Quick Links
Key Takeaways
- Netflix is informing subscribers in some territories that they need to stop paying through iTunes billing.
- Subscribers who were on the old Basic plan are being forced onto either a more expensive plan or a cheaper plan which includes ads.
- Netflix’s move allows it to avoid paying the Apple Tax of 30%, as Apple takes a cut of all App Store transactions.
Netflix is once again cracking down on people paying for the streaming service through Apple/iTunes billing. So, if you have been paying for Netflix this way for years, you may now be forced to switch to paying for Netflix directly.
Netflix Stops Subscribers Paying Through iTunes
As first reported by Cord Cutters News, Netflix has started informing customers that they need to switch from paying through Apple to paying directly. This affects people in “some territories,” including the US and Canada, who are currently on the Basic plan.
Netflix axed the Basic plan costing $9.99/month in 2023, and updated its tiers to Standard with Ads, Standard, and Premium. Anyone already on the Basic plan could stay at that tier and only pay the $9.99/month asking price. However, anyone signing up new (including after canceling) or changing their subscription is forced to switch to one of the new tiers and pay the new asking prices.
That now includes those affected by this latest change, as switching from paying through Apple to paying Netflix directly represents a change of subscription. This has led to some users losing their grandfathered Basic plan, and being faced with either paying considerably more for a Standard or Premium plan, or paying less but accepting the need to watch ads.
Netflix spokesperson MoMo Zhou told The Verge that this change affects “members on the basic plan who were using an iTunes method of payment”.
As long ago as 2018, Netflix stopped anyone from signing up for its service through the App Store using an in-app purchase. But now, Netflix is also forcing existing subscribers in some territories to switch to paying for the service directly using a credit or debit card. This closes a loophole that has existed for years.
Why Netflix Wants You to Pay Directly Instead
The obvious reason why Netflix wants you and your fellow subscribers to pay directly is the so-called “Apple Tax”. Apple takes a 30% cut of App Store transactions, including subscriptions. This means that 30% of any price paid for Netflix through iTunes billing goes to Apple rather than Netflix.
By switching subscribers away from paying through Apple and paying directly instead, Netflix can take the full cut itself. The added bonus is that forcing people to switch payment methods means they also need to switch plans. Which, whether through higher prices or advertising, suits Netflix.
Is this fair? While it must be annoying for anyone used to paying $10/month for their fill of The Crown and Squid Game, it makes absolute sense from a business perspective. Why give Apple a cut of your profits and enable users to stay on abandoned plans when you can fix both with one change of policy?
Still, Netflix users used to paying for the old Basic plan through Apple will be rightly aggrieved at being forced to switch—especially as the Standard plan costs $15.49/month, with Premium costing $22.99/month. The only way of avoiding a considerable bump in price is to opt for Standard with Ads, which only costs $6.99/month but, as the name suggests, forces you to watch ads.
