Emails reveal Apple's desperation to prevent Netflix ditching in-app purchases
It is well known that Apple charges a 30 percent commission on in-app purchases (IAP) per its App Store policy. Now, within the Epic Games-Apple lawsuit documentation, 9to5Mac spotted interesting internal Apple emails showing that the company was trying hard to convince Netflix to not abandon IAPs. Although Netflix eventually removed IAPs, the emails show that Apple isn't impartial to all developers.
In December 2018, Netflix had stopped allowing new users to sign up for a subscription using its app for iPhones. 9to5Mac reports that the recently-revealed internal email thread began in February 2018 when Apple learned that Netflix planned to conduct an A/B test regarding the use of the App Store's IAP system. The email thread reportedly ran until April 2018.
In the opening email, Apple's director of App Store business management Carson Oliver wrote that a higher than usual number of people using the company's IAP system were ending their Netflix subscriptions than on other platforms. In the email, Oliver also warned Apple might take "punitive measures" responding to Netflix's A/B test such as "pulling all global featuring during the test period".
After Netflix proceeded with the test, Apple drafted a presentation in July 2018 to convince the streaming giant to continue with Apple's IAPs. The presentation attempted to justify Apple's commission by highlighting things the Cupertino-based company was doing for Netflix at the time. These efforts included offering subscriber discounts and letting Netflix choose the shows and movies Apple writes about in the App Store.
Apple highlighted that it promoted Netflix in the App Store's editorial section, featured more of its content than any other partner which boosted app downloads by around seven percent. In the same presentation, Apple reportedly devoted a section to "pie in the sky ideas" that hadn't been approved. It suggested using a part of the subscription fees for App Store advertising.
Apple went on to float other ideas such as email campaigns promoting Netflix, bundling Netflix with other Apple services (well before Apple TV Plus launched or the Apple One bundle was announced). These proposals illustrate that Apple was willing to bend the rules for Netflix to retain a large share of revenue it generated for Apple.
Although details quantifying Apple's efforts were redacted from the documents seen by 9to5Mac, it highlights Apple's hypocrisy. On one hand, Apple refused to budge when Epic Games alleged "monopolistic and anti-competitive" practices. But on the other hand, it went out of its way to convince Netflix. Nevertheless, Netflix stopped using Apple's IAPs. Its user count surged by 15.8 million in 2020.
