Netflix has officially discontinued its in-app purchases for existing customers from the App Store on all iOS devices. Traditionally, app developers have to pay a 30% cut of revenue to storefronts like Apple App Store and Google Play Store as distribution and subscription charges, however, with the dynamic swipe to payment on the web and not from the app itself, it takes a toll on storefronts like App Store undercutting millions of dollars generated in revenue annually.
As said, App Store charges a 30% of the first-time subscription to an app such as Netflix in this case. It continues to barge in cutting 15% of the revenue that Netflix earns every year for a lifetime which translates into millions of dollars per year since it is Netflix that we are talking about.
Netflix is the biggest entertainment and video streaming service and with user base counting in millions, it paid almost $256mn last year as ‘Apple Tax’ which is an extraordinary amount of money that Netflix is losing every year.
According to the dismissal for in-app purchases, all the new customers who sign up on Netflix will be redirected to an external page of Netflix’s website for payment of subscription charges before returning to the app. Although existing users will still have the option to pay via the app, they can opt for web payment for the recurring subscription charges as well.
Netflix discontinued offering in-app purchases on Android devices earlier in 2018 putting a dent on Google’s revenue. But it is not just Netflix. Epic Games which rolled out the uber-successful Fortnite exited the Google Play Store totally by featuring an external installer on its website thereby refusing to pay as much as 30% as distribution charges. Check out the Netflix app on your iOS device to find the lucrative pay by web option instead of making an in-app payment although existing users can totally use the feature it probably has an expiry date.
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