As game developer Epic continues its legal battle against Apple, some emails, documents and other internal communications have appeared in the courtroom. Among this treasure trove is evidence that demonstrates how Apple tried to convince video streamer Netflix to continue using Apple’s App Store In-App Payment (IAP) system. As many of you know, Apple takes a 15%-30% cut of transactions that are rung up through this platform and doesn’t allow developers to use their own IAP system (which is what Epic did).
You might recall that in December 2018, Netflix no longer allowed new users to sign up for service via the App Store. An internal Apple email thread has come to light revealing discussions that were taking place as Netflix rolled out an A/B test to determine whether it should stop offering new subscriptions via the App Store.
An email thread that ran from February through April of 2018 kicked off with a missive from Carson Oliver, the Director of App Store Business Management who said that subscribers paying for a Netflix subscription using Apple’s In-App Payment system were more likely to cancel their subscription than those who signed up using other platforms. Apple blamed this on those who received Netflix gift cards which forced them to pay using the Netflix website.
Oliver wrote in one email, “Do we want to take any punitive measures in response to the test (for example, pulling all global featuring during the test period). If so, how should those punitive measures be communicated to Netflix?” Both companies tried to get together to talk things over and Apple Services Chief Eddy Cue tried to meet with Netflix CEO Reed Hastings.
Five months before Netflix dropped support for Apple’s IAP, Apple created a presentation to show to Netflix trying to get the streamer to commit to Apple’s App Store payment platform. Apple also tried to show Netflix why it deserves the cut it takes from in-app payments run through its platform. Apple also pointed out the things that it was doing to help promote Netflix in the App Store such as featuring it more than any other partner.
Another presentation showed how Apple and Netflix could work together if the latter would agree to use Apple’s IAP. Among the suggestions, Apple said that it would allow Netflix to determine which shows Apple would feature in Netflix promos. Apple also pointed out other things that the two firms could do together including the bundling of Netflix with an Apple service and more.
The bottom line is that Apple could not convince Netflix to use the App Store IAP. In late 2018, Netflix said, “We no longer support iTunes as a method of payment for new members.”