Netflix is looking to avoid paying Apple a cut from its subscriptions

Netflix is looking to avoid paying Apple a cut from its subscriptions
Having your app on Apple’s App Store has its price, and for most companies that means a 30% cut from transactions made through iTunes. 30% is no small part and, unsurprisingly, companies are looking for ways to minimize the amount of money that goes to Apple. It seems that Netflix is on that path as well.

The way Netflix would prefer people pay their monthly fees is by logging in directly to its website and paying there. The video streaming company is now testing the new billing options in 33 countries, including Canada, France, Germany, India and Japan. Netflix has been using this option for the same purposes on Android for new and rejoining customers for the last three months.

The change shouldn’t affect users, besides the slightly less convenient way to pay for your subscription, as Netflix will likely use Apple’s cut to cover its own expenses. The company has been looking for additional revenue streams and experimenting with ads to make up for stagnant subscriber numbers.

Netflix is not the only streaming service that’s choosing to avoid Apple, Spotify is now only accepting subscription payments through its own website as well, after it decided to stop charging iOS users more for the same service, to cover some of the revenue lost to Apple.

In both cases Apple doesn’t have an interest in renegotiating a smaller cut percentage, since that will make Netflix and Spotify more competitive with its own iTunes. However, the lost revenue from the streaming services has probably made Apple think about ways to close the “loophole” the companies are using.

source: TechCrunch

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14 Comments

1. Dr.Phil

Posts: 2488; Member since: Feb 14, 2011

30% is a pretty high fee when you think about the fact that most credit card companies charge only about 1.6% on average for their transactions at a business. I have a feeling that once Apple TV is up and running with it’s streaming service that you’ll see Apple try to artificially lower its price for iOS customers versus the competition. Which would be very petty and wrong in my opinion.

3. Atechguy0

Posts: 918; Member since: Aug 03, 2018

It's amazing how Google was painted by Epics Fortnite with articles from PhoneArena and others. With stories that Google is losing 50 million in revenue from Epic going around Google's play store. Even though companies could always get around paying Google their 30% fees. Google never FORCED that on anyone. Yet here this is a lot more revenue that Apple will lose overall, than the game Fortnite could ever generate. The 30% fees were always ridiculous. They should have been reduced years ago. As far as Apple TV is concerned they only have a fraction of the TV market that is actually out their. I believe throughout the entire history of Apple TV they have only sold a total of 25 million boxes. That's from the first gen to the current 4k Apple TV. That number might sound big, but that number is trivial when compared to the what the competition has sold.

10. Finalflash

Posts: 4063; Member since: Jul 23, 2013

This is a trend that will hurt Apple in the long run. If bigger companies begin to bypass Apple's tax that will eventually lead to huge losses since most of Apple's Appstore revenue comes from major publishers. Google on the other hand always had alternative payment methods available and also makes most of their money off of other services. At least Apple will hopefully not be able to make their pretentious "How much we paid out to developers?" slide in their presentations. As if they developer didn't earn it and Apple paid them out of their benevolence.

2. SIGPRO

Posts: 2817; Member since: Oct 03, 2012

And the sh!t is just piling up! Apple is just a greedy company!

4. NateDiaz

Posts: 1092; Member since: Mar 03, 2018

Is that the reason why Fortnite wasn't released on Android?

5. Back_from_beyond

Posts: 1473; Member since: Sep 04, 2015

Fortnite is a terrible game anyway, not much of a loss there

6. xq10xa

Posts: 810; Member since: Dec 07, 2010

yeah....not much of a loss................lol

7. Rager722 unregistered

It's on Android as of 2 weeks now

8. NarutoKage14

Posts: 1347; Member since: Aug 31, 2016

I thought Apple didn't allow apps if the creator allowed payments through their own websites? I'm guessing Apple no longer blocks this.

9. MarvzIsFallen

Posts: 646; Member since: Aug 11, 2017

It’s apple store, if they don’t want to put their apps in their so be it. You think its like playstore that most consumers wanted free apps, no! App Store is so successful because of the cut by apple. Its for maintaining and improving the store unlike play store full of junks, scams, ads, viruses, second rated apps, and fishing apps.

11. Atechguy0

Posts: 918; Member since: Aug 03, 2018

Such BS. The 30% cut is for Apples bottom line. As far as the Google's play store is concerned they never FORCE developers app to go through them. Apple is the only one that FORCES that. Also free apps can generate a lot more ad revenue with Android, then they could ever generate with iOS. Android has 85% marketshare to Apples 15%. So it makes total sense for free apps to make a lot more ad revenue than a free app on iOS.

12. midan

Posts: 3121; Member since: Oct 09, 2017

"Also free apps can generate a lot more ad revenue with Android, then they could ever generate with iOS. Android has 85% marketshare to Apples 15%. " And yet it doesn't happen.

14. Atechguy0

Posts: 918; Member since: Aug 03, 2018

Free apps it certainly does. Look it up yourself.

13. Man_Utd

Posts: 190; Member since: Feb 03, 2015

Netflix should do what most companies do... pass the additional cost to their customers. If Apple customers aren't happy about it, complain to Apple or vote with their wallets.

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