Netflix is the latest media streaming app to revolt against the so-called “Apple tax,” the percentage paid to Apple on each in-app subscription.
For years, many services have allowed their users to subscribe through in-app payments. This is handy, as it takes one step out of the sign-up process for users, and all they have to do is sign up directly through their device. However, for this convenience, Apple or Google take a percentage of subscriptions. For very successful services like Spotify or Netflix, the bill can really add up. So much so, that it might not make sense for them anymore. Spotify stopped allowing users to sign up through its app back in 2016, and now Netflix is doing the same.
The result is not so great for Apple, in particular, which is standing to lose something like 250 million or more per year.
In 2018, Netflix was the App Store’s top grossing app (it’s also the top-grossing iOS app of all time) with around $853 million on in-app subscriptions on the iOS App Store during 2018. To date, the figure is more like $1.5 billion over time, with Apple raking in a supposed $450 million from that. Netflix obviously grew tired of this and began testing a way to get rid of iTunes billing. The stars aligned and Netflix found that it could make it work, so now it’s killing the ability for new users to sign up and subscribe to its service in-app.
Netflix isn’t the first to do so. As mentioned above, Spotify already did this in 2016. Others like Amazon, have stuck to sign-ups and purchases through its own website and other apps instead of through the Prime Video app. Epic Games, the publisher behind Fortnite bypassed Google’s Play Store last year when it launched the game on Android. This decision had a significant impact on fees.
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