Netflix Hopes To Escape Apple's App Store Tax With Subscription Change

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Love or hate Apple there is no denying that the company is a behemoth and it is the most valuable company in the world right now. While sales of smartphones have sagged globally because people are holding onto their devices for long and computer sales sag for the same reasons, Apple continues to grow. Much of that growth is laid at the feet of the booming app ecosystem and the fact that Apple takes a 30% cut of sales and subscriptions from the App Store, with that cut decreasing to 15% after the first year of a subscription. 

Netflix is running an experiment with its iOS app that is specifically meant to save it from Apple's 30% tax on subscriptions. As it stands now, any iOS user who downloads the Netflix app and then subscribes means that Apple takes its cut. Netflix's experiment is to eliminate the ability to subscribe to its streaming service via the app and instead shoot a person wanting to sign up out to a mobile browser, thus eliminating the Apple Tax.

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Netflix is reportedly testing this new browser subscription model in 33 countries. It is reckoning that by bypassing a sign-up from within the app Apple is no longer able to take its cut. Whether or not Apple feels that way remains to be seen since one could argue that a subscription prompted by the use of an app would still be subject to the fee. Netflix is currently performing this test in countries other than the U.S. including Argentina, Australia, Austria, Belgium, Brazil, Canada, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Finland, France, Germany, Great Britain, Hungary, India, Indonesia, Italy, Japan, Korea, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Slovakia, South Africa, Spain, Sweden, Taiwan and Thailand.

You can bet if Apple doesn't find a way to recapture the lost revenue in those countries Netflix will roll the new scheme out to all countries in which it operates. Netflix has been working on increasing its profits after announcing it would spend billions on new content this year. Netflix currently has a market cap of about $100 billion and has been testing a new and costlier Ultra tier for 4K streamers.


Via:  TechCrunch
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