Netflix Cuts Apple Out of In-App Purchase Revenue

Netflix has gone through with a plan to cut Apple out of a 15%-30% share of subscription revenue on sign-ups made through its app store.

Previously, if a user downloaded the Netflix app through Apple’s App Store and used the built-in billing system found in iPhones and iPads, Apple would take a cut of each month’s subscription bill.

Netflix started testing a system that restricts users from using the in-app billing option, requiring them to go directly to the Netflix website to sign up. And according to Venture Beat, the subscription streaming service has quietly deployed that system.

For both Netflix and Apple, the revenue consequences are significant.

According to Sensor Tower, which tracks the app business, the Netflix app was the No. 1 grossing app in the U.S. for Apple’s App Store in November. The Netflix app generated $243.7 million in the third quarter, a 90% year over year increase.

Netflix has collected an estimated $1.4 billion through app marketplaces on Apple and Google to date. 

Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!