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Home / Technology / Chart: How much Apple will lose from Netflix iTunes billing change

Chart: How much Apple will lose from Netflix iTunes billing change



Apple has had a tough time during the festival.

At the end of December, VentureBeat revealed that Netflix would start forcing new and dropped iOS users to pay for the streaming service over the site, rather than through iTunes.

And on Wednesday, Apple issued a shock deposit after iPhone sales and China's economy was slower than expected.

Netflix development doesn't necessarily seem like a big deal, except that Apple earns a significant amount of money from the streaming service thanks to a 30% subscription fee, app content and one-time payments for something sold through the App Store.

Read more : Apple's sweet talk about its $ 1

0.8 billion service business was completely undermined by Netflix

Basically, if you pay for things on apps through Apple, the developer must Give a piece of revenue to Apple. This applies to digital content businesses such as mobile games and music and streaming services instead of programs such as Uber or Airbnb, providing real-time services.

Netflix is ​​hugely popular, and in the United States earned more revenue through the App Store than any other app, according to November data from the SensorTower. We can assume that it is also the Apple app with top-serving third party. Additional figures suggest that Apple may end up losing $ 256 million in potential annual revenue thanks to Netflix bypassing iTunes billing. So Apple is losing a great deal of cash from the App Store.

Here is what can look, visualized.

Analysts at Nomura noted that there is a precedent for Netflix's move: Spotify has been asking subscribers for several years to switch away from paying through Apple. Analysts compiled a chart, compiled with data from the SensorTower and Instinet, showing how it impacted the App Store revenue.

This chart shows that Apple will feel a much larger decline from Netflix than Spotify:

App Store revenue from Spotify saw a dropoff in 2016 after
Nomura / Business Insider

This is not particularly good news for Apple, which is currently trying to persuade investors that its services business can make up for its slow iPhone revenue . Apple counts revenue from the App Store as part of its service business. It also includes the money it generates from iCloud, AppleCare and Apple Music.

Business Insider estimates that revenue from the App Store accounts for nearly 40% of Apple's service business. You can see how we worked out here. Netflix can't tough that number in itself, but it can set a trend for other big subscriptions and content businesses – like the big news or the Tinder – similarly trying to bypass the iTunes billing process.


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