Apple wants Netflix to Keep using in-app Purchases

Employees at Apple were considering giving Netflix special treatment to persuade the streaming service not to abandon in-app purchases, according to internal emails released during the Epic Games v. Apple case. A presentation circulated inside Apple proposing to promote in its retail stores, use a portion of its share of App Store commission fees to pay for search advertising. They even bundle with other Apple services in the run-up to Netflix withdrawing its subscription offering to circumvent Apple’s fees.

The emails, which were discovered by 9to5Mac, begin with a description of a test Netflix decided to conduct to see how disabling in-app purchases on iOS would affect users. According to  Director of App Store Business Management Carson Oliver, the company’s main concern was the “voluntary turnover” of subscribers via the App Store.

The exact figures have been redacted, but it appears that Netflix users who signed up via the App Store canceled the service more often than those who signed up via other channels, such as  website. Since Apple takes a 30% share of subscription fees as part of its App Store strategy, there are compelling financial reasons for Netflix to avoid using IAPs. Without Apple’s cut, could hold more of each monthly subscription.

Oliver, in one of Apple’s first internal responses to Netflix plans, wonders whether the company should punish if it goes ahead with its test. The initial thread of emails and Apple’s later conversations are several months apart, but the tone seems to have shifted once Netflix became dedicated to A/B checking the elimination of in-app purchases.