Netflix wants to stop paying Apple a cut of its earnings

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75% of Netflix users have no plans to jump ship to Apple TV+ (right away)
Netflix is experimenting with a way to bypass paying Apple.
Photo: Flickr/Stock Catalog

Netflix is among the highest-grossing apps in the App Store, but that might not be the case for much longer. That’s because the video streaming company is supposedly looking for ways to bypass iTunes so as to save itself the money that it currently pays Apple.

The decision is at least partially linked to Apple’s efforts in producing its own original video content, which would make it a direct competitor to Netflix.

Netflix is currently running an experiment in select markets in Europe, Latin America, and Asia. New or lapsed customers in these locations are unable to pay for the service using iTunes, and are instead being directed to the mobile web version of the service to log their payment details directly.

The test has been running since June, initially starting with 10 countries. This number has since expanded to 33 countries. The experiment will run through September 30.

The list of countries affected includes 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.

This isn’t a total shock. Currently Netflix pays Apple 30 percent on the first year of subscriptions taken using iTunes. This is diminished to 15 percent for subsequent years. Even so, that’s a hefty chunk of cash for essentially giving Netflix a platform for selling its services that it might not actually need.

Netflix has also done this previously with Google. From May 2018, new or rejoining customers were unable to use Google Play to pay for their subscription.

Apple’s impending Netflix rival

Apple currently has around 20 different TV shows into development for its Netflix rival service. Although it hasn’t yet made clear how it plans to distribute these shows, one popular theory suggests that Apple may launch its own Netflix-style service.

While Netflix bypassing iTunes won’t do anything to dent Apple’s original TV ambitions, we can still understand why the company wouldn’t be keen to support them. Especially if it’s experiment demonstrates that customers don’t miss paying through iTunes after all.

Do you pay for Netflix through Apple? If so, would Netflix removing this service impact your decision to subscribe? Let us know in the comments below.

Source: TechCrunch