Netflix, the world-renowned streaming giant, made a striking decision recently. They decided not to allow their customers to use iTunes as a mode of payment for their subscription. This might seem inconsequential, but it has far-reaching implications for both Apple and Netflix.
The change came into effect as Netflix aims to increase control over its profits. Previously, a segment of their earnings were passing on to Apple. This was a result of the system adopted in the app, where payments were collected automatically via iTunes.
However, Netflix decided that it was time to stop giving away a portion of their profits to Apple. To boost its net revenue. The move also serves to show the influence Netflix holds in the streaming services market. As it is a platform holding millions of subscribers worldwide and being able to govern independently how it operates.
Indeed, the decision is radical, something we have yet to see in the industry. Yet, it also reveals how major players like Netflix can influence how the market functions. This step also presents Netflix as a disruptive force, willing to challenge established methods for their business growth.
Impact on Existing Subscribers
The changes Netflix made don't have a massive impact on existing subscribers. Subscribers, who already paid through iTunes, can continue to do so. Unlike new or returning subscribers, who will not see any option to pay through iTunes.
Some users may find it inconvenient, especially those who are familiar and comfortable with using iTunes. But the change is unlikely to deter a significant number of users from subscribing to Netflix. The streaming giant is too valuable a platform to let go of because of changes in payment methods.
However, there may be some initial confusion. Some users may wonder why they can't use iTunes to pay. To mitigate this possible confusion, a clear explanation in the payment section can be helpful.
Despite potential resistance from some users, Netflix's move is not entirely unexpected. Several big players have followed similar strategies. Companies like Spotify have ceased to allow subscriptions via Apple's app, for similar reasons.
The Market Impression
From a market point of view, this move by Netflix creates an interesting precedent. It pushes the boundaries of what is considered normative in the app market. Essentially questioning the need for sharing a portion of your earnings with the platform on which your app runs.
Netflix's move sparked a conversation about the relationship between digital platforms and the apps they host. The bold move by Netflix prompted other subscription services to reconsider their strategies.
As bigger services continue to demand more autonomy and control over their revenues, one can anticipate more of such moves in the future. The very need to share a slice of your revenue with the digital platform is being questioned.
If enough key players follow in Netflix's footsteps, one can expect market standards and expectations to shift. Apple, and other digital platforms, will need to find new ways to sustain their revenue streams.
Netflix: A Trendsetter
All of this points to Netflix being a trendsetter in the industry. Whether it's for its exclusive content, user interface, or corporate decisions. They're not afraid to change the status quo and take bold steps.
Furthermore, this decision goes on to show the confidence Netflix has in its user base. They believe their users will stick with them, regardless of changes in payment methods.
This move by Netflix also reaffirms this belief. They are confident enough to believe that their service is so valuable that customers would not want to miss it over a change in the payment system.
To conclude, Netflix’s decision to step away from iTunes brings a new shift in app market norms. This step places pressure on digital platforms to reevaluate their revenue inflow strategies. Only time will tell how things pan out following this key shift in the streaming market.