Netflix becomes top grossing iOS app in the US for the first time, as weekly net revenue grows to nearly $2.9M
Just over a year after Netflix began allowing iOS users to subscribe to its service via in-app purchases, the Netflix app has summited the Top Grossing Apps chart for iPhone on the U.S. App Store.
Context & Ripple Effects
Just over a year after Netflix switched on iOS in-app subscriptions, Sensor Tower reports the app has reached the top of the U.S. iPhone grossing chart on weekly net revenue near $2.9M — evidence that the App Store could function as a first-class acquisition channel for a video subscription service, not just games.
The milestone opens an arc the related coverage tracks closely: revenue up 233% YoY to $153M in Q2 2017 across both stores, then ~$243.7M in Q3 2018, up ~90% YoY, making Netflix the highest-grossing non-game mobile app worldwide before it held the overall 2018 top spot at $790M through November.
First-order effects
- Netflix gains its fastest-growing U.S. signup channel yet, with Apple taking its standard cut of every subscription purchased in-app — a cost Netflix is currently absorbing to buy distribution.
- Apple's U.S. App Store now has a recurring-billing entertainment app at the top of its grossing chart, shifting the store's revenue mix further toward subscriptions.
Second-order effects
- Rival video services read the same data: YouTube's Red subscriptions push it to the top of the U.S. iOS grossing chart by March 2018 (its own first time there), confirming subscription video as the store's new revenue engine.
- As Netflix's in-app volume scales toward the hundreds of millions per quarter, the platform fee grows from rounding error to a material line item, sharpening the economics of staying inside Apple's billing system.
Third-order effects
- The endgame shows up two years later: once scale made the fee untenable, Netflix stopped letting new and returning users subscribe via in-app purchase entirely, routing signups to its website (the December 2018 cutoff) — the template for streamers treating app stores as optional storefronts rather than required tollbooths.
- If subscription apps keep climbing the grossing charts while their owners route around store billing, app-store commission structures face pressure to differentiate for video services, a fault line regulators and platforms are still working out.
The trend: Subscription video is displacing games atop mobile grossing charts, and the bigger that revenue gets, the harder its owners push back against app-store commissions.