App developers rarely take steps that might lead to conflicts with Apple, but Netflix — maker of one of the App Store’s highest-grossing services — is openly pulling the tiger’s tail, India’s NDTV and TechCrunch have discovered. The video streaming giant has confirmed that it’s “testing the iTunes payment method” in 33 countries through September 30, specifically preventing new or lapsed customers in those countries from purchasing in-app subscriptions and directing them to its own web page instead.
For years, Netflix customers have had two subscription options: Netflix’s own site, or directly through in-app purchases. In addition to demanding 30 percent of app subscription revenues, Apple initially mandated that developers could not charge more for in-app purchases than developer-direct purchases. Developers struggled with Apple’s demands, in some cases raising their prices across the board, and in others cutting into their own profits. Faced with increasingly open displays of dissent, Apple later cut its subscription take to 15 percent after the first year.
Netflix is in an atypically strong position to challenge the policy. In part because of the growing popularity of its video streaming service, which is available on Apple TV devices, cable providers and even a 5G wireless carrier have made bulk deals to bring Apple TV 4K boxes into homes. Cutting Netflix off would almost certainly create ripples in those deals and infuriate Apple TV users.
Additionally, Apple has quietly been working on a streaming video service of its own, though it has not said whether its service will supplant or augment Netflix’s offering. The fact that Netflix would presume to disrupt Apple’s billing relationship with Netflix customers suggests that it believes the new service will be adversarial rather than complementary, and is doing what’s in its best interest while it still can.
The iOS Netflix billing “test” is currently running in Argentina, Australia, Austria, Belgium, Brazil, Canada, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Finland, France, Germany, Great Britain, Hungary, India, Indonesia, Italy, Japan, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Slovakia, South Africa, South Korea, Spain, Sweden, Taiwan, and Thailand. It’s unclear whether the test will expand to more countries, or instead end with the abrupt cessation of iTunes subscriptions.
According to its billing FAQs, Netflix cut off Google Play subscription billing for new or rejoining customers in May. The company now directs Google Play users to sign up for new accounts through its own site.