Netflix is no longer allowing iPads or iPhone users to join their streaming service through iTunes. Reportedly, this decision is going to cost Apple in excess of $250 million every year.
If you have an application in the App Store and you’re using it for billing clients, Apple is getting a 15% share (used to be 30%). It might not sound like a lot, but if you have hundreds of millions of users and subscribers worldwide, like Netflix for example, that’s going to amount to a lot of money.
According to VentureBeat, Netflix is no longer willing to pay Apple for something that they can take care of themselves. Removing the option to pay for new accounts or reactivations through iTunes saves Netflix more than $250 million, according to data provided by Sensor Tower, an analytics platform designed for the mobile ecosystem.
Apple is not the only one
Netflix did the same thing with Google, which means that the company was pretty much tired of paying other companies for a simple service. Their app is still listed in the App Store and Google Play Store, but that’s pretty much the extent of the business model right now.
Using an app store for payments, from whichever company, only makes sense if you’re a small enterprise and you lack the infrastructure to support it. But that’s not the case with Netflix, which is more than capable of taking care of that themselves.
It’s also important to mention that active users that have a subscription through iTunes will go on with it. Only new users or people that want to reactivate their account will have to go through the official Netflix website.
Interestingly enough, it opens a very important door for discussions about just how much money Google and Apple are making from developers. Apple recently dropped the fee to 15%, but it’s becoming more evident that it’s not a sustainable model, at least not for long term.