Apple Discussed ‘Punitive Measures’ Against Netflix for Dropping In-App Purchases
As the Epic Games v. Apple trial progresses into its 3rd day, Apples internal files and interactions with various business are continuing to surface, giving us some insight into the negotiations that Apple has had around the App Store.
Back in December 2018, Netflix stopped using in-app membership options for new or resubscribing members and rather began requiring them to sign up for Netflix outside of the App Store in order to prevent paying Apples 30 percent cut. As it turns out, Apple executives were dissatisfied with Netflixs decision, and made efforts to persuade 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, however 9to5Mac highlighted e-mails between Apple executives going over Netflixs choice. Apple started rushing to put a stop to it when Apple learned that Netflix was A/B evaluating the elimination of in-app purchases in certain countries.
Apples App Store Business Management Director Carson Oliver sent out an e-mail in February 2018 describing Netflixs testing plans and asked his fellow App Store executives whether Apple need to take “punitive procedures” against Netflix.
Do we wish to take any punitive measures in action to the test (for examples, pulling all international featuring during the test duration)? If so, how should those punitive steps be interacted to Netflix? (sic).
The emails do not make it clear if Apple did undoubtedly take any actions to restrict including throughout Netflixs testing, but Netflix did proceed with the A/B test and discovered it fruitful. Ahead of when Netflix pulled in-app purchase alternatives, Apple created an entire presentation to encourage Netflix to continue to use in-app membership register.
Since it was greater than those who signed up via the web, Netflix was concerned about voluntary churn levels on iOS. In a nutshell, iOS users who signed up for Netflix through in-app purchases were cancelling their Netflix accounts at a greater rate, an issue that Apple worked to resolve for Netflix.
Other Netflix issues included free trial abuse (which Apple attended to), un-grandfathering (raising prices on users locked in to a choose price), and providing promos (wasnt possible to use discounts on iOS). Apple internally talked about methods to repair these problems for Netflix to motivate the company to stick to in-app purchases.
Apple likewise incentivized Netflix by explaining how much dedicated featuring Netflix was getting. Apple said that Netflix was included more than any other partner, something that Apple wanted to continue doing.
Apple proposed continued collaborated including throughout iOS and Apple TV, ads promoting Netflix, App Store e-mail campaigns, including performance information, an “Apple TELEVISION bundle” and select video partner program benefits such as the alternative to up-sell non-IAP customers and billing flexibility to un-grandfather and cancel membership charges.
Apple also talked about package deals for Netflix and an Apple service along with carrier and payment partners for co-funded subscription deals, as well as in-store marketing for Netflix, but none of these procedures eventually persuaded Netflix to stick to in-app purchases.
Today, there is no in-app purchase alternative for Netflix, and those who want to watch Netflix on an iPhone or an iPad need to initially register on the web, with Apple gathering no cash. Netflix is likewise not permitted to direct clients where to register, though, and the splash screen simply says “You cant register for Netflix in the app.”.
The Epic Games v. Apple trial is expected to last for roughly three weeks in overall, with Apple CEO Tim Cook and other executives set to testify in the coming weeks.