Netflix Tests Disabling In-App Subscriptions on iOS in Some Countries

[MacRumors]

Netflix is already one of the highest grossing apps on the App Store, as many iPhone and iPad users pay for their subscriptions via iTunes/Apple ID billing, but the streaming video platform wants an even bigger piece of the pie.

TechCrunch today reported that, until September 30, new or lapsed subscribers in some 33 countries will be unable to pay using iTunes.

The countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Finland, France, Germany, Hungary, India, Italy, Indonesia, Japan, Korea, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Slovakia, South Africa, Spain, Sweden, Taiwan, Thailand, and the UK.

A customer service representative for Netflix confirmed the test with TechCrunch:

During this time, customers in these countries may experience any of the following when launching the Netflix app on an iOS (mobile or tablet) device:

1. Ability to sign up in app with only iTunes Mode Of Payment.
2. Ability to log into Netflix but not sign up (sign up only via mobile browser).

We are constantly innovating and testing new signup approaches on different platforms to better understand what our members like. Based on what we learn, we work to improve the Netflix experience for members everywhere.

This means that some iPhone and iPad users who open the Netflix app will only be able to sign into an existing, active account, with no option to create a new account. By the sound of it, Netflix is hoping that these users will close the app, and sign up through its mobile website or elsewhere with a credit card.

Apple collects a 30 percent commission--15 percent after the first year--from users who subscribe via its in-app purchase mechanism, so it's pretty clear that Netflix is trying to avoid padding the pockets of one of its biggest competitors, which just so happens to be working on a Netflix-like service itself.

Of note, Apple's App Store Review Guidelines state that developers are not permitted to "directly or indirectly target iOS users to use a purchasing method other than in-app purchase," but it appears that Netflix has worked around this rule by simply not offering new users the option to sign up in-app whatsoever.

We've reached out to Apple for comment.

Article Link: Netflix Tests Disabling In-App Subscriptions on iOS in Some Countries

 

[ghostface147]

Money is money.

 

[Moorepheus]

can't say I blame them. Audible has never allowed you to buy from the app for anything. Why would any company want to lose out on 15% of revenue?

 

[alleggerita]

Your move, Apple. Take Netflix down from their App Store maybe?

 

[pratikindia]

It’s their loss. Most people like me subscribe from iTunes. They will lose lots of people.

 

[Rogifan]

Your move, Apple. Take Netflix down from their App Store maybe?

Why? People aren’t subscribing to Netflix because of Apple.
[doublepost=1534862090][/doublepost]

It’s their loss. Most people like me subscribe from iTunes. They will lose lots of people.

Meh, it’s really easy to subscribe from the browser. That’s what I did when I had a Spotify subscription.
[doublepost=1534862216][/doublepost]

can't say I blame them. Audible has never allowed you to buy from the app for anything. Why would any company want to lose out on 15% of revenue?

Barnes and Noble doesn’t either. Doesn’t stop me from buying books on bn.com. Why should Apple get a cut of B&N book sales? Just because they offer their own book service? I assumed the yearly developer fee is to cover the cost of Apple hosting a free app on the App Store.

 

[bingeciren]

Same with the Kindle. You buy the book on Amazon, and read it using the IOS app on your i-device.

 

[WarHeadz]

It’s their loss. Most people like me subscribe from iTunes. They will lose lots of people.

Lmao, right. I promise you most people don’t subscribe to Netflix through iTunes. Nobody who wants to subscribe to Netflix will avoid doing it because you can’t do it through iTunes, if you think that’s the case you’re living in your own little universe. The only one who will lose out is Apple, losing out on fees they aren’t entitled to anyway and should have never received.

 

[Glideslope]

Looks like someone is becoming very nervous about someone sniffing around with over a quarter of a $ Trillion dollars in cash reserves.

p.s. Keep those adds coming between Series Watching Netflix. A real customer service enhancement.

 

[LordVic]

I can sortof understand Apple charging ~30% for purchasing an app on their store. They host the App afterall.

But taking 15% from subscriptions? 30% from in-app purchases that have absolutely NOTHING to do with Apple except using them as a payment processor is ridiculously high for a payment processor. MasterCard/Visa charges 1-2% of each purchase. Even your run of the mill non standard ones only charge 2-3%. Taking 15% of monthly subscription based services is very high and puts unecessary burdens on those companies.

Apple needs to adjust here to remain competitive. services like Netflix are already small margin and are fairly inexpensive. 15% of your fee can suddenly make the service unprofitable to deliver, and if that's the case, we al lose as the services that aren't profitable go away, even if they're great like Netflix.

Do we WANT Netflix to stop being used on iOS devices? do we want them to just say "it's not worth it" and walk away? of course not. That hurts everyone. Apple needs to realize this isn't 2010 anymore. they no longer have a captive position as the dominant platform.

 

[78Bandit]

Good for them. The bulk of Netflix's costs are going to be content licensing and bandwidth, neither of which Apple provides any benefit. Why should Apple take 30% off the top of an already low gross profit margin business for doing nothing more than acting as a payment mediator?

Maybe this will trigger a discussion where developers who want to offer payment through an in-app purchase can get closer to what Apple or the vendor actually gets charged for running the transaction through the customer's credit card itself. I can guarantee it is less than 3%.

 

[itsmilo]

Kind of surprising considering in their last update the appstore guidelines specifically forbid this:

3.1.3(b) Multiplatform Services: Apps that operate across multiple platforms may allow users to access content, subscriptions, or features they have acquired elsewhere, including consumable items in multi-platform games, provided those items are also available as in-app purchases within the app. You must not directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods must not discourage use of in-app purchase.​

Forbit what exactly? They just removed the subscribe button. They did not replace it with a „subscribe now on your mobile browser“ button.

 

[Moorepheus]

Kind of surprising considering in their last update the appstore guidelines specifically forbid this:

3.1.3(b) Multiplatform Services: Apps that operate across multiple platforms may allow users to access content, subscriptions, or features they have acquired elsewhere, including consumable items in multi-platform games, provided those items are also available as in-app purchases within the app. You must not directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods must not discourage use of in-app purchase.​

So, how does audible get away with this then? Also Barns & Noble as well? Is there more to the rules that you didn't post?

 

[Chuck Kostalnick]

can't say I blame them. Audible has never allowed you to buy from the app for anything. Why would any company want to lose out on 15% of revenue?

It's actually 30% for the first year a person holds a subscription through Apple, and only drops to 15% after the same person maintains a subscription for over 1 year. If the person unsubscribes at anytime, the clock resets for Netflix.

 

[LordVic]

Kind of surprising considering in their last update the appstore guidelines specifically forbid this:

3.1.3(b) Multiplatform Services: Apps that operate across multiple platforms may allow users to access content, subscriptions, or features they have acquired elsewhere, including consumable items in multi-platform games, provided those items are also available as in-app purchases within the app. You must not directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods must not discourage use of in-app purchase.​

you're misreading it.

Apple allows for services purchased elsewhere to be used on APple devices.

What they forbid is intentionally linking you from inside the App to an external site for purchasing. So as long as Netflix doesn't take you out of the App, or provide you a "PURCHASE SUBSCRIPTION BY THIS LINK" they aren't technically violating Apples rules

Currently how Amazon and B&N for exampl are doing it

 

[Chuck Kostalnick]

So, how does audible get away with this then? Also Barns & Noble as well? Is there more to the rules that you didn't post?

Audible (Amazon) is able to achieve this by not mentioning the ability to purchase audiobooks is only available on their website. Instead, their app is just a utility to listen to things you've already purchased. The same is true with the Kindle app, B&N, etc.

 

[Moorepheus]

It's actually 30% for the first year a person holds a subscription through Apple, and only drops to 15% after the same person maintains a subscription for over 1 year. If the person unsubscribes at anytime, the clock resets for Netflix.

Good point.....So why would netfix or anyone else want to give up 30% when they don't have too.

 

[gnipgnop]

This probably just means that Netflix is worried about their costs vs. revenue in the future. It remains to be seen if the model they're using can actually sustain itself in the long run. Netflix could very easily just flame out.

 

[Moorepheus]

Audible (Amazon) is able to achieve this by not mentioning the ability to purchase audiobooks is only available on their website. Instead, their app is just a utility to listen to things you've already purchased. The same is true with the Kindle app, B&N, etc.

Right, and Netflix if going down that path. Like I said, why wouldn't more companies just do this? Its coming, more will follow. It's not that difficult to open up the browser on your phone, go to Netflix, sign up and then use that content on your phone. I do it with Audible, I have a monthly subscription with them, that I can only do via their website, but I can listen too all the books I get via that services on my iPhone. I agree with others, 30% for first year and then 15% after that, it's called High-Way Robbery.

I don't have an Android phone, wonder what their policy's are for these types of services?

 

[Rogifan]

Ben Bajarin (@BenBajarin)
8/21/18, 9:43 AM
Netflix looking to bypass the Apple Store 30% is not surprising, Amazon has done a good job at this, but it brings up an interesting debate about the value of a marketplace and what is fair as a cut for the marketplace provider.

Physical retail cut is 40-50% generally..

OK if this is about a marketplace provider getting a cut of sales then why wouldn’t Apple get a cut of any sales that occurred via an iOS app? Why is it just media (or the cut of a app purchase for non free apps)? If I buy something using the Target app Apple doesn’t get a cut. If I pay for an Uber using their app Apple doesn’t get a cut. But they should get a cut of books, movies, music, magazines? Why? Just because Apple competes directly in those categories?

 

[Moorepheus]

you're misreading it.

Apple allows for services purchased elsewhere to be used on APple devices.

What they forbid is intentionally linking you from inside the App to an external site for purchasing. So as long as Netflix doesn't take you out of the App, or provide you a "PURCHASE SUBSCRIPTION BY THIS LINK" they aren't technically violating Apples rules

Currently how Amazon and B&N for exampl are doing it

I guess this part is what confuses me about the policy and maybe others.

Multiplatform Services: Apps that operate across multiple platforms may allow users to access content, subscriptions, or features they have acquired elsewhere, including consumable items in multi-platform games, provided those items are also available as in-app purchases within the app.

 

[Chuck Kostalnick]

I don't have an Android phone, wonder what their policy's are for these types of services?

It's the same for Google Play.

 

[Xgm541]

It’s their loss. Most people like me subscribe from iTunes. They will lose lots of people.

So if you use and enjoy Netflix, you'll stop enjoying and using it because you'd have to go to their website to subscribe?

Also, your current subscription is not affected. Only new ,and lapsed (expired) subscriptions are going to have to go through the netflix website.

 

[Loge]

Understand their reasons but it's a bit much to describe it as "improving the Netflix experience".

 

[Rigby]

The little angel on my left shoulder says "Netflix deserves to get the full price". The little devil on the right shoulder says "but you can save 15-20% by using discounted iTunes gift cards". And there is faint laughter in the distance that sounds like Tim Cook.