Netflix Now Allowing iOS In-App Subscriptions

Netflix is the latest streaming service to allow in-app purchases for iPhones and iPads, reports The Verge. Netflix made the announcement on Twitter with

Subscription News: Netflix Now Allowing iOS In-App Subscriptions

Source: Netflix

Netflix is the latest streaming service to allow in-app purchases for iPhones and iPads, reports The Verge. Netflix made the announcement on Twitter with a clip featuring Orange is the New Black characters Crazy and Taystee who discover an iPhone inside Litchfield Prison.

Subscription News: Netflix Now Allowing iOS In-App Subscriptions

Source: Netflix

While Netflix has had iOS apps since 2010, it did not previously allow in-app purchases. The Verge speculates this was due to the dreaded “Apple tax” of 30%.

Some services make up for Apple’s sizable cut by raising their monthly rates. Spotify, for example, charges $12.99 per month for in-app subscriptions versus $9.99 for subscriptions purchased directly through Spotify. For now, Netflix is charging its regular monthly fee of $7.99 to new subscribers through the iOS app.

Did Netflix get a special deal from Apple? Maybe. Earlier this year Recode reported that streaming companies like Netflix, Hulu and MLB.tv would only have to pay a 15% tax for subscribers who signed up for those services via Apple TV. This rate cut makes in-app purchases more attractive to companies who would otherwise shy away.

Insider Take:

Subscription News: Netflix Now Allowing iOS In-App Subscriptions

Source: Netflix

The Netflix announcement is anti-climactic. Sure, the long overdue feature is nice for iOS users who want to subscribe to the streaming video service from iTunes, but it isn’t a material change that will make or break Netflix.

In fact, it could actually cost Netflix to acquire new customers through in-app purchases. After all, Netflix overhead rises with a 15 or 30% revenue share, along with its other costs.

We think the more interesting news is what deal Netflix and Apple struck to make this a feature a reality, and more importantly, how it will impact future services offered by Apple.

If/when Apple launches its owns streaming video service, it will be interesting to see if Apple will still play well with others, offering discounted revenue shares, or if the company will leverage this relationship to hold competitors like Netflix hostage.

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