If you log into your Netflix account on your iPhone or iPad and check to subscribe to Netflix, you’ll be redirected to Netflix’s website to make the payment but it wasn’t the same earlier. Actually, according to the stats, Apple made a whopping 3.30% commission on subscription charges every time a user subscribes or renews to Netflix which is estimated at 30% of the $11/mo subscription charges.
According to Market Watch, Apple charges between 15% to 30% for every in-app purchases made via App Store which is why there are many impending cases against Apple since it has been termed as an unfair monopolist due to its dominance over all the apps on iPhones and iPads.
Apple App Store failed under the services category which accounts for a whopping one-third of what Apple generates every fiscal year. Since iPhone sales are stumping at a phenomenal rate of 25%, the digital services category has become a profit engine but might not stay for long.
Spotify, a popular music streaming service, adds the cost of Apple fees i.e. $3 along with its $9.99/mo subscription model. Put together, all such apps account for more than $46 billion in revenue this year alone. This is the reason why Spotify moved away from App Store as it now allows payment via its own channel thus, reducing the overall subscription cost and it did the same with Google Play Store for Android devices.
Coming back to Netflix, last year, the video-streaming service made paid a whopping $110 million as Apple fees which are the highest among all non-gaming apps on App Store and there are 30,000 other apps that accept payments via Apple Store. This got Netflix thinking about the parasitic loss that Apple puts app developers after Epic Games’ Tim Sweeney plugged out of App Store to create its own video game store last year reducing the fees to a staggering 12% which is something it charges and it is still one-third of what Apple charges from app developers.
These instances have caused a lot of frenzy in the technology circuit as other apps could break out from App Store as well after Netflix, Spotify, Epic Games left a considerable dent in the overall revenue generation per fiscal year.