Typically, when a prospective Netflix user signs up for the service on an Apple device like an iPhone or iPad, they can pay their bill through Apple’s billing system. On the consumer side, nothing changes; it’s the same old $11 per month for Netflix access. However, when a third party uses Apple’s billing infrastructure, Apple takes a cut of the money they would usually make. For every Netflix user operating through an Apple device, Netflix is losing 15 to 30% of that monthly fee. Netflix has decided they aren’t happy with that, and at the beginning of the month, ever so quietly, they made a small change to take their money back.
In the current version of the Netflix app on Apple devices, instead of allowing users to pay their bill through Apple’s system, they are now automatically redirected to the Netflix website in their phone’s browser, where accounts can be made and bills can be paid. By going over Apple’s head and using their own site, Netflix does not have to pay that 15-30% cut. This could be bad news for Apple, as Netflix’s app has collected an estimated $1.4 billion through their app operations. Assuming Netflix continues to pull those numbers, that’s up to $400 million out of Apple’s reach. Multiple app developers have been stirred by Netflix’s move, and are considering employing similar methods to take back their cuts from Apple.
