Streaming giant Netflix is reportedly looking into ways to break free from Apple’s revenue sharing scheme by bypassing iTunes billing altogether.
“We are constantly innovating and testing new signup approaches on different platforms to better understand what our members like,” a Netflix spokesperson said. “Based on what we learn, we work to improve the Netflix experience for members everywhere.”
TechCrunchsaidtoday it’s confirmed with Netflix they’re testing a new billing method in 33 countries, indicating the streaming company is dead serious about bypassing iTunes.
The test basically disables In-App Subscriptions in Netflix for iOS and tvOS.
The billing test is running in the following countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Finland, France, Germany, Great Britain, Hungary, India, Indonesia, Italy, Japan, Korea, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Slovakia, South Africa, Spain, Sweden, Taiwan and Thailand.
If Netflix proceeds with the plan and decides to switch off iTunes billing altogether, Apple will no longer collect its revenue cut from one of the top-grossing iPhone apps.
It’s no secret Apple has been seeing some stellar growth in Services, a $50 billion annual business on its own. Although the Services segment includes hardware sales like Apple Watch, Apple TV and Beats accessories, most of the segment’s growth comes from subscriptions.
Here’s why…
App Store revenue’s been growing at a much faster clip than iPhone revenue—hence, the significant growth in Services should be attributed to subscriptions rather than app sales.
How do we know the Services segment isn’t growing because of app downloads?
Given iPhone is no linger bringing many new users, the only way Services could experience such a stellar growth is due to existing users who seem to be increasingly subscribing to premium streaming apps like Netflix through the In-App Purchase mechanism.
Would you agree with that assessment?
