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Apple allows Netflix to link to external payment website

The Netflix startup screen appears on a laptop computer. (Photo by Jade87 via Pixabay/Graphic by The Desk)

Netflix is updating its app for Apple’s mobile devices that will allow iPhone and iPad users to sign up and pay for a subscription through the Netflix website itself.

The move comes after Apple began allowing certain apps to bypass its App Store payment service in favor of direct payments for features and subscriptions. It comes as Apple has faced scrutiny over its prior practice of requiring app developers to use its App Store payment feature, through which Apple receives a commission every time someone pays to download an app or sign up for a subscription.

Last year, Apple said it would allow certain apps to bypass its App Store payment processing service by linking to external websites for “account creation and management purposes” — in other words, to sell services and subscriptions. Earlier this year, Apple said an update to its terms of service allowed certain apps to request “External Link Account Entitlement” in order to bypass the App Store payment feature.

Apple says software that is eligible for the account entitlement feature are known as “reader apps,” or apps that provide specific digital content like electronic newspapers, magazines, audio (including music) or video. That multimedia has to be the primary product offered or sold within the app; Netflix’s primary product is streaming video, so it clearly qualified for the entitlement.

Netflix allowed streaming customers to purchase subscriptions through the Apple App Store for years until the company moved away from the feature in 2018. At the time, analysts said the move was intended to help Netflix keep more streaming subscription revenue for itself without raising the cost of a subscription for Apple customers who wanted to use the App Store; instead, Netflix simply told subscribers to sign up and pay for their service via the Netflix website.

Other services took a different approach: Hulu, the general entertainment streaming service largely owned by Disney, used Apple’s subscription API to allow customers to switch from App Store billing to its own native billing in order to reduce costs associated with their service. That continued until developer David Barnard pointed it out in a tweet four years ago, which caused an internal shitstorm within Apple. Hulu stopped offering the feature a short time later.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).