Netflix customers who subscribed and pay through Apple via an IOS device or the iTunes store will need to log into their Apple ID and account settings and disable their payments. Customers should then set up their payments via the Netflix website instead. If they do not they will lose access to their account.
Why? Because the long-running payment and subscription arrangement between Netflix and Apple is coming to an end. When Netflix was a newer company establishing its brand it was advantageous to be associated with popular app platforms like the iTunes store. It helped get its name out and gain new customers. In turn, there was a financial arrangement between Apple and Netflix where the company take a 15-30% cut of in app purchases. Over time the arrangement has become less mutually beneficial.
Netflix is not exactly a start-up anymore.
On top of that Netflix has been zeroing in on ways to become more profitable. While it has strategies to continue to expand internationally it has also turned inward. One very clear move on that front has been Netflix’s crackdown on password sharing whereby it “encouraged” users who have been accessing the service via the use of other paying customers, to set up their own accounts. In turn, it is pushing cost-conscious customers to subscribe to its new ad-supported services which saves customers compared to the service without ads and gives Netflix a way to double dip by making money via subscriptions and advertising rates that can increase over time vs the fixed costs of a monthly payment.
This move could potentially bring all of the fees it has been losing to Apple back home thereby increasing its profits without even adding new customers. On the other hand, it does risk losing people along the way and causing mass confusion with its customer base.
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