Netflix announces in-app subscriptions for iPhone and iPad, offers same monthly rate as on the web
Rich McCormick / The Verge :
Context & Ripple Effects
Netflix is reversing course on iOS billing: after years of pushing new subscribers to its website, it will now sell subscriptions inside the iPhone and iPad apps — and hold them at the same monthly rate as on the web, meaning Netflix absorbs whatever commission Apple takes rather than passing it on. The move lands mid-arc: Netflix had extended in-app billing to Android earlier in April 2016 without charging customers extra, establishing price parity across platforms.
First-order effects
- iPhone and iPad users can now sign up and pay without leaving the Netflix app, removing the web-signup detour that had been the only path for new iOS subscribers.
- Netflix takes on a recurring per-subscriber commission cost to Apple on every in-app signup, choosing margin erosion over price increases or an iOS paywall.
Second-order effects
- Once the in-app channel exists, Netflix begins testing ways around it — within two years it runs trials bypassing iTunes payment in 33 countries by redirecting users to the mobile web to enter card details directly with Netflix.
- Apple's cut on new Netflix signups shrinks toward zero when Netflix stops allowing new or returning users to pay through in-app purchase entirely, forcing signups back through its site.
Third-order effects
- If subscription services keep routing around store billing, the durable structure is one where Apple's commission applies mainly to legacy subscribers, and platform policy fights over external links end with accommodations like the 2022 button that sends iOS users straight to Netflix's site under the reader-apps rules.
The trend: Streaming services are steadily migrating signup and payment off app-store rails, with Apple's commission policy — and each workaround it permits or blocks — setting the pace of retreat.