Apple Discussed ‘Punitive Measures’ Against Netflix for Dropping In-App Purchases
As the Epic Games v. Apple trial advances into its 3rd day, Apples internal documents and interactions with numerous business are continuing to surface area, providing us some insight into the transactions that Apple has had around the App Store.
Back in December 2018, Netflix stopped using in-app subscription choices for new or resubscribing members and instead started needing them to sign up for Netflix outside of the App Store in order to avoid paying Apples 30 percent cut. As it ends up, Apple executives were unhappy with Netflixs decision, and made attempts to encourage Netflix to keep in-app purchases readily available.
The topic hasnt yet been brought up in the live in-person trial thats going on right now, but 9to5Mac highlighted emails in between Apple executives going over Netflixs choice. Apple started scrambling to put a stop to it when Apple found out that Netflix was A/B checking the removal of in-app purchases in particular countries.
Apples App Store Business Management Director Carson Oliver sent an email in February 2018 detailing Netflixs testing plans and asked his fellow App Store executives whether Apple should take “punitive measures” against Netflix.
Do we wish to take any punitive steps in response to the test (for instances, pulling all international including throughout the test duration)? If so, how should those punitive procedures be interacted to Netflix? (sic).
The emails do not make it clear if Apple did indeed take any steps to limit featuring during Netflixs testing, but Netflix did continue with the A/B test and found it worthwhile. Ahead of when Netflix pulled in-app purchase options, Apple created a whole discussion to persuade Netflix to continue to offer in-app subscription register.
Netflix was worried about voluntary churn levels on iOS since it was greater than those who registered through the web. In a nutshell, iOS users who registered for Netflix through in-app purchases were cancelling their Netflix accounts at a higher rate, a concern that Apple worked to fix for Netflix.
Other Netflix issues consisted of free trial abuse (which Apple attended to), un-grandfathering (raising costs on users locked in to a choose rate), and offering promos (wasnt possible to provide discount rates on iOS). Apple internally talked about methods to repair these issues for Netflix to motivate the company to stick with in-app purchases.
Apple also incentivized Netflix by explaining how much devoted featuring Netflix was getting. Apple said that Netflix was featured more than any other partner, something that Apple was prepared to continue doing.
Apple proposed continued coordinated featuring across iOS and Apple TV, advertisements promoting Netflix, App Store e-mail projects, featuring efficiency information, an “Apple TELEVISION bundle” and choose video partner program advantages such as the alternative to up-sell non-IAP clients and billing versatility to un-grandfather and cancel subscription charges.
Apple also talked about package deals for Netflix and an Apple service together with carrier and payment partners for co-funded subscription offers, along with in-store marketing for Netflix, however none of these measures ultimately convinced Netflix to stick with in-app purchases.
Today, there is no in-app purchase option for Netflix, and those who wish to see Netflix on an iPhone or an iPad must first sign up online, with Apple collecting no cash. Netflix is likewise not permitted to direct customers where to sign up, however, and the splash screen simply says “You cant sign up for Netflix in the app.”.
The Epic Games v. Apple trial is expected to last for approximately three weeks in total, with Apple CEO Tim Cook and other executives set to testify in the coming weeks.