Netflix is currently one of the highest-grossing iOS apps, thanks to a significant number of users paying their subscription through iTunes billing.
But that could be set to change as the streaming video service seeks to bypass iTunes for future subscription payments …
TechCrunch says that it has confirmed with Netflix that the company is currently running a test in a large number of countries.
TechCrunch has learned and confirmed that Netflix, in its own words, is “testing the iTunes payment method” in 33 countries. More specifically, Netflix is testing how to bypass iTunes. Until September 30, new or lapsed subscribers in selected markets across Europe, Latin America and Asia will be unable pay using iTunes. They are instead getting redirected to the mobile web version to log payment details directly with Netflix […]
The full list of countries where the billing test is running is as follows: 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.
Apple currently receives 30% of first-year Netflix subscriptions through the app, and 15% from the second year on. The loss of that income could be significant.
Apple and subscription-based services like Netflix and Spotify have long been frenemies – the App Store providing a source of new customers, but taking a significant cut in return. Apple switched from a flat rate 30% commission to one of 30% in year 1 and 15% in year 2 onward in an attempt to reduce tensions.
If Netflix declares the test a success, and switches off iTunes billing altogether, it won’t be the first company to decide it can survive without in-app purchases. Amazon famously doesn’t allow books to be purchased through its Kindle apps on iPhone and iPad precisely to avoid the need to give Apple a cut.