Netflix Tries To Free Itself From Apple
A few weeks ago I blogged about Epic removing its eGame Fortnite from Android’s Play Store to avoid paying Google a rev share of players’ in-app purchases. Now it looks like some other subscription-based apps, including Netflix and Spotify, are trying to get around Apple in the same way. Spotify’s move is pretty straightforward. They’ve already disabled the ability for listeners to buy a sub directly through the iTunes store, which makes sense since they’re a direct competitor to Apple Music. Netflix’s approach is a little more interesting though.
According to TechCrunch, Netflix is “testing a new iTunes payment method” in 33 countries. In this case the test is a blatant work around. Lapsed Netflix subscribers won’t be able to renew their subscriptions through Apple’s App Store, and instead be redirected to a Netflix link to re-enroll directly with the streamer. This is significant because Apple takes a 15% cut of Netflix’s subscription price after the first year – so this is an easy margin boost for the video pub. Netflix will still allow new subscribers to sign up through Apple, and pay Tim Cook an amazing 30% for that initial year’s cost. There’s clearly value in Apple bringing new subs to Netflix, so that first year’s vig is probably worth it. Netflix is just trying to get out of paying Apple for all eternity.
If this works I wouldn’t be surprised if other subscription-based apps try to do something similar in the near future.