Netflix now allows you to binge watch your favorite shows without getting out from the coziness of your sofa to look for the laptop. The streaming firm has added in-app purchases to its iOS apps, allowing the iPhone and iPad users to subscribe directly from the Netflix app.
Netflix at par with rivals
In-app subscription was already supported by other streaming services such as HBO Now, Spotify and Hulu. Apart from bringing Netflix at par with the rivals, in-app subscriptions on the iOS, highlights the growing importance of the mobile devices in our daily lives. Many surveys have proved that more and more people are making use of the smartphones and tablets for watching a video, with many of them using apps than the mobile sites for viewing the content.
Even Netflix had the iOS app since 2010, but it did not support in-app purchases probably because of the infamous App Store tax of Apple. Apple imposes a 30% tax on the earnings made from in-app purchases, thus forcing some companies, who allow sign-ups through in-app purchases, to raise their monthly costs to cover the added expense.
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Spotify is one such example, whose premium subscription service costs $12.99 a month when purchased through its iOS app, versus $9.99 a month through the web. However, Netflix is charging the same whether purchased through the iOS or web.
Apple’s controversial App Store tax
Apple brought about a reduction in its contentious tax in few cases, charging cheaper rate for a handful of subscription services. According to a report from Re/code released earlier this year, Apple was charging only 15% (vs. the usual 30%) tax from the high-profile streaming companies (Netflix, Hulu and MLB.tv) for subscribers who signed up through Apple TV. Whether or not a similar deal is offered to Netflix for signups coming via the iOS app is not clear for now.
Apple’s App Store tax has faced opposition from several music industry sources, who argue that it gives Apple Music an unfair price advantage over rivals like Spotify and Rdio, thus allowing the company to exert undue influence on the music industry. Prior to re-launching Beats streaming service earlier this year, Apple forced Spotify to give away its free tier. This move resulted in an investigation by the Federal Trade Commission (FTC).