Netflix will no longer offer subscription purchases in the app for users of iOS devices such as iPhones and iPads, VentureBeat reports. The change turns a significant revenue for Apple at a time when it is working hard to encourage app developers to subscribe subscriptions as a model, and when it depends on the service company to tell a growth story to its shareholders.
The change applies to customers who are new to Netflix or who have allowed their subscriptions to lapse. Currently, customers who already use Apple's platform to pay for Netflix can continue to do so.
Subscriptions have been a key focus for Apple too late. In 201
In the latest earnings reports, Apple has highlighted its service business – an umbrella covering subscriptions – as its major growth area. The company points to revenue from services such as this as a counterweight to the inevitability of its slow smartphone sales. That said, app subscriptions are not the only major factor in Apple's service business. It also includes Apple Music, iCloud and many other things.
According to data from the Sensor Tower quoted by TechCrunch, Netlix net broke about $ 853 million in the iOS App Store in 2018. In today's 15 percent platform, it means Apple's subscription program could face a reduction of more than $ 120 million in Revenue As a result of Netflix's decision, the subscriber numbers should be the same in 2019. However, note that this estimate does not take into account existing users who would like older support for the payment method until the next interrupts their automatic payments.
Netflix had already subscribed to the Google Play store subscription that Android phone users are using, and Netflix tried this decision on IOS in some markets before it became the new policy.
It makes sense – Netflix may have something to lose in this change as well. Anyone who has worked in e-commerce or other conversion-oriented businesses knows it is expensive to have friction at all for users trying to get to the "buy" or "subscribe" button. Even navigating an extra display can lead to conversion rate waste in the two digits. Asking customers to go to another app, website, or device may be even worse. Like Amazon, Netflix can do this because customers have confidence in their strong brand.
However, smaller app developers cannot have that branding power and they cannot realistically take this approach. In most cases, they are entirely dependent on Apple for their revenue. Netflix is big enough to challenge Apple where other developers can't.
At this point, this is not the first time that Netflix and Apple have shared important initiatives on the latter platforms. Netflix was left out of inclusion in Apple's TV app, which is one of the main selling points of Apple TV 4K and a cornerstone of the entertainment experience on iOS devices. Most similar services support the TV app, and the lack of Netflix is detrimental to the value of Apple's TV lovers platform.
Apple is planning to launch its own TV service as soon as this year, with original programming from high-profile creators already advancing. The service will probably compete directly with Netflix, so we do not expect the relationship between these two companies to be any more cozy in the future.