Netflix Set To Hurt Apple App Cash Cow, With OZ Market Test
Apple’s content and apps cash cow is under siege, on one side Netflix one of the highest grossing apps on the iOS is looking to go direct while Amazon is looking to go after Apple’s music business.
Netflix is one of the highest-grossing apps on the iOS App Store, but it looks like the video streaming giant is contemplating how it might make an even bigger margin on its iPhone and iPad users.
Currently Netflix is using the Australian market along with 32 other Countries to test a new delivery system that eliminates the need to pay and or supply Apple with their database of customers.
In testing how to eliminate having to go through the Apple iTunes system Netflix is looking to save the 30% they have to pay to Apple on every monthly subscription in the first year of the subscription.
New and lapsed subscribers are now getting redirected to the Netflix mobile web version to log payment details directly with Netflix.
Spotify who is set to come under attack from Amazon has already moved users away from using iTunes to pay for subscriptions.
Currently Apple is looking to compete directly with Spotify and Netflix with both Companies have also moved to cut out Google on the Android platform.
Netflix’s iOS test was first spotted by NDTV in India last week and then Australia.
A Netflix customer support employee confirmed that the test has actually been running since June, starting first in 10 countries and then expanding to 33 from August 2 until September 30.
“During this time, customers in these countries may experience any of the following when launching the Netflix app on an iOS (mobile or tablet) device: 1. Ability to sign up in app with only iTunes Mode Of Payment. 2. Ability to log into Netflix but not sign up (sign up only via mobile browser),” he wrote. “We are constantly innovating and testing new signup approaches on different platforms to better understand what our members like. Based on what we learn, we work to improve the Netflix experience for members everywhere.”
Asked for more clarification, a spokesperson, provided a statement echoing the same words also used by the customer support agent.
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.
Tech Crunch who first broke the news said that although Netflix is calling this a test, it’s notable that the company has been gradually shifting its customer relationships on other platforms to develop more direct billing with its users.
As of May 2018, Netflix stopped allowing new or re-joining customers to use Google Play to pay for its service. “If you are currently billed by Google Play, you can continue to use Google Play billing until your account is cancelled,” the company notes on a help page about the change, which is in line with how it appears to be testing billing now on iOS.
Changing the billing to a direct format means that Netflix bypasses giving Google and Apple a cut on those subscriptions. Currently, Apple takes a 30 percent cut on the first year of a subscription, which goes down to 15 percent for subsequent years.