Now you won't even need to get off the sofa to find your laptop before you start binge-watching Netflix. The company has added in-app purchases to its iOS apps that allow you to subscribe directly from the Netflix app on your iPhone or iPad, taking after other streaming services such as HBO Now, Spotify, and Hulu, all of which already supported in-app subscription. Netflix announced the update with a clip from its original show Orange Is the New Black, in which inmates "Crazy Eyes" and Taystee (played by Uzo Adubo and Danielle Brooks) discover an iPhone in Litchfield prison, and try to comprehend Siri.
Netflix has had iOS apps since 2010 but may have held off on introducing in-app purchases because of Apple's infamous App Store tax. Apple has traditionally taken 30 percent out of money earned from in-app purchases, forcing some companies who allow sign-ups through in-app purchases to inflate their monthly costs to cover the shortfall. Spotify, for example, raised its premium subscription service from $9.99 a month to $12.99 a month when purchased through its iOS app. Netflix, on the other hand, is offering the same monthly rate for people who buy through iOS as it does for web sign-ups.
In a few cases, Apple has reduced its contentious tax, allowing a handful of subscription services to pay a cheaper rate. Earlier this year, Recode reported that Apple was only charging high-profile streaming companies — including Netflix, Hulu, and MLB.tv — a 15 percent tax rate for subscribers who signed up through Apple TV, rather than the typical 30 percent. It's not yet clear whether Netflix was offered a similar deal for sign-ups coming from its updated iOS app.
Unlike Spotify, Netflix is offering the same subscription price on iOS as on the web
Music industry sources have railed against App Store tax, arguing that it allows Apple's own Apple Music an unfair price advantage over rivals like Spotify and Rdio, and allows the company to exert undue influence on the industry. Just before it relaunched its Beats streaming service earlier this year, Apple pushed Spotify to ditch its free tier, a move that prompted an investigation by the Federal Trade Commission. In addition to the tax rate, the FTC looked at a number of stipulations that Apple put on competing music services — including a ban on free promos and family plans — that the company offers in its own Apple Music product.
Apple's official App Store Twitter account referenced Netflix's OITNB clip with a cry-laugh emoticon, but relations may not be so cordial if — as is widely rumored — Apple launches its own streaming TV service. That would put both companies into direct competition, and could set up a similar situation to that currently unfolding in the music industry, with Apple able to charge its competitors money every time they get a new iOS subscriber.