On Netflix Pulling Out of iTunes Billing for New Users

Manish Singh, reporting for VentureBeat:

Netflix is further distancing itself from Apple’s iTunes tax bracket. Earlier this year, the streaming giant enabled iOS users in more than two dozen markets to bypass the iTunes payment method as part of an experiment. The company now tells VentureBeat that it has concluded the experiment and has incorporated the change globally.

“We no longer support iTunes as a method of payment for new members,” a Netflix spokesperson told VentureBeat. Existing members, however, can continue to use iTunes as a method of payment, the spokesperson added.

This is a big deal. Netflix is the top-grossing app in the App Store in the U.S. They might remain the top-grossing app, even, because users who have already signed up with iTunes billing can keep doing so. But it really tells you how fractious Apple’s relationship is with content providers if the most successful one on the platform stops supporting it. And keep in mind that Netflix has long had a special relationship with Apple, with an 85/15 cut from the start, not just after a year.

If Apple wants to insist on a cut of in-app purchased subscription revenue, that’s their prerogative. What gets me, though, are the rules that prevent apps that eschew in-app purchases from telling users in plain language how to actually pay. Not only is Netflix not allowed to link to their website, they can’t even tell the user they need to go to netflix.com to sign up. This screen from the current version of Netflix for iPad is as close as they get, and I’ll bet it was the result of tense negotiations with Apple. Again, Apple can make the rules — it’s their platform. But it’s just wrong that one of the rules is that apps aren’t allowed to explain the rules to users.

Apple should be earning its share of in-app subscription revenue by competing on convenience, not confusion and obfuscation.

Oh, and that “Help” button up in the corner of the Netflix launch screen is interesting. Tap that button and you get the option to call Netflix customer support (over some VOIP system, not a real phone call). I tried that, was told the queue was “about 6 minutes”, and exactly 6 minutes and 11 seconds later I was speaking to a friendly support rep. I told him I was using the iPad app and trying to sign up, but couldn’t figure out how.

He told me I need to go to netflix.com in my browser.