Netflix is currently running a test of its iOS app in more than 30 countries that doesn’t allow users to pay for the service through Apple’s App Store billing system — which would let the company avoid paying the Apple “tax” on subscriptions.
“We are constantly innovating and testing new signup approaches on different platforms to better understand what our members like,” a Netflix rep said in an emailed statement. “Based on what we learn, we work to improve the Netflix experience for members everywhere.”
Apple did not respond to a request for comment.
The Netflix test, first reported by Indian tech-news site Gadgets 360, spans 33 countries (not including the U.S., for now). New users in markets including Great Britain, Canada, Brazil and Germany who download the iOS app will see one of two options: to sign up and subscribe only via Apple’s App Store, or be able to login only and sign up via Netflix’s site directly.
By forcing new Netflix members to sign up directly, the company avoids paying Apple a share of the revenue for subscriptions (referred by some in the industry as a “tax”). Apple takes a 30% cut of subscription revenue from app partners for the first year, and then 15% in subsequent years.
For Apple, subscriptions through apps have become a booming business. They helped drive the company’s services revenue up 31% year-over-year in the June 30 quarter, to $9.6 billion. CEO Tim Cook, on the tech giant’s July 31 earnings call, boasted that more than 300 million people now pay for subscriptions through the App Store.
Two years ago, when Spotify directed new users to sign up directly — instead of through the App Store — Apple suggested that Spotify’s iOS app could be removed from the App Store because it was trying to “circumvent in-app purchase rules.” The companies have resolved their differences, and Spotify now does not allow new subscribers to pay through the App Store.
Meanwhile, Netflix as of this past May no longer lets new or returning subs sign up through Google Play billing, as noted by TechCrunch.
For now, Netflix’s test to bypass Apple’s App Store billing system is set for a limited time. It kicked off the trial in June in 10 countries before widening it to 33 countries in a test slated to run Aug. 2-Sept. 30.
Netflix routinely tests new features and pricing, and there’s no guarantee it will universally introduce them. The company, for example, recently launched a test of short promos for Netflix series that run after an episode concludes (and before the next one starts) — which has spawned ire that it’s foisting “commercials” on its members.
Per the TechCrunch report, Netflix is testing direct billing in the iOS app in the following countries: 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.