Apple scrambled to convince Netflix to keep in-app subscriptions

Credit: Thibault Penin

In 2018, Netflix killed off the ability for new subscribers to sign up for the service within its iOS app. Although Netflix didn't explain why, it was likely a way to avoid paying Apple's 30% commission on in-app purchases.

Once Apple learned of Netflix's plan to stop offering in-app subscriptions, it started an internal dialogue about the move and tried to get Netflix to reconsider, according to emails and documents first seen by 9to5Mac.

In 2018, for example, Netflix ran a trial to understand the value of removing in-app subscriptions in some markets.

Carson Oliver, Apple's Director of App Store Business Management, wrote at the time that Apple "expressed our concern that running the test would create a bad customer experience for app users in those markets and limit co-marketing opportunities."

Oliver also made reference to a "churn issue" among subscribers on iOS. In other words, more users who signed up for Netflix on iPhone or iPad stopped subscribing than users who subscribed elsewhere.

Additionally, Oliver also asked other participants in the email chain if Apple should take "punitive measures" in response to the trial. He also questioned how those measures could be communicated to Netflix.

Other emails in the thread indicate that Apple executives held a variety of meetings with Netflix to discuss the test. Some of the meetings included discussions about coming to a "middle-ground solution" for the Apple TV — a solution that apparently was never found.

One of Apple's attempts to convince Netflix to stick with IAP included a detailed presentation that justified the App Store commission and offered a variety of supposed benefits to keeping in-app subscriptions. In the presentation, Apple attempted to woo Netflix by highlighting the various ways it had driven subscribers to the service or featured Netflix in App Store editorial content.

Additionally, the presentation offered a variety of solutions that Apple and Netflix could work on together, including an Apple TV bundle, in-depth performance data, and an option to join a "video partner program." Other ideas included in the slide deck revolve around deeper partnerships, including marketing Netflix at Apple retail locations or sending out email campaigns promoting the streaming service.

Apple's attempts to convince Netflix ultimately proved fruitless. However, just a year later, the Cupertino tech giant launched its Apple TV+ service, bringing the company into direct competition with Netflix.

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