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Netflix trying to avoid paying Apple by testing a new payment method

Written by Matti Vähäkainu (Google+) @ 23 Aug 2018 12:36

Netflix trying to avoid paying Apple by testing a new payment method As everyone knows, Apple is raking up major profits. One of the more impressive money making machines is the app ecosystem that rains straight into Cupertino coffers without Tim Cook having to lift a finger.
Some aren't that impressed, though, and even want to bypass what the harshest critique could consider rent-seeking. Netflix might not be one of those but nonetheless wants to minimize the fees Apple collects from the in-app purchase of Netflix subscriptions.

Apple's margin for in-app purchases is a very steep 30 percent for the first year, which obviously cuts deep into Netflix's profits. After the first year the royalty share drops to 15 percent.

According to TechCrunch, Netflix is testing a new payment method which involves their own mobile website through which the payment is made. The company is currently trying this out in 33 markets in Europe, Latin America and Asia.

This doesn't mean that you'll be keeping any of the 30 percent Netflix saves. The prices are the same, slowly increasing, slightly region specific ones that you've paid before.

The people selected in this trial will be automatically redirected to the new payment page instead of iTunes when selecting a subscription. The test period is said to end in September, but if all goes well expect the method to be applied more comprehensively.

In addition to Netflix, Spotify has been avoiding Apple's royalties, especially after Apple launched their direct competitor to Spotify few years ago. Apple of course is looking more and more into the TV space as well, and has been already creating original programming for its Apple TV platform.

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