Apple Discussed ‘Punitive Measures’ Against Netflix for Dropping In-App Purchases
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Back in December 2018, Netflix stopped providing in-app subscription alternatives for resubscribing or new members and rather started needing them to register for Netflix beyond the App Store in order to prevent paying Apples 30 percent cut. As it turns out, Apple executives were unhappy with Netflixs choice, and made efforts to convince Netflix to keep in-app purchases available.
The subject hasnt yet been brought up in the live in-person trial thats going on today, but 9to5Mac highlighted emails in between Apple executives going over Netflixs choice. When Apple found out that Netflix was A/B checking the removal of in-app purchases in certain countries, Apple started scrambling to stop it.
Apples App Store Business Management Director Carson Oliver sent an email in February 2018 detailing Netflixs testing strategies and asked his fellow App Store executives whether Apple should take “punitive procedures” against Netflix.
Do we wish to take any punitive procedures in response to the test (for examples, pulling all international including during the test period)? If so, how should those punitive procedures be interacted to Netflix? (sic).
The e-mails do not make it clear if Apple did certainly take any steps to limit including during Netflixs screening, however Netflix did continue with the A/B test and found it fruitful. Ahead of when Netflix pulled in-app purchase choices, Apple designed a whole discussion to persuade Netflix to continue to provide in-app membership sign ups.
Netflix was concerned about voluntary churn levels on iOS since it was higher than those who registered by means of the web. In a nutshell, iOS users who subscribed to 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 concerns included free trial abuse (which Apple attended to), un-grandfathering (raising prices on users secured to a select cost), and providing promos (wasnt possible to offer discounts on iOS). Apple internally went over ways to repair these issues for Netflix to encourage the company to stick to in-app purchases.
Apple also incentivized Netflix by explaining just how much dedicated featuring Netflix was getting. Apple stated that Netflix was featured more than any other partner, something that Apple wanted to continue doing.
Apple proposed continued coordinated including throughout iOS and Apple TV, advertisements promoting Netflix, App Store e-mail campaigns, including performance data, an “Apple TV bundle” and choose video partner program benefits such as the option to up-sell non-IAP customers and billing versatility to un-grandfather and cancel subscription charges.
Apple also talked about bundle deals for Netflix and an Apple service in addition to carrier and payment partners for co-funded membership offers, along with in-store marketing for Netflix, however none of these measures eventually convinced Netflix to stick with in-app purchases.
Today, there is no in-app purchase option for Netflix, and those who wish to enjoy Netflix on an iPhone or an iPad need to first register on the web, with Apple collecting no money. Netflix is also not enabled to direct clients where to register, though, and the splash screen just says “You cant register for Netflix in the app.”.
The Epic Games v. Apple trial is expected to last for around three weeks in total, with Apple CEO Tim Cook and other executives set to affirm in the coming weeks.