Netflix Wants to Avoid Apple App Store Fees

Netflix Inc. (NFLX) is testing a new payment feature designed to stop Apple Inc. (AAPL) from taking a cut of its revenue streams.

The streaming video giant is preventing new and existing customers in Europe, Latin America and Asia from paying for subscriptions through iTunes, redirecting them instead to sign up to its service via a mobile version of Netflix's own website, according to TechCrunch. This move to bypass Apple, which takes a 30% share of new subscription revenue and a 15% cut on renewals made on its platforms, appears to form part of the Scotts Valley, California-based company’s bid to extract maximum profit from slowing top-line growth.

In a statement to TechCrunch, Netflix confirmed that it is now "testing the iTunes payment method" in 33 countries, having first rolled out the experiment in 10 countries in June. The test is expected to run until Sept. 30.

"We are constantly innovating and testing new signup approaches on different platforms to better understand what our members like," a Netflix representative said to The Verge. "Based on what we learn, we work to improve the Netflix experience for members everywhere."

The streaming video giant isn’t the first company to encourage users to shun iTunes. On its website, Spotify Technology S.A. (SPOT) said it discontinued an option that enabled new customers to sign up for its service via Apple's app. In the same post, the music streaming firm urged its existing subscribers to cancel automatic renewals of Spotify payments with the iPhone maker in order to resubscribe directly.

Netflix is currently calling its own move to bypass Apple a test. However, it is unlikely that the company’s plans to make this experiment a temporary one. (See also: Apple's Biggest Challenge, Slowed Growth: Analyst.)

Netflix recently stopped allowing new or rejoining customers to use Alphabet Inc.’s (GOOGL) Google Play to pay for its service. That decision, coupled with its shunning of iTunes, indicate that the company views direct billing as a sensible solution to lift profits as revenues slow. (See also: Netflix's Bullish Engulfing Signals More Upside Ahead.)

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.