Netflix has taken a big step that will probably draw interest from industry watchers and Apple fans alike. Netflix has ended its subscription billing partnership with Apple as of February 26, 2024. Due to this change, both new and existing Netflix members will no longer be able to pay for their subscriptions using Apple’s in-app purchase system. Check out the details.
Netflix Stops Payments Made via Apple’s App Store
This move comes after Netflix decided to stop accepting new memberships through the App Store for iPhones and iPads in 2018. Users were instead instructed to register directly on the Netflix website. This change will now affect current subscribers who were grandfathered into paying for Netflix with Apple. Eventually, when they want to make changes to their subscription—like changing their plan or payment information—they’ll have to switch to a new payment method directly on the Netflix website.
This change is justified by a long-running disagreement about App Store fees. All in-app purchases made through Apple are subject to a 15% commission, which Netflix and other large companies such as Spotify and Epic Games have determined to be exorbitant. Netflix wants to avoid these costs by putting in place its billing system, which could end up saving the business millions of dollars a year.
There are now two steps involved in the Netflix sign-up process for both new and existing subscribers. Users have to use their preferred device to access the Netflix website, including mobile browsers and then proceed to either create a new account or log in with an already-existing one. To complete the subscription, they will first select a subscription plan and then pick an alternate payment option, like PayPal, a credit card, or a debit card.
If an existing subscriber uses Apple for billing, their subscriptions will be automatically renewed until they make changes that require them to switch to a different payment method. When it’s necessary, Netflix will send these users notifications asking them to update their payment details directly on the Netflix website.
This calculated action by Netflix may have wider effects on how platform providers like Apple and Google interact with app developers. It highlights the ongoing discussion about app store fees and the power imbalances that result from these kinds of partnerships. It remains to be seen if other developers will take similar actions to get around app store payment systems.
Overall, with this move, Netflix is indicating a possible change in the dynamics of app store economics in addition to reaffirming its independence. This choice might open the door for other businesses to reevaluate their partnerships with platform providers and look into different ways to bring in money.
