It's now 2019, but the new year begins with some unhappy news for Apple. The company just lost up to $700,000 per day in iOS revenue because Netflix decided to completely bypass the iOS App Store tax.
You may remember back in August Netflix started experimenting with working around Apple's 30 percent cut on iOS. The payment is required for transactions carried out through the App Store using the iTunes payment method. So in 33 countries, Netflix started redirecting iOS users to their mobile browser instead to sign-up for the app. In so doing, Apple isn't entitled to its cut.
As TechCrunch reports, the experiment must have been a success as Netflix just rolled out the change globally. Netflix earned an average of $2.4 million per day through iOS last year, which meant Apple's cut was between $350,000 and $700,000 per day depending on how many of the subscriptions had fallen to the 15 percent tier which comes in after the first year. Regardless, that's enough money for Apple to notice has gone missing.
Netflix already made this change for Android users in May last year, so it was only a matter of time before iOS users got the same treatment. For Netflix, it means a lot more cash every month from mobile users and with minimal risk it will stop new users signing up. The only real loser in all of this is Apple, but there's very little the company can do about it without going to war with the very popular media streaming service.
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By pushing both Google and Apple out of the loop, it should make cheaper mobile-only Netflix subscriptions more viable. Netflix is already experimenting with this in Malaysia where a $4 mobile-only plan was offered to test the waters. Could we see more of those tests being run in 2019?