Netflix users cannot pay for the company’s services through the Apple App store. This is part of Netflix’s test run for its iOS app which is implemented in almost 30 countries. By disabling the pay through Apple’s app store, the company can skip paying the tax that Apple levies on subscriptions.
Netflix’s new test
Netflix is running this test on its iOS app which happens in around 33 countries. This figure as reported by the Indian tech news website Gadgets 360 does not include the United States. When the users of Netflix in countries such as Canada, Germany, Brazil and Great Britain download Netflix’s iOS App, they will have 2 options, unlike the previous ones. These two options will include sign up and subscribe through Apple’s App Store or sign up through Netflix’s site directly.
Netflix has included this option which will pave the way for cutting down the subscription fees tax to Apple. If users choose the second option, Netflix can save up their revenue avoiding the Apple fee. The charge levied by Apple for its app partners 30% of the subscription revenue applicable for the first year. In the upcoming years, the charge is reduced to 15%.
Subscription via apps has become a flourishing business for Apple. The company’s CEO, Tim Cook recently revealed that about 300 million people now use Apple’s App Store in paying app subscriptions. This has helped the tech giant’s service revenue to climb up 31% over the years and making it to $9.6billion in the June 30 quarter.
Netflix is not the first to try this out. A while ago, Spotify had forced its users to sign up directly. When the company gave an alternate option to sign up instead of the App Store, Apple hinted on removing Spotify’s app from its App Store. The reason stated for this suggestion is that Spotify was trying to “circumvent in-app purchase rules.” While both the companies were successful in clearing the issue, Spotify has removed the option of paying for subscription through the App Store for the new subscribers.
Netflix has stopped payment via Google Play billing for both it’s new and existing users who were reported by TechCrunch. What started as a test run for Netflix in 10 countries now is spread out to 33 countries and is expected to happen during the time frame of Aug 2 to Sept 30.
Netflix is known to run tests frequently when it comes to pricing and features and hence it is not sure whether the test run will be implemented globally. The recent test run of introducing commercials between episodes was not received well by the audience. The TechCrunch report mentions that the Netflix test run for the billing is happening in countries such as Argentina, Australia, Austria, Belgium, Brazil, Canada, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Finland, France, Germany, Great Britain, Hungary, India, Indonesia, Italy, Japan, Korea, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Slovakia, South Africa, Spain, Sweden, Taiwan, and Thailand.