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Netflix Permanently Pulls iTunes Billing For New and Returning Users (venturebeat.com)

An anonymous reader shares a report: Netflix is further distancing itself from Apple's 15% iTunes tax bracket. Earlier this year, the streaming giant enabled iOS users in more than two dozen markets to bypass the iTunes payment method as part of an experiment. The company now tells VentureBeat that it has concluded the experiment and has incorporated the change globally. "We no longer support iTunes as a method of payment for new members," a Netflix spokesperson told VentureBeat. Existing members, however, can continue to use iTunes as a method of payment, the spokesperson added. Additionally, the support rep added that customers who are rejoining Netflix using an iOS device, after having canceled payment for at least one month, also won't be able to use iTunes billing. The move, which will allow Netflix to keep all proceeds from its new paying iPhone and iPad customers, underscores the tension between developers and the marquee distributors of mobile apps -- Apple and Google.

48 of 108 comments (clear)

  1. Re: 15% discount by Anonymous Coward · · Score: 1, Insightful

    Did Netflix charge an extra 15% to iTunes Netflix subscribers or did they eat the cost of the Apple tax?

  2. Why should they? by jellomizer · · Score: 3, Interesting

    Netflix has a name for itself. 15% is way too much for a service with that much name behind it.
    For the small company, paying with iTunes is probably a safer bet, as they can bank their payments behind Apples goodwill (This is an accounting goodwill, not charitable goodwill). Customers know Apple payments and more or less trust it is secure or at least if it goes too wrong a big company can backup the losses. But for Netflix this isn't the case. I have just as much trust giving Netflix my Credit Card number as I do giving it to Apple.
    Apple should realize that and probably give them a discount on their fee amount, as the key service they would be offering Netflix would be just payment option convince, which would probably put it in the 5% Territory.

    --
    If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    1. Re:Why should they? by alvinrod · · Score: 1

      15% already makes it seem as though they were getting a discount. Unless Apple changed, I recall the old cut used to be around 30% which was considered pretty standard across platforms like Apple's store. Sure they could go down to 5%, but that just means that everyone else is going to want that same 5% as well and right now it may be better for Apple to lose Netflix entirely than offer even lower rates. If enough companies start to jump ship, I do expect Apple to lower their rate though.

      I don't think it ever made sense for Netflix to use iTunes billing to start with though. They already are capable of handling billing for many of their other customers and are large enough where they can achieve effective cost scaling while doing this so Netflix isn't saying anything. I also doubt that not being able to sign-up through the app is going to turn away many (if any) potential customers.

    2. Re: Why should they? by jellomizer · · Score: 1

      I think you are confused. This is paying for the Netflix service with iTunes instead of your credit card. So you pay Apple and Apple Pays Netflix. This is more akin to why some stores may not accept American Express or Discover, because its processing fees are too high.

      Integration into Apple TV isn't that big of a thing, Apple Rairly cares about Apple TV, they put just a little bit more effort in it then their Macintosh Lineup.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    3. Re:Why should they? by Anonymous Coward · · Score: 2, Insightful

      The biggest issue within iOS relative to this change is that, if you do not accept Apple's tax on the digital good/subscription (which is why the percentage is lower; subscriptions get a reduced percentage), then Apple prevents you from using your own billing systems and Apple also blocks your app from telling users how to become subscribers, such as by linking to your website and using a browser.

      That's the risk that Netflix has been weighing: do they have the clout to get users to simply -- out of likely frustration -- go to netflix.com via the iOS device's browser and subscribe, or did they need to accept the 15% cut that Apple takes, thereby making it a seamless experience that never has to leave the app or require the user to figure things out themselves.

      It sounds like they finally decided that they had the clout. I can only hope that more businesses do this and stop giving into Apple's egregious system (and I say this as an iPhone 8 using and Apple Watch 4 wearing user).

    4. Re:Why should they? by 93+Escort+Wagon · · Score: 3, Informative

      15% already makes it seem as though they were getting a discount. Unless Apple changed, I recall the old cut used to be around 30% which was considered pretty standard across platforms like Apple's store.

      A while ago Apple changed their policy - it’s 30% during your app’s first year, then 15% afterward.

      Shortly after Apple made that change, Google matched them.

      --
      #DeleteChrome
    5. Re:Why should they? by SuperKendall · · Score: 2

      Netflix has a name for itself. 15% is way too much for a service with that much name behind it.

      I agree that at this point Netflix is so big they probably do not need iTunes...

      But I do wonder if they will loose some subscribers as a result, for those who simply do not want to use other billing methods...

      I would never have subscribed to HBO for example without iTunes, because of the risk of canceling being too annoying. But even though iTunes obscures where you go to cancel subscriptions, I feel a LOT better paying for something where I don't have to give a company like HBO any of my payment details, and know that canceling will work properly without fuss.

      --
      "There is more worth loving than we have strength to love." - Brian Jay Stanley
    6. Re:Why should they? by inking · · Score: 1

      The way you subscribe might be an issue. Amazon Video does what Netflix is starting to do and it’s a royal pain in the ass to use their iOS app. If the movie is included into your Prime subscription, you’re fine. If it’s not, you find it, figure out that you have to buy it separately, close the app, go to Safari, open Amazon, find it again among mountains of trash you don’t need, buy it and only then watch it in the app. It’s a ginormous pain in the ass.

    7. Re:Why should they? by tlhIngan · · Score: 1

      I would never have subscribed to HBO for example without iTunes, because of the risk of canceling being too annoying. But even though iTunes obscures where you go to cancel subscriptions, I feel a LOT better paying for something where I don't have to give a company like HBO any of my payment details, and know that canceling will work properly without fuss.

      This is actually a very interesting point. And probably a good chance why companies HATE using Apple as the payment processor. Because Apple first hides payment details from them and even goes as far as obfuscating details about you to them (unless you grant Apple permission to share your details with them). In effect, Apple gives them a a user ID and only says "User ID NNN paid for X months service".

      If you cancel, Apple may tell them "User ID NNN cancelled service" or nothing at all, simply failing to tell the service that you paid for more months of service.

      This has a very nice side effect in that you can cencel service without a ton of BS. None of this "phone us to cancel" or made to sit th rough 15 minutes of retention spiel to cancel. You simply flip the toggle from On to Off and that's it. At the end of the month when your subscription expires, you're cancelled.

      And none of this BS where they will covertly charge your card hoping you don't notice, charge you and then make you wait 3 months for a refund, etc. All while having to deal with customer service on hold for an hour each time.

      So yeah, subscription services HATE Apple. Not just the 30/15% cut, but because they can't do last-minute attempts at retention, can't make it hard to cancel (yes, California makes it possible to do it online, but I'm sure there are loopholes), and can't do extra billing BS that make it possible to cancel and they still charge you requiring you to go through trouble to get money back. Apple makes it easy as flipping a switch and you're cancelled.

      No dealing with anyone, no dealing with extra payments (you told Apple you don't want Apple to charge you for service, so they won't, and thus, Apple won't pay the subscription service). And it takes 30 seconds to do. Might be buried, but it's buried in the settings. Not buried deep inside a provider's set of web pages where "Cancel" means having to find the hidden "No, really, just cancel" link among dozens of "How about some special offers" and "Are you really sure" mazes.

    8. Re: Why should they? by Anonymous Coward · · Score: 1

      The reason Apple requires app payments only thru iTunes in its apps is to reduce fraud and protect their customers. People will by assume any payment coming through an app has some sort of security and if something goes wrong like their cc gets stolen will blame Apple. Allowing shady companies to "charge" customers is a much bigger negative to Apple than Netflix having users go outside of the app because then customers are more likely to understand its Netflix they are dealing with not Apple.

      For many small companies the trust factor is worth more than the 15% fee, for companies like Netflix or Amazon not so much.

    9. Re: Why should they? by Impy+the+Impiuos+Imp · · Score: 1

      Producing a physical TV that doesn't have integrated alternative services is such a winner nowadays, too!

      --
      (-1: Post disagrees with my already-settled worldview) is not a valid mod option.
    10. Re:Why should they? by Paradise+Pete · · Score: 1

      I have just as much trust giving Netflix my Credit Card number as I do giving it to Apple.

      I already give it to Apple, so for me I want to avoid giving it to anyone else. Even if Netflix is an equal risk, it still doubles it.

    11. Re:Why should they? by Paradise+Pete · · Score: 1

      If the movie is included into your Prime subscription, you’re fine.

      Unless you travel outside the US. Then 90% of the titles are "not available in your area," and the only way to know which ones is by actually trying to watch one. Before that moment there's no indication at all. It's close to useless. Ridiculous customer experience.

    12. Re:Why should they? by inking · · Score: 1

      Don’t worry, it gets worse. You know how Amazon accounts are somewhat interoperable from country to country? An American login will work in the U.K. and some other European countries. Now try opening a Japanese account. It will reject your credentials, because your account doesn’t exist, but reject your email address during the sign-up because it is already used by a different account. You literally have to use a different address or add some dots to your current one if you are on Gmail. The international element of Amazon is by far the worst of the FAANGs. At least Apple lets me keep my purchased apps if I moved country, assuming the dev didn’t have the bright idea that their banking app should only be accessible (and thus updateable) from the U.S. store.

  3. Next Week's Story by nateman1352 · · Score: 1

    "Apple pulls Netflix from App Store; shifts focus to Apple original paid programming"

    1. Re:Next Week's Story by Anonymous Coward · · Score: 2, Insightful

      Wouldn't it be great if hardware manufacturers and digital content creators were separate businesses?

    2. Re:Next Week's Story by CohibaVancouver · · Score: 3, Interesting

      Wouldn't it be great if hardware manufacturers and digital content creators were separate businesses?

      Apple's not new to it, though.

      Back in the day, a Polaroid Camera was dirt cheap,

      What was expensive was the Polaroid film - Because Polaroid wasn't in the camera business - They were in the film business, and you could only put Polaroid film in a Polaroid camera.

      Same reason Kodak ignored the digital camera business, even though they held the patents. Kodak was a film company, not a camera company.

    3. Re:Next Week's Story by jellomizer · · Score: 1

      I don't see Apple to be in a position to do something like this, yet.
      Netflix brand is synonymous with streaming movies and TV. Dropping Netflix would cause iOS users to switch over to Android systems. Netflix is actually mobile systems killer app.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    4. Re:Next Week's Story by 93+Escort+Wagon · · Score: 1

      "Apple pulls Netflix from App Store; shifts focus to Apple original paid programming"

      Apple’s made plenty of stupid decisions lately... but I can’t see them doing something THAT boneheaded.

      --
      #DeleteChrome
    5. Re:Next Week's Story by jellomizer · · Score: 1

      There is in general way too much control by the media companies.

      Comcast owns NBC, Comcast owns the Cables that goes to your house that you use for TV and Internet. ATT, Dish TV...
      The problem is we just want to pay 1 bill vs. Paying a bill for each channel we want to subscribe to, pay for the cable company which puts them into one feed, paying for the cable infrastructure.

      Think of the old dial-up internet. You paid for your ISP, your phone line, and sometimes a separate long distance service, all on separate bills. Now it was annoying for bills, but it was good for the customer, as we could find competition in some areas, or disconnect service we don't want or need.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    6. Re:Next Week's Story by Actually,+I+do+RTFA · · Score: 1

      Instead of being separate businesses (which still allows for sweetheart deals), why not just have legally enforced content neutrality.

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    7. Re:Next Week's Story by GrumpySteen · · Score: 1

      I, for one, would love to see what cult-like Orwellian crap Apple would shit out and call original programming for their users to watch.

      I'm betting it would give Scientology ads a run for their money.

    8. Re:Next Week's Story by Kjella · · Score: 1

      Instead of being separate businesses (which still allows for sweetheart deals), why not just have legally enforced content neutrality.

      Eh? What does that mean, does Netflix have to offer an OS/2 and BeOS version of their client? Does Apple have to make Apple Music work on Android? I really don't see how it would be functionally possible to require all content to be playable on every device/OS. And as far as I know Apple is charging Netflix the same they'd charge any Netflix-like competitor, neutrality just means it's the same terms for everyone.

      --
      Live today, because you never know what tomorrow brings
    9. Re:Next Week's Story by gnasher719 · · Score: 1

      "Apple pulls Netflix from App Store; shifts focus to Apple original paid programming"

      There are two possibilities: Netflix followed the App Store rules, or they didn't. If they didn't follow the App Store rules (which is unlikely), they will be pulled.

      The App Store rules are quite simple: If you pay through the app, you have to pay through the App Store. You cannot have a link in your app that leads you to a different payment method. You can have a website with different payment methods, that's absolutely fine, but you cannot link to it from the app.

      If users cannot figure out how to pay Netflix, those users will be lost as customers.

    10. Re:Next Week's Story by Actually,+I+do+RTFA · · Score: 1

      It would mean that Apple couldn't offer better terms to Apple Music, etc. than to Netflix. Fixed public pricing for all content providers.

      --
      Your ad here. Ask me how!
    11. Re:Next Week's Story by GrandCow · · Score: 1

      Does Apple have to make Apple Music work on Android?

      They already have: https://play.google.com/store/apps/details?id=com.apple.android.music&hl=en_US

      --
      "Well kids, you tried your best, and you failed. The lesson is, never try." -Homer Simpson
    12. Re:Next Week's Story by squiggleslash · · Score: 1

      You're talking about a company that removed headphone jacks from the line of phones it (in part) uses to sell music. Yes, they are dumb enough to remove Netflix...

      --
      You are not alone. This is not normal. None of this is normal.
    13. Re:Next Week's Story by rtb61 · · Score: 1

      You are confusing content and consumables. Film by no imaginable way is content, it is a consumable, there is a huge difference between content and consumable, even one negating the other, ie toilet paper and faeces, a fun simile for current Hollywood content, whether film or digital storage, toilet paper or a Japanese style toilet, I suppose.

      They are simply competing electronic publishers and even if it cost Netflix more, why feed you competing enemy if you do not absolutely need to. Apple has to choice to compete against Netflix it has to separate it's publishing from it's hardware but if it does that it reduces it's opportunity to sell it's hardware with higher profit margins, the country club price for the digital country club set, nothing wrong with that.

      --
      Chaos - everything, everywhere, everywhen
    14. Re: Next Week's Story by registrations_suck · · Score: 1

      Why?

      I would find that to be a huge pain in the ass.

    15. Re:Next Week's Story by drinkypoo · · Score: 1

      Apple has to choice to compete against Netflix it has to separate it's publishing from it's hardware but if it does that it reduces it's opportunity to sell it's hardware with higher profit margins

      They already have done. You can rent media from Apple on iTunes.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  4. Re: 15% discount by jellomizer · · Score: 1

    Because it doesn't cost Apple money to transfer from your account to an other. There is a big infrastructure behind it with security settings, rules, and risk from fraud...

    When you buy the hardware you paid for the hardware, and you actually paid for the software updates and security fixes too, factored in in the price. The locking down to the store, isn't a guarantee revenue from you either, the free apps on the store are available to you for free, at apples loss.

    Now 15% for Netflix seems too high. But Apple is a for profit company. They are not going to give too many freebees away, especially when they know their customer is making money off of them.

    --
    If something is so important that you feel the need to post it on the internet... It probably isn't that important.
  5. Re: 15% discount by Anonymous Coward · · Score: 1

    That's not a legal contract in the US. The ones I've read say that they may not upcharge for using the credit card. So, the VISA price is the same as the store price, which is the retail price. The difference is subtle, but legally important.

  6. Re: 15% discount by YouGotTobeKidding · · Score: 1

    Actually it is. The CC price is the 'real' price but a company is allowed to offer discounts. Cash discount is entirely legitimate. Before you ask... the big corps dont do it because A) they get a much better deal from visa and mc than smaller companies (usually 1 percent or less). B) it is offset and then some by increased accounting costs C) having more cash at a store means higher theft rates.

    Apple charging FIFTEEN fucking percent is usury.

  7. Re: 15% discount by KixWooder · · Score: 1

    Prior to Apple Music streaming existing, you could buy a Spotify subscription via iTunes and it cost either $1 or $2 (I donâ(TM)t recall exactly) more than buying from Spotify directly.

    --
    I hate fat people.
  8. Re:15% discount by gravewax · · Score: 1

    Customers already were receiving the saving by not being charged an extra 15% for using iTunes.

  9. Re: 15% discount by rmdingler · · Score: 2

    It varies from Stste to State, so it depends on where you live:

    Eleven states—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas—and Puerto Rico have laws that prohibit merchants from charging consumers with surcharges on credit card transactions.

    Ten states—California, Colorado, Connecticut, Maryland, Massachusetts, Nevada, Oklahoma, Washington, Wisconsin and Wyoming—and Puerto Rico have laws that allow merchants to give discounts to encourage consumers to use forms of payment other than credit or debit cards.

    --
    Happiness in intelligent people is the rarest thing I know.

    Ernest Hemingway

  10. Re:Next Week's Story Error 2503 apple windows bug by AndrewFlagg · · Score: 1

    i just wish apple or microsoft would fix the error 2503 bug that keeps coming back again and again when install apps related to iTunes and plugging in iPhones into Windows 10.. crazy relationship there.. let the bug fest continue...until Windows does not let iTunes install anymore with both 32 and 64 bit drivers simultaneously.

  11. Re: 15% discount by bob4u2c · · Score: 1

    So. . . Netflix should raise its rates by 15%, then offer a 15% discount to those who pay with other means?

  12. wondering how long by renegade600 · · Score: 1

    seeing this happen more and more from different monthly subscription services. wondering how long it will be before apple pull the apps from their store.

    1. Re:wondering how long by SeaFox · · Score: 1

      seeing this happen more and more from different monthly subscription services. wondering how long it will be before apple pull the apps from their store.

      It will happen just as soon as Apples decides they don't want those customers anymore.
      There are a lot of other, coincidentally cheaper, devices that will display these third-party services just as good an ones made by Apple. Until Apple starts making original content better than Netflix and HBO (guffaw), Apple will be needing them more than they need Apple.

  13. Re: 15% discount by Anonymous Coward · · Score: 3, Informative

    Cash has to be counted - employee time is not free.
    Cash is a theft magnet (both from employees and robberies) - safes, cameras & other security measures are not free.
    You have to have enough cash on hand to make change. You are constantly getting small denominations and depositing large denominations. Employee time to go to the bank is not free. Armored car delivery (if you are not in an area where it is safe to send employees to the bank) is not free.

    Credit cards can reconcile automatically. They deposit in your account directly. There is no risk of theft of credit card receipts. For many businesses, that 2% is a bargain.

  14. Re: 15% discount by gnasher719 · · Score: 1

    Prior to Apple Music streaming existing, you could buy a Spotify subscription via iTunes and it cost either $1 or $2 (I donÃ(TM)t recall exactly) more than buying from Spotify directly.

    Spotify is of course allowed to have different prices, depending on where you subscribe.

  15. Apple Music came to Android tablet just this month by tepples · · Score: 1

    That's new. Until this month (December 2018), Apple Music worked on Android phones but was deliberately incompatible with Android tablets. (Source: Engadget)

  16. Re: 15% discount by inking · · Score: 2

    Just FYI: cash is considerably more expensive than credit cards once you account for security. A better comparison is accepting Visa and Amex without charging more for the latter.

  17. Re: Apple Music came to Android tablet just this m by tepples · · Score: 1

    Samsung tablets are made by the same manufacturer and run the same version of Android as Samsung phones. The only differences are screen size and inability to dial the PSTN or receive SMS. What "debugging" was needed just to turn off the flag that blocks Google Play Store from offering the application to users of devices with large screens?

  18. Nonsensical, what "chargeback" by SuperKendall · · Score: 1

    Use a gift card? Man, you fan boys are stupid.

    Do feel free to humor me, what the hell do you even mean here. This made zero sense.

    Also, HBO is huge and won't be shady and be difficult to stop.

    Ask me how I know you have never had cable.

    Also, there's a credit card chargeback, even then.

    Even when? What on earth are you talking about here?

    If I subscribe to HBO on iTunes there is no "chargeback". If I cancel HBO when I choose, it finishes out the month I paid for and then it's over - HBO never had my card so they cannot charge anything, Apple simply stops handing over my money to them at that point.

    It is so easy to do in fact I will pretty much never subscribe to anything again without going through iTunes...

    Netflix and Amazon get grandfathered in since I subscribed to them before they offered IOS paths for payment (Ok, Amazon never did) and I don't force ever canceling either. Other services I use from time to time and might subscribe for a few months, then decide I don't need it anymore.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  19. Re: 15% discount by rmdingler · · Score: 1

    Perspective seems to color the interpretation of the law.

    News Channel on your side Florida Florida man tells cops he didn't drink while driving, only at stop signs.

    --
    Happiness in intelligent people is the rarest thing I know.

    Ernest Hemingway

  20. Re: 15% discount by inking · · Score: 1

    Absolutely. Credit cards vs. debit cards without additional fees is an equally good comparison.