Internal emails reveal how badly Apple wanted to keep Netflix using in-app purchases
Internal emails reveal how badly Apple wanted to keep Netflix using in-app purchases
Apple employees considered giving Netflix preferential treatment in order to persuade the streaming service not to abandon in-app purchases, according to internal emails revealed during the Epic Games v. Apple lawsuit. Prior to Netflix discontinuing its subscription service in order to avoid Apple's fees, an internal presentation proposed advertising Netflix in Apple's retail stores, using a portion of its cut of App Store commission fees to pay for search ads, and even bundling Netflix with other Apple services.
The emails, which were discovered by 9to5Mac, begin with an explanation of a test Netflix desired to conduct to determine the effect of disabling in-app purchases on iOS. Netflix's primary concern, according to Director of App Store Business Management Carson Oliver, was the "voluntary churn" of subscribers via the App Store. Although the exact figures are redacted, this appears to indicate that Netflix subscribers who signed up through the App Store cancelled the service at a higher rate than those who signed up through other channels, such as Netflix's website.
Given that Apple deducts 30% of subscription fees as part of its App Store policy, there are also compelling financial reasons for Netflix to reconsider using IAPs. Without Apple's cut, Netflix could retain a greater portion of each monthly subscription.
Apple vs. Netflix
Oliver inquires in Apple's initial internal responses to Netflix's plans whether the company should consider punishing Netflix if it proceeds with its test. Although there is a gap of several months between the initial email thread and Apple's subsequent Netflix discussions, the tone appears to have shifted once Netflix committed to A/B testing the removal of in-app purchases.
Apple employees created a presentation in support of in-app purchases, according to an email from July 2018. It included reminders of Apple's previous work with Netflix and floated new deals, such as offering subscriber discounts (which Apple would eventually launch in 2020) and allowing Netflix to determine which Netflix shows and movies Apple reviews in the App Store.
Apple also highlighted all of its promotion for Netflix in the App Store's editorial section. Apple also notes that Netflix was featured more than any other partner, and that content written about the streaming service's shows increased downloads by about 6% to 7%.
However, during the same presentation, Apple considered offering additional benefits to Netflix, some of which went beyond what the company has publicly offered to other developers — though the email stressed that "the 'What we could do' section includes speculative ideas for completeness, and these ideas have not yet been approved."
The presentation included email campaigns dedicated to promoting only the Netflix app, the possibility of bundling Netflix with Apple's other services, well before Apple launched Apple TV Plus or its Apple One bundle.
Whatever discussions took place between the companies, in-app purchases were still removed from Netflix's app, and the company does not appear to have suffered long-term consequences — Netflix reached over 200 million subscribers in January 2021.
What this entire email saga demonstrates is how Apple's developer policies appear to have exceptions. The presentation does not go into detail, but Apple does mention offering Netflix "video partner program benefits," which sound similar to the deal Apple struck with Amazon for Prime Video. The emails may demonstrate that Apple is willing to make concessions for lucrative and powerful partners.
Courses and Certification
iOS Development with Swift2 Course and Certificate
iPhone Basics Course and Certificate
iPad Basics Course and Certificate
Vlogging Course and Certificate
