Back in December 2018, Netflix stopped offering in-app subscriptions on iOS, sending iPhone and iPad owners to the company’s website to sign up instead. The move was largely a way for Netflix to dodge Apple’s 30 percent App Store tax — if people couldn’t subscribe through the app, Netflix didn’t have to give Apple a cut.
However, new documents from the ongoing Epic vs. Apple court case revealed that the iPhone-maker fought hard to stop Netflix from leaving. 9to5Mac outlines the documents in detail, which include emails between Apple executives and Netflix seeking a resolution that would keep the streaming service in Apple’s payment ecosystem.
In the months leading up to Netflix dropping support for in-app purchases, the company wanted to A/B test removing the feature. A/B testing is a common practice with tech companies, and effectively means rolling out a change to some users to see the impact before applying that change on a wider scale.
According to the documents, Netflix was concerned that users who signed up through the iOS in-app payment system were more likely to cancel compared to people who subscribed through Netflix’s website or through other methods. Because of this, Netflix wanted to run a two-month test where it removed the in-app purchase option in select markets.
Apple considered punishing Netflix before offering a special deal to keep it using in-app payments
Unsurprisingly, Apple wasn’t a fan of the idea. The documents show that Apple execs considered taking “punitive measures” against Netflix. One such punishment was to pull “all global featuring during the test period” — featuring, in this case, likely referring to highlighting Netflix in the App Store.
However, Apple changed tunes in July 2018 when it created a presentation in hopes of convincing Netflix to keep using in-app purchases. The presentation highlighted promotional work Apple did for Netflix, claiming that Apple’s advertising had boosted Netflix downloads by seven percent. Further, Apple proposed subscriber discounts, bundling with Apple services and other perks to entice Netflix to continue using in-app payments.
It’s worth taking a moment to pause here and focus on that presentation. Apple effectively offered Netflix a special deal to keep them using in-app purchase. Epic Games also sought a special offer from Apple, and has made Apple’s unfair treatment of developers one of the crucial components of the ongoing legal fight.
It’s also worth noting this isn’t the only evidence that Apple will cut deals with companies. In 2020, emails released during a U.S. congressional hearing revealed Apple cut a deal with Amazon, reducing its App Store fee in return for getting the e-commerce giant’s Prime Video app on iPhones and Apple TV.
Obviously, Apple’s offer didn’t work with Netflix — the company axed in-app purchases at the end of 2018. But the documents provide another example of Apple using special deals to keep companies using in-app purchases and paying Apple a cut. Apple, however, still claims it treats all developers fairly.
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