to me, that should be enough. What other infrastructure is Netflix actually using once the app is on someone's phone. NONE...ZIP...ZERO. The bandwidth to use the app is on the user.

Correct, 56MB is what space it takes up on the server. Netflix has 130million subscribers worldwide. Let's be conservative and say Netflix has 20m iOS users and all download the app on a single device....that 1.12PB of data transferred. There's been 25 updates to the Netflix app in the last 5 months alone. Assume all iOS user update, that's 28PB of data transferred and Apple has to fund that bandwidth for free? Get real.
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Some people would argue they should.
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Oh yeah. Netflix needs Apple to advertise for them... sure. Also, what’s the 100$ a year per developer for if not paying for server space?

Having a prominent place in the App Store where a captive audience of users frequent is called advertising. $100 gets you access to the development tools (Xcode, beta's, support forum, provisioning portal, push notification service, support docs etc, etc). Apple pays for the ongoing costs of the App Store through taking a cut from the apps and subscriptions. This is very clear in the developer docs.

As an example, the Netflix app is 56mb. Netflix has over 130m subscribers so conservatively assuming only 20m iOS users, that's 1.12PB bandwidth used for the initial download. In the last 5 months, there's been 25 updates to the app. Assume all users update....that's a combined total of 28PB of bandwidth used. Do you think it's fair that Netflix should be given this for free?

Edited: Calculations changed from megabits to megabytes.
 
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Correct, 56Mb is what space it takes up on the server. Netflix has 130million subscribers worldwide. Let's be conservative and say Netflix has 20m iOS users and all download the app on a single device....that 140TB of data transferred. There's been 25 updates to the Netflix app in the last 5 months alone. Assume all iOS user update, that's 3.5PB of data transferred and Apple has to fund that bandwidth for free? Get real.
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Having a prominent place in the App Store where a captive audience of users frequent is called advertising. $100 gets you access to the development tools (Xcode, beta's, support forum, provisioning portal, push notification service, support docs etc, etc). Apple pays for the ongoing costs of the App Store through taking a cut from the apps and subscriptions. This is very clear in the developer docs.

As an example, the Netflix app is 56mb. Netflix has over 130m subscribers so conservatively assuming only 20m iOS users, that's 140TB bandwidth used for the initial download. In the last 5 months, there's been 25 updates to the app. Assume all users update....that's a combined total of 3.5PB of bandwidth used. Do you think it's fair that Netflix should be given this for free?

And tons of data is being used by Messages. We should also charge users for it! Apple doesn’t even deserve 15% of a media subscription. Or are you saying it costs them roughly 30m dollars a month to deal with that bandwidth use? Or are you really trying to say they need Apple to advertise for them through prominent placing? And are we also assuming they don’t pay for App Store ads?
 
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And tons of data is being used by Messages. We should also charge users for it! Apple doesn’t even deserve 15% of a media subscription. Or are you saying it costs them roughly 30m dollars a month to deal with that bandwidth use? Or are you really trying to say they need Apple to advertise for them through prominent placing? And are we also assuming they don’t pay for App Store ads?

Yes, ton's of data is being used by Apple's other services and Apple isn't passing this cost on to the end user as you are not making money from sending those messages. Netflix is conducting a business off of the back of Apple's ecosystem. It's Apple's garden. You need to play by their rules or take your ball and go home.
 
Yes, ton's of data is being used by Apple's other services and Apple isn't passing this cost on to the end user as you are not making money from sending those messages. Netflix is conducting a business off of the back of Apple's ecosystem. It's Apple's garden. You need to play by their rules or take your ball and go home.

Or they can just have the payments be outside of the store, thereby following the rules, and both eat their cake and have it too. If Apple pushes this, I’m sure Europe will be swift.
 
Or they can just have the payments be outside of the store, thereby following the rules, and both eat their cake and have it too. If Apple pushes this, I’m sure Europe will be swift.
Well, as it stands, nothing is stopping users from signing up for a Netflix account directly via the website and bypassing Apple altogether.

Though if Netflix wants to push the issue, I can see Apple retaliate by not approving subsequent updates to the Netflix app or something along the line. Citing breaches to the App Store rules as a reason.

It will be interesting to watch both parties duke it out and see just who has more leverage in this situation.
 
Or they can just have the payments be outside of the store, thereby following the rules, and both eat their cake and have it too. If Apple pushes this, I’m sure Europe will be swift.

Where in any European law does it say one business has to let another use it's services without paying? Where does it say that Apple is forced to even allow the app on it's App Store?

There are very clear developer agreements....think of it as a contract when you sign up to use their services. These can be varied at anytime by Apple and if you don't agree, you are free to go elsewhere. The developer agreement says "Subscribers who were acquired outside of your app can read or play content through the app. However, you may not provide external links in your app that allow users to purchase subscriptions outside of the app." It's pretty straightforward really.
 
Well, as it stands, nothing is stopping users from signing up for a Netflix account directly via the website and bypassing Apple altogether.

Though if Netflix wants to push the issue, I can see Apple retaliate by not approving subsequent updates to the Netflix app or something along the line. Citing breaches to the App Store rules as a reason.

It will be interesting to watch both parties duke it out and see just who has more leverage in this situation.

And then would come the EU fines.

Where in any European law does it say one business has to let another use it's services without paying? Where does it say that Apple is forced to even allow the app on it's App Store?

There are very clear developer agreements....think of it as a contract when you sign up to use their services. These can be varied at anytime by Apple and if you don't agree, you are free to go elsewhere. The developer agreement says "Subscribers who were acquired outside of your app can read or play content through the app. However, you may not provide external links in your app that allow users to purchase subscriptions outside of the app." It's pretty straightforward really.

I meant fines for anticompetitive behavior.
 
If it’s being argued that Google has a monopoly on Android and in the US that Apple has a monopoly on iOS...

I think you see where this can go.

Google has a monopoly because of huge its market share, which you can argue stifles innovation. Apple doesn’t exceed 50% market share in their home turf. Even if you shun iOS, there’s a huge android market you can target.

I doubt monopoly charges against Apple are going to hold up in court.
 
Google has a monopoly because of huge its market share, which you can argue stifles innovation. Apple doesn’t exceed 50% market share in their home turf. Even if you shun iOS, there’s a huge android market you can target.

I doubt monopoly charges against Apple are going to hold up in court.

I don’t think you understood me. Google didn’t get fined for monopolizing the smartphone market. They got fined for anticompetitive practices within Android itself. You can bury your head if you want, but we are in a brave new world where you can have a monopoly on your own products.
 
I don’t think you understood me. Google didn’t get fined for monopolizing the smartphone market. They got fined for anticompetitive practices within Android itself. You can bury your head if you want, but we are in a brave new world where you can have a monopoly on your own products.

No, I believe the problem was precisely that Google’s practices threatened to stifle innovation within the smartphone market, both because of their larger market share and that their OS and services were available for free, which made it hard for competitors to compete based on price.

Apple doesn’t license ios, nor are their services available outside their platform. They are not a monopoly in a traditional sense.

The whole point of anticompetitive laws is precisely to help boost innovation and competition. Apple’s 30% cut doesn’t impact any of them.

There may well be some law that Apple is running afoul of. Monopoly law is not one of them.
 
No, I believe the problem was precisely that Google’s practices threatened to stifle innovation within the smartphone market, both because of their larger market share and that their OS and services were available for free, which made it hard for competitors to compete based on price.

Apple doesn’t license ios, nor are their services available outside their platform. They are not a monopoly in a traditional sense.

The whole point of anticompetitive laws is precisely to help boost innovation and competition. Apple’s 30% cut doesn’t impact any of them.

There may well be some law that Apple is running afoul of. Monopoly law is not one of them.

The words of the Head of the EC was that Google has a monopoly on Android. And I don’t think you seem to get the difference between EC and US in terms of anticompetitive laws.
 
No, I believe the problem was precisely that Google’s practices threatened to stifle innovation within the smartphone market, both because of their larger market share and that their OS and services were available for free, which made it hard for competitors to compete based on price.

Apple doesn’t license ios, nor are their services available outside their platform. They are not a monopoly in a traditional sense.

The whole point of anticompetitive laws is precisely to help boost innovation and competition. Apple’s 30% cut doesn’t impact any of them.

There may well be some law that Apple is running afoul of. Monopoly law is not one of them.
wtf this answer ? 30% cut nothing to do with competitive act. Google and Windows only pre-install default like Safari does in osx. No much diff. Both offer choice.

If you buy company and close all competition i would said yes.. if just service .. It's just freakin service. I can use chrome, firefox or other map like here map.Nothing stop the user even use safari old version in windows or apple music in android or itunes in windows.
 
Lmao, right. I promise you most people don’t subscribe to Netflix through iTunes. Nobody who wants to subscribe to Netflix will avoid doing it because you can’t do it through iTunes, if you think that’s the case you’re living in your own little universe. The only one who will lose out is Apple, losing out on fees they aren’t entitled to anyway and should have never received.

Lmao, you're so cute. if it's so few ppl using it, why Netflix have to make this move.
Is your own little universe means only USA and 20~50 y.o. ppl? cute.
 
It’s not about fairness but about control. Apple controls their App Store and by extension, developers who want to park their apps there need to play by the App Store rules.

Of course they are more than welcome to try and circumvent the rules. Just don’t expect Apple to sit idly by and no nothing in response.

It’s a constant cat and mouse game. Let’s see who has more leverage. Apple, or everyone else.
OK I wasn’t talking about rules. So you open the Netflix app and all you see is a sign in button. That isn’t circumventing any rules. Apple doesn’t require apps to offer IAP. My point is if you think Apple deserves a cut of Netflix than surely they deserve a cut of Uber and Lyft transactions too. I’d argue both of those companies are more dependent on iOS/iPhone than Netflix is.
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Not to entirely disagree with the thrust of what you’re saying (that Apple’s commission may be high or perceived to be high) but the $100 is for administration and support mainly. Pay that and you get to ask Apple questions about their APIs, request changes and so on. It’s definitely more than a certificate and a virtual slot on the App Store.
What portion of an iOS hardware sale goes to supporting the App Store? Or is Apple’s maintenance of the App Store 100% coming from the commission Apple makes from app sales/IAP? Also I’d be curious to know what the margins are. I have to imagine the App Store infrastructure isn’t as costly now as it was when Apple was first getting it going.
 
OK I wasn’t talking about rules. So you open the Netflix app and all you see is a sign in button. That isn’t circumventing any rules. Apple doesn’t require apps to offer IAP. My point is if you think Apple deserves a cut of Netflix than surely they deserve a cut of Uber and Lyft transactions too. I’d argue both of those companies are more dependent on iOS/iPhone than Netflix is.

Dependency has nothing to do with it.

Apple is very clear on what they take a cut out of and what they don’t. The fares earned through Uber and LYFT aren’t subscriptions or IAPs. Their payments do not go through Apple’s iTunes billing service. That’s why Apple doesn’t get a cut.
 
I wonder if people will also be enthusiastic about this business model when they buy an Apple Car in the future only to find out that the only place where they can charge or fuel that car is the super expensive Apple Store in the next big city. They can easily design the car that way - and probably get away with it because most Apple customers are already well conditioned to paying that Apple tax without questioning it.
Not a great analogy. If the screen breaks on my iPhone I don’t have to take it to an Apple store for servicing. The lightning connector in my car is 3rd party. So is my iPhone X case. Lots of people own 3rd party bands for their Apple Watch.
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Dependency has nothing to do with it.

Apple is very clear on what they take a cut out of and what they don’t. The fares earned through Uber and LYFT aren’t subscriptions or IAPs. Their payments do not go through Apple’s iTunes billing service. That’s why Apple doesn’t get a cut.
I understand why Apple currently doesn’t get a cut but should they? How come I can add a payment method in the Uber app but not Netflix, Spotify, Amazon Prime, etc. Because way back when Apple decided the 30% cut would only apply to digital media. But does that make sense any more? Like I said I think Uber is much more dependent on iOS/iPhone than Netflix is. Heck Eddy Cue even said once that Uber wouldn’t exist if not for iOS. So if Apple deserves a cut of Netflix subs they certainly deserve a cut of Uber transactions.
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The day is coming when Apples "monopoly" on app sales on devices will come to an end and they will legally be forced to change their business model.
Apple is just trying to shore up its business model but not allowing Netflix to put a subscribe button in their app. Apple forces them to go through Apple to provide subscriptions which is a monopolistic style behaviour.
I’m not sure what will happen with Apple’s rule that you can’t sell digital media in-app without Apple getting a cut. So far it’s survived government scrutiny. But it’s easy enough to subscribe/purchase via a web browser. So the Netflix app will have a sign in button but not a subscribe button. Big deal. Amazon Barnes & Noble (and I think Spotify) already are that way.
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What if there is a shop that has an app where they sell there wares, they have a button to sell a dvd of a tv episode and Apple doesn't take a cut, but as soon as they offer a button to sell a subscription apple wants 30%.

Doesn't make any sense.
I don’t think any app can sell digital media in-app without Apple taking a cut. Open the Amazon app and you can buy anything but books, movies and music.
 
Correct, 56MB is what space it takes up on the server. Netflix has 130million subscribers worldwide. Let's be conservative and say Netflix has 20m iOS users and all download the app on a single device....that 1.12PB of data transferred. There's been 25 updates to the Netflix app in the last 5 months alone. Assume all iOS user update, that's 28PB of data transferred and Apple has to fund that bandwidth for free? Get real.
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Having a prominent place in the App Store where a captive audience of users frequent is called advertising. $100 gets you access to the development tools (Xcode, beta's, support forum, provisioning portal, push notification service, support docs etc, etc). Apple pays for the ongoing costs of the App Store through taking a cut from the apps and subscriptions. This is very clear in the developer docs.

As an example, the Netflix app is 56mb. Netflix has over 130m subscribers so conservatively assuming only 20m iOS users, that's 1.12PB bandwidth used for the initial download. In the last 5 months, there's been 25 updates to the app. Assume all users update....that's a combined total of 28PB of bandwidth used. Do you think it's fair that Netflix should be given this for free?

Edited: Calculations changed from megabits to megabytes.

Ok, so how do all the FREE apps that don't have subscriptions or IAP pay APPLE for the same usage on their services? with the development Fee, that is paid annually.

Oh, the developers pay their the developer fee to get this:
https://developer.apple.com/programs/whats-included/

Yes, their fee includes use of the APP STORE, including the bandwidth for people to download it.

"PROMINENT PLACE in the app store where a CAPTIVE AUDIENCE OF USERS" Let's phrase that correctly, "The Only Place you can put your App where CAPTIVE AUDIENCE that have no other choice to get an app from" to get an app from. (Don't get me wrong, I don't have a problem with this setup, it just find funny, that people believe that the APP store is like a TV show, everyone is watching it, but in reality, it's more like 7-eleven, "You going to there when you need something"


However, in the end, unless Apple changes their policy, Netflix isn't doing anything different then many other subscription based apps (any countless number of TV station apps, Audible, B&N, etc) are doing, making you sign up on their website, which is not against Apple's policy. Will they lose subscribers, sure, but they won't lose all 20M (if it is even that high).


Yes, ton's of data is being used by Apple's other services and Apple isn't passing this cost on to the end user as you are not making money from sending those messages. Netflix is conducting a business off of the back of Apple's ecosystem. It's Apple's garden. You need to play by their rules or take your ball and go home.

And Netflix will be playing by Apple's rules. Just like HBO, Audible, B&N, etc. So, what's the big deal?

Or they can just have the payments be outside of the store, thereby following the rules, and both eat their cake and have it too. If Apple pushes this, I’m sure Europe will be swift.

They are not saying to are not going to not follow the rules, they are just saying they are going to change things. That is, stop in-app subscriptions sign up. It's really not that big of a deal.
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Dependency has nothing to do with it.

Apple is very clear on what they take a cut out of and what they don’t. The fares earned through Uber and LYFT aren’t subscriptions or IAPs. Their payments do not go through Apple’s iTunes billing service. That’s why Apple doesn’t get a cut.

Ok, so, finally, some one got the point out with that comparison and it has merit.

Also, I don't believe that anyone is arguing that apple doesn't have a right to charge a fee for IAP or Subscriptions setup via the app using Apple's billing system. I think people are more concerned with the 30% and 15% fee. People keep saying it helps pay for Apple's infrastructure. And they may be right, but let's take into account all the FREE apps that don't have IAP or Subscriptions. Apple would have already calculated that into the developer fee that you must pay every year to have an app in the App store. Personally, I don't have a problem that Apple charges a fee for IAP and Subscriptions that use their billing system, I just think 30%/15% is a bit high. Seems more like a tax, some people pay it and make up for the people who don't or can't. Are we not taxed enough?
 
I understand why Apple currently doesn’t get a cut but should they? How come I can add a payment method in the Uber app but not Netflix, Spotify, Amazon Prime, etc. Because way back when Apple decided the 30% cut would only apply to digital media. But does that make sense any more? Like I said I think Uber is much more dependent on iOS/iPhone than Netflix is. Heck Eddy Cue even said once that Uber wouldn’t exist if not for iOS. So if Apple deserves a cut of Netflix subs they certainly deserve a cut of Uber transactions.

I am not following your argument, so I will bow out of this one.

I’m not sure what will happen with Apple’s rule that you can’t sell digital media in-app without Apple getting a cut. So far it’s survived government scrutiny. But it’s easy enough to subscribe/purchase via a web browser. So the Netflix app will have a sign in button but not a subscribe button. Big deal. Amazon Barnes & Noble (and I think Spotify) already are that way.

The issue I see here is that it compromises the end user experience. The whole point of using an app on iOS is precisely for the security and convenience. Why would I as a user want to key in my payment details in a web browser instead of quickly paying in the app using an account I already have on my phone, and in the process ensuring that my personal details never leaves Apple's servers?

That said, I concede that an argument can be made that it is precisely because of Apple's onerous demands that incentivise companies to come up with such bad experiences. If one day, Netflix completely removed the opportunity to subscribe in-app and mandated that I do so through their website (like what Amazon Prime has done), it would suck for their users, and I would completely understand why they are doing so, because Apple forced their hand.

In this regard, I suppose one could further argue that by reducing their cut, Apple is removing another incentive for companies to stop "gimping" their apps, though it's still debatable what a more reasonable cut is. Certainly not 0%. 7.5%? 5%? A sliding scale depending on how much money said app brings in?
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Also, I don't believe that anyone is arguing that apple doesn't have a right to charge a fee for IAP or Subscriptions setup via the app using Apple's billing system. I think people are more concerned with the 30% and 15% fee. People keep saying it helps pay for Apple's infrastructure. And they may be right, but let's take into account all the FREE apps that don't have IAP or Subscriptions. Apple would have already calculated that into the developer fee that you must pay every year to have an app in the App store. Personally, I don't have a problem that Apple charges a fee for IAP and Subscriptions that use their billing system, I just think 30%/15% is a bit high. Seems more like a tax, some people pay it and make up for the people who don't or can't. Are we not taxed enough?

Well, with the App Store as profitable as it is (it should have brought in about 12 billion for Apple last year, based on how much they paid developers, and I am willing to bet my last dollar that the costs of running the app store is nowhere near that), I wonder if Apple may have shot itself in the foot when it recently touted the app store's profitability as one of the cornerstones of its services income.

I know there has been a lot of criticism about Apple supposedly being overly-reliant on the iPhone for the bulk of its revenue, and Apple is surely looking for ways of diversifying their income, but I wonder if their eagerness in positioning the App Store as such may disincentive Apple from doing "the right thing".

Now that they have essentially committed themselves to growing App Store revenue, the chances of them offering to reduce their cut of purchases is even more unlikely. If anything, I wonder what they might do next to further try and grow App Store revenue.
 
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The issue I see here is that it compromises the end user experience. The whole point of using an app on iOS is precisely for the security and convenience. Why would I as a user want to key in my payment details in a web browser instead of quickly paying in the app using an account I already have on my phone, and in the process ensuring that my personal details never leaves Apple's servers?

That said, I concede that an argument can be made that it is precisely because of Apple's onerous demands that incentivise companies to come up with such bad experiences. If one day, Netflix completely removed the opportunity to subscribe in-app and mandated that I do so through their website (like what Amazon Prime has done), it would suck for their users, and I would completely understand why they are doing so, because Apple forced their hand.

In this regard, I suppose one could further argue that by reducing their cut, Apple is removing another incentive for companies to stop "gimping" their apps, though it's still debatable what a more reasonable cut is. Certainly not 0%. 7.5%? 5%? A sliding scale depending on how much money said app brings in?

You say, compromises user experience? What User experience are you referring too? The one time setup that you have to do on Netflix's website? One time and only one time? I guess I can understand ones anxiety about having to visit to sign up for service, a little, but this is not a new concept, at all. But what other user experience is compromised? I still don't get that argument. Yes, while convenient to sign up in app, after that, the user experience is identical.
To each their own I guess.
 
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