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Apple Wanted to Keep Netflix Using in-app Purchases

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Apple employees were considering giving Netflix special treatment to convince the streaming service to not abandon in-app purchases, internal emails revealed during the Epic Games v. Apple lawsuit.

In the run-up to Netflix removing its subscription offering to avoid Apple’s fees, a presentation circulated within Apple proposed to advertise Netflix in its retail stores, use a portion of its cut of App Store commission fees to pay for search ads and even bundle Netflix with other Apple services.

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The emails start with an explanation of a test Netflix wanted to run to study the impact of disabling in-app purchases on iOS, The Verge, citing 9To5Mac, reported.

Netflix’s main concern, as Director of App Store Business Management Carson Oliver wrote, was over the “voluntary churn” of subscribers through the App Store.

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The exact amounts are redacted, but that seems to suggest that Netflix subscribers from the App Store canceled the service more than subscribers who joined other ways, like through Netflix’s website.

Since Apple takes a 30 percent cut from subscription fees as part of its App Store policy, there are also clear financial reasons why Netflix might want to consider not using IAPs, the report said.

Netflix could keep more of each monthly subscription without Apple’s cut.

In Apple’s first internal responses to Netflix’s plans, Oliver asked whether the company should consider punishing Netflix if it went forward with its test.

There’s a several-month gap between the initial thread of emails and Apple’s later Netflix discussions, but the tone seems to have changed once Netflix appeared committed to A/B testing the removal of in-app purchases.

An email from July of 2018 showed Apple employees had created a presentation in favour of in-app purchases.

It included reminders of the things Apple has done for Netflix and floated new deals, like offering subscriber discounts and letting Netflix determine what Netflix shows and movies Apple writes about it in the App Store.

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