Netflix's New iTunes Billing Policy Will Curb a $256 Million Revenue Stream For Apple (venturebeat.com)

Early last year, Netflix allowed some iOS users in more than two dozen markets to bypass the iTunes payment method as part of an experiment. The streaming company is now incorporating the change globally, curbing a $256 million revenue stream for Apple. "According to new data compiled by Sensor Tower, Netflix grossed $853 million in 2018 on the iOS App Store," reports TechCrunch. "Based on that figure, Apple's take would have been around $256 million, the firm said." The new policy change allows Netflix to avoid paying the 15% levy that Apple charges on in-app subscriptions. From a report: "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.

The company did not share exactly when it rolled out the change globally, but a support representative VentureBeat spoke with pegged the timeframe as late last month. 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.

Comments

Re:How long before Apple turns them off?

[Richard_at_work]

It's not in breach of Apples TOS - what Netflix is doing is allowed and has been since day one, see Amazons Kindle app which does the same (can't buy books or take out a Prime subscription through it, but can consume paid for content via it).

Re:30% are simply robbery

[ThosLives]

I'll give you unknown actual value to the customer and no competing storefronts, but not zero overhead (servers and managing payment isn't free by a long shot).

But the 30% / 15% or whatever Apple or Steam or whoever charges the publisher isn't based on their cost, or even the value to the customer - it's based on the value to the person wanting to sell. That's what value pricing means.

If I was a content creator 5 years ago and my choices were to hire a place to press media and stock shelves, roll my own sales site including setting up merchant agreements, or just pay Apple or Steam 30% of the sale price, it's a no-brainer to go for the 30%.

Today it's a bit different - there are enough alternative distribution mechanisms that 30% is no longer the no-question deal. Bigger companies like Netflix can now afford the infrastructure at a lower cost, and alternative storefronts can now offer lower rates too. Even talking about the "Apple monopoly" I think is a red herring - nobody, even with all the lock-in efforts, truly has that much loyalty to not jump ship to other ecosystems (consider the recent revenue stuff in the press).

But if you're an indie game developer - tell me how you're going to get better total revenue than Apple or Steam or Google Play or whatever even with their 30% take. On how many storefronts do you want to have to ensure your product is up to date?