Spotify & Netflix Fire Shots at iTunes Billing Process

Netflix has become synonymous with entertainment streaming and surpassed the 110million global active subscriber mark this year. They are one of the most downloaded apps on the iTunes App Store and have been for some time. Until recently, this meant that Netflix paid commission to Apple for new subscriptions. That fee resembled something along the lines of 30% for the first subscription year and 15% for subsequent years.

With policies like this in play, it’s no shock Apple has become the largest company on earth, passing the 1 trillion-dollar net worth mark. But Netflix are taking steps to now make more of a connection with their users directly when it comes to billing. Since summer this year, various countries around the world have seen tests running in which the Netflix app will send users to a Netflix mobile site to manage payment and subscription sign up rather than conduct these activities within the app itself.

Essentially this is Netflix trying to swerve Apple’s commission policy on app-based subscriptions for iOS. This would obviously considerably strengthen Netflix’s margin on new and renewed app subscriptions on top of their already impressive earnings. It’s been rumoured that Spotify is also in a similar situation. The music streaming service now boasts over 85million paying subscribers itself, alongside non-paying subscribers who receive ads on the platform (stats from August 2018).

With two of the biggest global entertainment app services making moves to swerve Apple billing, will the trend catch on? Is it realistic for smaller brands or newer apps trying to make an impact on the iOS platform to try and do the same or is it best not to ‘bite the hand that feeds’ and play by the rules?

Netflix and Spotify have a huge global audience which is steadily growing and have most certainly paid their dues to Apple in the time they have been active. Both the publishers and the platform have a great deal to lose if Apple were to reinforce their standard policy and remove them from the iTunes store as a breach of use. Though saying that, do they have more to lose long term if they allow brands to start doing this?

Only time will tell how the brand giants will look to resolve the dispute and eyes will be on this rift as we move into 2019. One thing is for sure and that is that both Spotify and Netflix show no signs of slowing and continue to gain audience momentum month on month.