Netflix No Longer Offering In-App Subscription Options on iOS Devices

[coolfactor]

Because Apple doesn't deserve the 30% of the $7.99 or higher monthly from Netflix or any other company.

Why not? I agree 30% seems high, but it's a standard retail industry markup. As a retail shop owner myself, I purchase products at wholesale prices, and then add a 30-40% markup to arrive at the final selling price.

In Apple's world, it's the opposite... the wholesaler sets the price, and Apple takes 30% out of that — money that supports the immense infrastructure and development needs to deliver the software and hardware we enjoy the content on. I have no qualms about Apple taking a fair cut, but maybe it could be a slightly less given millions of users.

Do you feel Apple deserves nothing, and yet must continue to invest and support the hardware and software with no revenue from it? What do you think a fair percentage would be?

 

[benoitc]

Because Apple doesn't deserve the 30% of the $7.99 or higher monthly from Netflix or any other company.

it's small compared to the paiement to be part of a shop...

 

[Rogifan]

If Apple hadn’t created their model, they would have been paying 60-70% to the telecoms like AT&T. That’s what they required to get an app on their devices

Since when do telcoms make devices? Or are you saying if the App Store never existed Google wouldn’t have created their own App Store?

 

[TriBruin]

Why not? I agree 30% seems high, but it's a standard retail industry markup. As a retail shop owner myself, I purchase products at wholesale prices, and then add a 30-40% markup to arrive at the final selling price.

In Apple's world, it's the opposite... the wholesaler sets the price, and Apple takes 30% out of that — money that supports the immense infrastructure and development needs to deliver the software and hardware we enjoy the content on. I have no qualms about Apple taking a fair cut, but maybe it could be a slightly less given millions of users.

Do you feel Apple deserves nothing, and yet must continue to invest and support the hardware and software with no revenue from it? What do you think a fair percentage would be?

In your world, your 30% pays for your rent, your facilities, your space to display the product, your cost of money. Apple has very little overhead for hosting an App like Netflix. The server farm to serve the App and storage costs are spread out over tens of thousands of Apps. Unlike a physical product, it costs Apple nearly nothing to distribute a million copies of Apps versus 1 copy. Apple has no cost of money to buy the product, because it takes it take AFTER the sale.

For the record, I am not saying that Apple has no costs associated with distributing Apps, but let's not pretend it costs Apple $50 per user per year to distribute the Netflix App.

 

[oneMadRssn]

That's funny after reading your first paragraph.

1. So you bought Netflix credit from some seller on eBay, who sold you credit that was part of a Samsung promotion. Good job paying 3 "middle men" in that case!

2. And thanks for contributing to the price increase you described! $600+ Netflix credit for $100-150 probably means Netflix got much less from your money than from any subscriber who's paying through iTunes.

Hey man, I think like all people, my morals flex for the almighty dollar. Those ebay gift cards were too good of a deal to pass up. Although, I doubt Netflix took the hit. From the way the promotion was advertised, I think it was Sumsung who paid for my Netflix.

 

[Rogifan]

Why not? I agree 30% seems high, but it's a standard retail industry markup. As a retail shop owner myself, I purchase products at wholesale prices, and then add a 30-40% markup to arrive at the final selling price.

In Apple's world, it's the opposite... the wholesaler sets the price, and Apple takes 30% out of that — money that supports the immense infrastructure and development needs to deliver the software and hardware we enjoy the content on. I have no qualms about Apple taking a fair cut, but maybe it could be a slightly less given millions of users.

Do you feel Apple deserves nothing, and yet must continue to invest and support the hardware and software with no revenue from it? What do you think a fair percentage would be?

The bill of materials for an iPhone XS is nowhere near $999. I’m assuming built into the price of an iPhone isn’t just raw materials and R&D but also software costs, which would include App Store. Apple isn’t hosting any Netflix content so I would assume the infrastructure costs associated with it are minimal. And as far as development, isn’t that what the $99 yearly developer fee is for?

 

[travis64]

Just went into my subscriptions and reup it with my itunes money

 

[Michael Scrip]

I disagree with you. Netflix wouldn't have the reach if it wasn't for Apple, a fee should be paid to the exposure each of these companies are having. Apple has made Netflix billions with it's over 1 billion activated devices around the globe, this is all about greed and just watch, Netflix will increase their fees in 2019 even though they're saving 10's of millions.

I'm not sure why you think Netflix's success was because of Apple.

As others have said... Netflix is available on many devices... not just Apple devices.

You can watch Netflix on a Samsung phone, a Vizio TV, an HP laptop, etc. It's available on pretty much any internet-connected video-capable device.

Netflix already had a "reach" without Apple.

In fact... I bet most Netflix subscribers don't have any Apple devices.

 

[Cosmosent]

This is a BIG hit to both AAPL's Upper Mgmt, as well as those so-called Pro Stock Analysts who cover AAPL that have promoting "Services" ... both have Gone Out on a Limb & claimed Services is the Next BIG thing for AAPL ! ... for those of you who don't know, AAPL makes good Coin ONLY from three service offerings: 1.) Games, 2.) Streaming Media "sub" apps, & 3.) now ALSO AppleCare, starting with the Sept 2017 iPhones (& especially the iPhone X).

On Nov 1st, Tim Cook & the company's CFO presented AAPL as a Services company ... the market did NOT buy it ... today's Netflix news isn't going to Bode Well for Tim Cook keeping his job past today !

Netflix does NOT need AAPL, but AAPL definitely needs Netflix !

 

[Gilligan's last elephant]

I and many others have been using Netflix for a lot longer than I've owned any Apple devices so I have to disagree. I don't think Apple did much for Netflix except to take a 30% cut. I think for a service like this 5% would be enough for just hosting the app and accepting a payment.

Exactly. Some people live in an Apple bubble. They seem to forget the majority of people don't t have Apple devices.

 

[LinusR]

The bill of materials for an iPhone XS is nowhere near $999. I’m assuming built into the price of an iPhone isn’t just raw materials and R&D but also software costs, which would include App Store. Apple isn’t hosting any Netflix content so I would assume the infrastructure costs associated with it are minimal. And as far as development, isn’t that what the $99 yearly developer fee is for?

Even though this is certainly true, why should the consumer's convenience of paying using iTunes credit and using the safe confines of iTunes subscriptions not be worth anything? Why would I as a consumer be happy to distribute my credit card details all over the internet (one service here, one service there, etc.)? Now I need to consent to different T&C's, different cancellation clauses etc..

Also, since when are we anti-consumer on MR? This is clearly a disadvantage to consumers (fewer options in this regard don't benefit anyone but Netflix). This Apple-bashing is going too far...

 

[Gilligan's last elephant]

I'm not sure why you think Netflix's success was because of Apple.

As others have said... Netflix is available on many devices... not just Apple devices.

You can watch Netflix on a Samsung phone, a Vizio TV, an HP laptop, etc. It's available on pretty much any internet-connected video-capable device.

Netflix already had a "reach" without Apple.

In fact... I bet most Netflix subscribers don't have any Apple devices.

We started with a ps4.

 

[Baymowe335]

I'd like to know how you come to that conclusion. Attached is gross profit year over year.

Because they own very little content, content costs a mint to buy, content is extremely hard and expensive to create, and competition is increasing. Netflix is burning cash like crazy just trying to obtain and create content.

Netflix also does nothing besides streaming. They don't have theme parks like Comcast (Universal) and Disney or a movie studio like those companies.

Disney is starting their own streaming service in 2019 and can lose money if they have to wait out Netflix.

Netflix has to make money from streaming whereas most competitors are giant conglomerates with far more assets (money), earning power, content, resources, etc.

Netflix still trades at 100X earnings despite losing 40% of its value in the recent selloff, so their current profitability is propping up an extremely high valuation.

 

[Gilligan's last elephant]

In your world, your 30% pays for your rent, your facilities, your space to display the product, your cost of money. Apple has very little overhead for hosting an App like Netflix. The server farm to serve the App and storage costs are spread out over tens of thousands of Apps. Unlike a physical product, it costs Apple nearly nothing to distribute a million copies of Apps versus 1 copy. Apple has no cost of money to buy the product, because it takes it take AFTER the sale.

For the record, I am not saying that Apple has no costs associated with distributing Apps, but let's not pretend it costs Apple $50 per user per year to distribute the Netflix App.

How much money do the TV makers get from the Netflix app built into smart tvs?
[doublepost=1546038621][/doublepost]

Even though this is certainly true, why should the consumer's convenience of paying using iTunes credit and using the safe confines of iTunes subscriptions not be worth anything? Why would I as a consumer be happy to distribute my credit card details all over the internet (one service here, one service there, etc.)? Now I need to consent to different T&C's, different cancellation clauses etc..

Also, since when are we anti-consumer on MR? This is clearly a disadvantage to consumers (fewer options in this regard don't benefit anyone but Netflix). This Apple-bashing is going too far...

How do you pay your utility bills?

 

[iMerik]

Just went into my subscriptions and reup it with my itunes money

I'm wondering if now is a good time to upgrade from Basic to Premium Netflix just to lock it in through iTunes so I can keep paying with discounted iTunes gift cards.

Since "returning customers who have missed a billing period will be unable to reactivate in-app subscriptions," I'm assuming that they also won't let you modify your subscription level up or down and maintain it as an in-app subscription.

I'm going to eventually want more than two screens / two devices that can download shows and will also eventually want UltraHD content, so now is probably the time to just pay the extra $36/year for Premium over Basic.

 

[Rogifan]

Even though this is certainly true, why should the consumer's convenience of paying using iTunes credit and using the safe confines of iTunes subscriptions not be worth anything? Why would I as a consumer be happy to distribute my credit card details all over the internet (one service here, one service there, etc.)? Now I need to consent to different T&C's, different cancellation clauses etc..

Also, since when are we anti-consumer on MR? This is clearly a disadvantage to consumers (fewer options in this regard don't benefit anyone but Netflix). This Apple-bashing is going too far...

Hmm...I buy lots of things using my credit card that don’t go through Apple, including my Netflix subscription. Heck every monthly bill that can go on my credit card does. I’ve never had any issues. Is there something special about iTunes billing that makes it safe but Netflix not?
[doublepost=1546039059][/doublepost]

This is a BIG hit to both AAPL's Upper Mgmt, as well as those so-called Pro Stock Analysts who cover AAPL that have promoting "Services" ... both have Gone Out on a Limb & claimed Services is the Next BIG thing for AAPL ! ... for those of you who don't know, AAPL makes good Coin ONLY from three service offerings: 1.) Games, 2.) Streaming Media "sub" apps, & 3.) now ALSO AppleCare, starting with the Sept 2017 iPhones (& especially the iPhone X).

On Nov 1st, Tim Cook & the company's CFO presented AAPL as a Services company ... the market did NOT buy it ... today's Netflix news isn't going to Bode Well for Tim Cook keeping his job past today !

Netflix does NOT need AAPL, but AAPL definitely needs Netflix !

If Apple really wants to sell itself as a “services” company they’re going to have to show services revenues are more than IAP, iCloud and AppleCare.

 

[LinusR]

How much money do the TV makers get from the Netflix app built into smart tvs?
[doublepost=1546038621][/doublepost]
How do you pay your utility bills?

Not online.
[doublepost=1546039748][/doublepost]

Hmm...I buy lots of things using my credit card that don’t go through Apple, including my Netflix subscription. Heck every monthly bill that can go on my credit card does. I’ve never had any issues. Is there something special about iTunes billing that makes it safe but Netflix not?

This is about online behaviour, I ought to have made that clear -- apologies. What you mean by "safe" is what I described as "convenience". Remember the days when companies tried to hook customers into long term contacts with terrible opt-out and cancellation clauses (just like most utility companies for that matter)? iTunes billing doesn't allow that (it's not perfect either, but there are no hidden T&C's when it comes to subscription payments etc.).

EDIT: Formatting

 

[Michael Goff]

You can get around not signing bad licensing agreements too. There are other (albeit inferior) competitors. In this case people aren't paying the Apple tax, companies are being forced to.

No, you can’t get around using the CDMA standard if you want to make a phone. I do not think you know what you’re talking about.

 

[2010mini]

Because Apple doesn't deserve the 30% of the $7.99 or higher monthly from Netflix or any other company.

Netflix along with many other providers don’t pay 30% to Apple. Apple actively promotes Netflix in the iOS and tvOS App Store and TV app. So why shouldn’t a company like apple that has cultivated such a massive user base, not charge for access to it?

Hey Roku charges Netflix to have their name on a dedicated button their remote. Nothing is free

 

[alphaod]

I cannot say what Apple does or does not deserve. They created an ecosystem and are responsible for its upkeep. I think 30% is the industry standard, but I can see why Netflix doesn't want to share this revenue seeing Apple is competitor to them as Apple is getting into original content as well.

Anyways, you can't buy E-books in Amazon Kindle app for ages, same reason.

 

[LordVic]

Why not? I agree 30% seems high, but it's a standard retail industry markup. As a retail shop owner myself, I purchase products at wholesale prices, and then add a 30-40% markup to arrive at the final selling price.

In Apple's world, it's the opposite... the wholesaler sets the price, and Apple takes 30% out of that — money that supports the immense infrastructure and development needs to deliver the software and hardware we enjoy the content on. I have no qualms about Apple taking a fair cut, but maybe it could be a slightly less given millions of users.

Do you feel Apple deserves nothing, and yet must continue to invest and support the hardware and software with no revenue from it? What do you think a fair percentage would be?

The comparison should be more that Apple in this case is acting more as a payment processor, not a reseller.

As a payment processor, 30% is insane.

 

[WannaGoMac]

This is a BIG hit to both AAPL's Upper Mgmt, as well as those so-called Pro Stock Analysts who cover AAPL that have promoting "Services" ... both have Gone Out on a Limb & claimed Services is the Next BIG thing for AAPL ! ... for those of you who don't know, AAPL makes good Coin ONLY from three service offerings: 1.) Games, 2.) Streaming Media "sub" apps, & 3.) now ALSO AppleCare, starting with the Sept 2017 iPhones (& especially the iPhone X).

On Nov 1st, Tim Cook & the company's CFO presented AAPL as a Services company ... the market did NOT buy it ... today's Netflix news isn't going to Bode Well for Tim Cook keeping his job past today !

Netflix does NOT need AAPL, but AAPL definitely needs Netflix !

Well, depends on how web browser Netflix works on an iPad? For example, would a web browser offer hardware acceleration for battery efficiency?

 

[farewelwilliams]

I like how Apple tries to justify taking 30% cut on subscription services that they neither host nor develop but claim Qualcomm's % licensing agreement is anti-competitive.

the difference is that you don't have to use the in-app purchase route. you could have always asked the user to go to the web to sign up. Apple can't ditch Qualcomm because Intel can't make enough chips. there's no alternative.

i'm not defending Apple's pricing. 30% is ridiculous.

 

[mariusignorello]

Great news. The 30% cut on IAP is absurd. No more milking free money for doing nothing Apple.

For doing nothing except handling payment processing and consolidating billing. Yep, absolutely nothing. Could you think about what you say before you say it, please?

 

[HiRez]

The % needs to go down to maybe 15% max. For independent developers, there is a lot of value in the App Store because they will host, serve, and manage your apps, and handle payment processing, all things that can cost time and money. But even for them, having Apple take 30% of your profits can mean the difference between paying the rent/mortgage and continuing to build your business, or throwing in the towel and going back to work for someone else.

For high volume clients like Netflix, the 30% is untenable because there's a lot less value in what they get from Apple for that large cut. For these types of clients, Apple's cut needs to be probably under 10% (even then they'll avoid it if possible).