Netflix cuts Apple out of its cut of subscription fees for new and rejoining subscribers

Netflix cuts Apple out of its cut of subscription fees for new and rejoining subscribers
According to the Netflix billing FAQ page for iTunes (via Venture Beat), new and rejoining members of the streaming video app for iOS will no longer be allowed to pay their subscription fees inside the app. This decision comes after Netflix removed the in-app subscription option for the iOS app in over two-dozen markets as a test. Late last month, the streaming content provider quietly made this change globally. A Netflix spokesman said, "We no longer support iTunes as a method of payment for new members."

Existing iOS subscribers will still be allowed to make in-app payments as long as they haven't canceled their subscription for a month or longer. If you're curious why Netflix is doing this, it is because Apple (like Google) takes a 15% cut of subscription revenue generated in-app in the App Store (down from 30% a couple of years ago). Back in May, Netflix stopped allowing new and rejoining Android users to pay inside the Netflix app found in the Google Play Store. Those iOS users interested in subscribing to Netflix for the first time, or who want to subscribe again after an absence of a month or longer, will have to do the same thing that Android users in the same situation do; they go to the Netflix website to sign up and pay.

Plenty of money is as stake here. After all, Netflix remained the top grossing app last month among all apps in the App Store and Google Play Store combined. It also was also the top revenue producing app in the App Store alone.

Netflix no longer allows new or rejoining subscribers on iOS to pay their subscription fees in-app

Netflix no longer allows new or rejoining subscribers on iOS to pay their subscription fees in-app

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69 Comments

1. middlehead

Posts: 448; Member since: May 12, 2014

Good. Neither Apple nor Google deserves any piece of a subscription they've got zero part in delivering.

3. splus

Posts: 148; Member since: Nov 26, 2011

But then they DO have a part in delivering the app itself, which is substantial. And if the app is free then neither Play or App Store make any money on it. My guess is that both stores will think of some other solution for such cases - why would they list a free app on their stores that makes money but they don't get a cut?

4. L0n3n1nja

Posts: 1525; Member since: Jul 12, 2016

Plenty of other free apps in the play store helping companies make money, where would you draw the line. Besides I doubt either Google or Apple would want Netflix removed from their app store. It's a very popular app and just ask Microsoft how lacking popular apps turned out.

5. bambamboogy02

Posts: 834; Member since: Jun 23, 2012

About time they got smart. Why should Apple or Google get a cut of others revenue? They only host the app, just like the million others.

6. splus

Posts: 148; Member since: Nov 26, 2011

That's a ridiculous statement. Should any grocery shop not make any money and sell all the stuff for exactly as much money as they get it for? I'm not saying App stores should take as much cut as they do now, which I think is too much! I'm saying I suspect both Apple and Google will find some other mode of sharing for big apps and games, such as Netflix and recently Fortnite.

20. Leo_MC

Posts: 6894; Member since: Dec 02, 2011

The supermarkets get just as much from the grocery sellers.

27. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

No they don't. They make money through volume sales. This that provide groceries, pay for shelf space and the store is not getting 30% of the purchase price either.

48. Leo_MC

Posts: 6894; Member since: Dec 02, 2011

Again, you don’t have a f**king clue. Even Amazon - which is a virtual supermarket - takes from 20 to 40%.

62. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

Actually you are the one who doesn't know what he is talking about. I've sold merchandise on Amazon, EBay and other sites and I know what they take. Fact - Amazon takes 6%-20%. They take 45% of it is an Amazon device. D So as a seller, if I sell Amazon specific products like Alexa Dot or Kindle, they get 45% of the sell. Amazon charges a referral fee based on what percentage is higher. Most times it's an outright 15% charge. Hosting a physical product on a shelf is not equal to hosting an app on a server. Apple should charge a merchant fee and maybe a hosting fee. Charging 15% when your only option to download iOS the app store. Apple should get paid, but 30% on a purchase on an app you never even worked or developed is pure ripoff. 15% I think OS to high when you consider the majority of apps are on $.99 each. If you take 30% of a dollar, that leaves not much for the actual developer

63. Leo_MC

Posts: 6894; Member since: Dec 02, 2011

Amazon takes an average of 15% of sales (just like Apple after 1y) for the simple fact that it’s allowing the seller to access it’s huge client base but Apple is bad for doing EXACTLY THE SAME f**kING THING. Your hatred makes me feel sorry for you...

21. RebelwithoutaClue unregistered

We're talking about subscriptions here, not buying an actual app. Would you be fine with a grocery shop taking 15% cut of a magazine subscription just because you bought the initial magazine in the shop? Besides, it's not like they are doing something illegal here, it's not mandatory to offer subscriptions from within the app.

28. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

Don't waste your time with him. He doesn't understand the difference. To him a purchase is a purchase.

39. NarutoKage14

Posts: 1312; Member since: Aug 31, 2016

That would be an acceptable model. Give the app store their cut with only the first month or two of subscription.

37. bambamboogy02

Posts: 834; Member since: Jun 23, 2012

Grocery stores purchase product at what ever cost, and sell it for a marked up price for a profit. Apple and Google don't purchase apps for their app stores. Google and Apple do nothing but host apps that the developers make for the respective platforms. Why should either company get any money from any subscription service they have no part in? All subscription apps should be set up independent of either company getting money. These apps get no extra benefit from other free apps either company is hosting.

38. NarutoKage14

Posts: 1312; Member since: Aug 31, 2016

Maybe because hosting and delivering those apps costs them money.

43. bambamboogy02

Posts: 834; Member since: Jun 23, 2012

If hosting apps is an expense, it's not an app developers fault, especially down the line. That's being far to greedy. Google and Apple boosted about having more apps at one point, remember that pissing contest? More apps per platform means more users on that OS, which in turn produces $$ for the respective platforms on their business models. How is it fair that a free app can be hosted and treated the same as one that Google or Apple is receiving a revenue cut from. What extra service/promotion/product placement/preference advertising on the App Stores are they giving those apps that the free ones are not getting?

31. izim1

Posts: 1594; Member since: Feb 04, 2013

Microsoft never had issues growing nor a lack of apps. Unless you mean their failed winmo platform. In which case, Apples and oranges. That's what youre trying to compare by bringing it up. Remove from app store =/= completely lacking from the OS. Specially with android where you can easily sideload apps. Netflix would have next to no problem just offering the app on their site if Google removed it from their android app store. Same for hulu and hbo and any other major subscription based streaming service that currently has an app in the google app store. Wouldn't really hurt google at all of they removed it from their app store.

33. Atechguy0

Posts: 918; Member since: Aug 03, 2018

Since day one Android users could always bypass Google's cut for Netflix. Apple is the one that doesn't allow anyone to bypass their fees, especially if an app requires monetization.

26. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

You don't have to download any app through Google Play. Many APKs for apps that are free to download, are available wverywhere. Both Netflix and Spotify made good moves. Since Android apps can be downloaded via the browser, like every OS accept iOS can do, all these files should be made available on the site of the developer.

2. lyndon420

Posts: 6589; Member since: Jul 11, 2012

It's available through my cable tv provider. I'd much rather give Netflix their money directly, as opposed to sacrificing a big chunk to those who simply host Netflix's app!! Netflix can stand on their own if they choose to do so...no need for Google or Apple!!

8. Leo_MC

Posts: 6894; Member since: Dec 02, 2011

Why would you care where the money goes? it’s the same money you’re paying. You do realize that, if Apple and Google suddenly find a legal and/or economical viable way to kick the app from the store (and stop people from side loading), Netflix value will go down like a rock in a pond?

13. mixedfish

Posts: 1547; Member since: Nov 17, 2013

Keep that attitude going and pretty soon Netflix will raise it's subscription costs.

15. Leo_MC

Posts: 6894; Member since: Dec 02, 2011

I don’t care; I go to the cinema when I want to see a good movie (I prefer to go see a play); when I’m at home I like to talk to my family, play games with my dog, love my beautiful girl.

14. AngelicusMaximus

Posts: 642; Member since: Dec 20, 2017

No offense, but that is a ridiculous argument. Of course I care about the who the money is going to. When I go to a restaurant to eat & get good service, you're damned right I want my server to get the money I tip him/her for that excellent service. Would I be upset if I found out it was going to someone else? Of course. Or a better analogy in this case would be, if I knew there was a way to ensure that my server was getting a bigger piece of that tip, would I do it? Of course.

17. Leo_MC

Posts: 6894; Member since: Dec 02, 2011

I see. Well you might care but I don’t even know who builds the parts of my car...

19. Awalker

Posts: 1967; Member since: Aug 15, 2013

That's why I tip with cash. At that point the server decides what happens with the tip.

24. AngelicusMaximus

Posts: 642; Member since: Dec 20, 2017

I do too because I used to be one.

40. NarutoKage14

Posts: 1312; Member since: Aug 31, 2016

Here some advice. If you are going to tip someone, do it in cash and directly to the person you intend to tip.

41. AngelicusMaximus

Posts: 642; Member since: Dec 20, 2017

You missed post #24.

34. tedkord

Posts: 17181; Member since: Jun 17, 2009

We care where the money goes because we value the service, and if the service isn't profitable it goes away. That is just common sense. Google isn't going to stop sideloading.

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