Netflix is emailing users who have been paying through Apple iTunes since before October 25, 2021, according to 9to5Mac, The Streamable and other sources. The email informs users that Netflix will stop accepting payments through Apple from February 27, 2024, and urges them to update their new payment method on the Netflix website. Users who fail to update will lose their account and access to Netflix on iOS or Apple TV devices.
This is not a new move by Netflix. Back in December 2018, they already discontinued the option to subscribe to the service via Apple iTunes for new or existing users, requiring them to sign up on their website and use other payment methods such as credit cards, gift cards, PayPal or Google Play. They also prevented users from modifying their subscription package through Apple iTunes, only allowing them to cancel or view account information.
Netflix’s main motivation for removing long-term subscribers from Apple iTunes is to keep more of their profits. Apple’s policy requires service providers to pay 30% of the subscription fee in the first year and 15% in subsequent years. This reduces their profit margin and their ability to invest in quality content.
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By removing long-term subscribers from Apple iTunes, Netflix hopes to keep more users, as they will not have to deal with the hassle of changing their payment method. Netflix also gains full control over its pricing, service package and promotional program without following Apple’s rules. This is a key strategy to compete with rivals such as Disney+, Amazon Prime Video, Apple TV+ and HBO Max, especially in the streaming market that is becoming more and more competitive.
However, removing long-term subscribers from Apple iTunes also poses some challenges for Netflix. Some users may not be willing or able to update their new payment method due to geographical or technical constraints. Some users may also be frustrated by the change and choose to cancel or switch to other services. Moreover, Netflix may also miss out on a channel to attract new users when they are not visible on the Apple App Store, where there are millions of potential users.
In the midst of the streaming industry’s major transformations, Netflix is trying to optimize its business strategy to stay ahead. Removing long-term subscribers from Apple iTunes is a bold and strategic move by Netflix. Only time will tell whether Netflix manages to retain users, increase profits and compete with rivals or not.