Netflix tests removing App Store billing on iPhone & iPad

Netflix may be set to drop in-app payments for iPhone and iPad owners, giving the streaming service a greater revenue cut from people who still want to subscribe.

Since Aug. 2, testing of the idea has been taking place in 33 countries, Netflix confirmed to TechCrunch. Some of the bigger test markets include Canada, France, Germany, Great Britain, India, Italy, Japan, and South Korea.

The company in fact said that it's been testing since June, but began in just 10 countries. All new or resubscribing Android users have been unable to use Google Play for billing since May.

Apple typically claims a 30 percent cut from App Store transactions. This can shrink to 15 percent for long-term subscriptions, yet having to split with Apple has forced some subscription-based businesses to weigh the balance between keeping revenue or hoping that the convenience of in-app payments attracts a large audience.

Music streamer Spotify at one point offered in-app subscriptions, but charged more for those than elsewhere as a way of compensating for Apple's take. Rather than maintain a double-standard, it eventually caved and removed the in-app option, requiring people to sign up on the Web instead.

Apple has allegedly been eager to push developers towards subscriptions, even arranging an invitation-only meeting in New York City to persuade them. The company is thought to be happy with its results so far, even though few apps are subscription-based.

Apple's guidelines do not prohibit web-based services sign-ups. However, it does not allow the app itself to direct users to sign up on a company's website in the app.

26 Comments

payeco 581 comments · 17 Years

About 6 years ago

I hope they don’t remove this ability for existing subscribers. I bill everything I can through iTunes/the App Store since iTunes gift cards seem to be on sale for at least 15% off like every other week. It’s an easy way to get a discount on subscriptions/purchases. I’m still working off of $1k worth I bought Black Friday two years ago when Costco had them on sale that, when combined with a coupon code, came out to 30% off.

lolliver 497 comments · 10 Years

Being able to purchase discounted iTunes cards to pay for my Netflix and other subscriptions as well as the convenience and security of not having my credit card details stored with multiple providers is not something I want to lose.

Netflix however probably doesn’t need Apple the way some smaller publishers might. If they were to drop support for in-app purchases it probably wouldn’t have much of a negative impact on them.

As as much as it would frustrate me I would probably still continue with my subscription.

SpamSandwich 32917 comments · 19 Years

Apple could always drop the Netflix app from the App Store in Canada, France, Germany, Great Britain, India, Italy, Japan, and South Korea.

rogifan_new 4297 comments · 9 Years

Not surprised. I’d do it if I was Netflix. They don’t owe their success to Apple. It’s easy enough to sign up via the browser.

genovelle 1481 comments · 16 Years

rogifan_new said:

Not surprised. I’d do it if I was Netflix. They don’t owe their success to Apple. It’s easy enough to sign up via the browser.

They have always had this option. If their marketing was sufficiently drawing customers, it wouldn’t matter, because customers would sign directly through them anyway. Apple’s view is if you are offering a free product you are helping grow their platform and deserve to benefit from the marketing they do for their services and platform. On the other hand, if their marketing drives customers to buy via their platform and they are responsible for processing fees and customer service, they deserve a cut. Once a company’s marketing is effective enough to draw customers without Apple they will signup directly anyway and then download the app for convenience.