Netflix is no longer allowing new customers on iOS to pay for the streaming service directly through an in-app subscription. It’s the latest example of a company with a high-profile, essential mobile app ditching Apple’s payment system to retain more profits for itself and stop handing the iPhone and iPad maker a cut of every subscription activated within the Netflix app.
According to new data compiled by Sensor Tower, Netflix grossed $853 million in 2018 on the iOS App Store. Based on that figure, Apple’s take would have been around $256 million, the firm said. To date, the Netflix iOS app has generated more than $1.5 billion through its in-app subscriptions, with Apple’s cut coming in around $450 million-plus, Sensor Tower estimated. Before the change, Netflix on iOS was grossing an average of $2.4 million per day in 2018 — meaning Apple was making around $700,000 by doing nothing other than allowing Netflix to offer subscriptions in its app.
(Note, however, that Sensor Tower’s figures are based on the App Store’s 30 percent cut of transactions. After the first year, Apple’s cut on subscription renewals is lowered to 15 percent. That’s not being factored in. But it gives you a rough idea of Apple’s losses here). The latter policy was implemented in 2016 after numerous companies complained that Apple was taking too much. Spotify, the leading subscription music app, has also bypassed Apple’s in-app billing for similar reasons.
Google has faced similar criticisms on the Android end of things; Netflix had already stopped offering in-app subscriptions through Google Play before today’s iOS news — and Fortnite developer Epic Games famously keeps its smash hit outside Google’s store to maximize profits on in-game items.