Netflfix and iTunes

By: Nick Gambino

Netflix is not only king of streaming video content but also happens to be one of the most lucrative iOS apps for Apple. Now it appears Netflix is looking to change that. The video streaming giant is testing a system that bypasses iTunes billing, TechCrunch reports.

“TechCrunch has learned and confirmed that Netflix, in its own words, is ‘testing the iTunes payment methods’ in 33 countries,” the article says. “More specifically, Netflix is testing how to bypass iTunes. Until September 30, new or lapsed subscribers in selected markets across Europe, Latin America and Asia will be unable to pay using iTunes. They are instead getting redirected to the mobile web version to log payment details directly with Netflix.”

A test in 33 countries is pretty significant and indicates Netflix is most likely very serious about moving forward without iTunes involvement in monthly payments.

The countries currently being directed straight to Netflix’s site for payment and sign up are: Argentina, Australia, Austria, Belgium, Brazil, Canada, Colombia, 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.

Subscription services have always shared a cut of the monthly payments paid to them through iTunes billing. At one time they were paying a whopping 30% until Apple, in an effort to placate major services like Spotify and Netflix, dropped it to 30% for the first year and then only 15% every year after that.

While that no doubt helped to quell some of the bad blood, Apple’s foray into music streaming with Apple Music and now video streaming with original content, has no doubt placed them in direct competition with the two behemoths. Common sense would suggest Netflix would probably rather stop funding their direct competitors. If they can set up direct billing and bypass iTunes billing altogether they’ll enjoy larger profits themselves while delivering a hefty blow to Apple’s revenue stream.

If successful, this may set off a chain reaction of other apps following suit. Though the test may also prove unsuccessful and be simply labeled a failed experiment. Only time will tell, in hindsight, if Apple should have left streaming original video content alone instead of pissing off the great red giant.


Nick Gambino is a regular script writer and tech beat reporter for NewsWatch. He lives in Northern Virginia with his wife and daughter.