Netflix To No Longer Accept iTunes As a Form of Payment On Apple Devices
A Rough Festive Period For Apple
Signing up to Netflix used to be an easy task. All you did was authenticate and link it to your iTunes account and your subscription would begin almost immediately. This won’t be a case anymore, though.
If you’re a new subscriber, or one who had a previously cancelled subscription, you’ll find that iTunes is no longer a form of method in your Netflix App.
The decision seems strictly financial – Apple, as the manager of Apple’s App Store ecosystem, charges a whopping 15% to 30% to process IAP or In-App purchases. So for every $10 you pay to Netflix, Apples keeps $3. With more than a hundred million subscribers world-wide, and a large portion of them using Apple devices, this number adds up to several million a month, very quickly.
Netflix occupies the top spot in Apple’s App Store Rankings, and this could substantially add to their revenue. And again, there’s no point in lining the pockets of their competitor (who themselves are reported to have been working on a competing product).
They started testing this – back in August 2018. Where it removed the “Sign Up” option completely from their Apple App in certain demographics and finally rolled out the changes worldwide in November.
This isn’t the first time they have dropped In-app purchases as a payment method. Earlier last year, they began by dropping Google’s IAP in their app as well.
What this essentially means is that new users and users’ resuming their contact will have to visit the Netflix Website once to authenticate their credit card for payments straight to Netflix. They can then sign up on their Apple devices with their ID/Password.
Apple’s App Guidelines are extremely strict about this and prohibit developers from targeting iOS users to use an external payment method and use their in-app purchase model instead. Netflix seems to have bypassed this regulation, by removing the sign-up option completely from their app.
Business Insider notes that Analysts at Nomura showed there’s precedent for Netflix’s move: Spotify has been asking subscribers for years to switch from paying through Apple. The analysts put together a chart, compiled with data from SensorTower and Instinet, showing just how that affected App Store revenue.