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Due To Google’s Deal, Netflix Doesn’t Allow In-App Payments For Subscriptions

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Due To Google's Deal, Netflix Doesn't Allow In-App Payments For Subscriptions

(CTN News) – Would you like to know why Netflix cannot be subscribed directly from the Netflix app? It is necessary to open the app in a web browser and complete the payment process there in order to renew or purchase a subscription. This is due to Google’s policy prohibiting apps from offering in-app subscriptions.

As a result, Google charges a commission on all in-app purchases, which does not wish to pay.

During the ongoing antitrust trial of Google, documents and testimony revealed that in 2017, Google offered a special discount rate of 10% for its in-app payments on Android devices. In this case, Netflix would retain 90 percent of the revenue.

However, Netflix was not expecting that Google would gain control over its payment mechanisms and revenue streams as a result of the deal. In May 2018,

Netflix ceased accepting payments through Google Play.

A testified document obtained by The Verge indicates that was offered the deal in September 2017, which stated, “Bring revshare to 10% on the condition that commits fully to GPB globally.” Netflix is the only one receiving the offer at this time.

As a result, Netflix has refused Google’s offer to distribute its apps through Google Play and therefore avoids paying Google for this service. Therefore, Netflix encourages users to subscribe and pay via their mobile web browsers. Now, users can only make payments directly through their credit or debit cards or through Apple’s iTunes store.

It is reported that decision not to pay Google for app distribution is based on its concern over potential losses, even at a 10 percent fee level.

However, there were not always restrictions on in-app payments. Netflix previously paid Google a 15 percent fee for this service, but before Google terminated this arrangement, Paid a fee closer to 3 percent when it managed its own payment method.

In an effort to retain revenue, Google offered a special 10% deal to switch to Google Play Billing (GPB) before discontinuing alternative payment methods.

Netflix used to offer in-app payments through its iOS app.

In order to process payments made by subscribers through the app, utilized Apple’s in-app purchase system. From apps that sell subscriptions through the App Store’s payment system, Apple previously charged a 30% fee (or 15% for smaller developers).

However, Netflix ditched iTunes billing in 2018 to avoid paying the commission. There is now an external subscription option available in the iOS app, which, when selected, will direct users to the company’s website.

It is part of a broader movement among developers to eliminate their dependence on app stores and take control of their payment procedures. Netflix’s decision to bypass the App Store’s commission fees is part of this movement.

As well, Spotify used to allow users to purchase services within the app, but the practice was discontinued due to a dispute with Apple over the amount of commission it charged.

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