Netflix had a “unique arrangement” with Apple to share only 15 percent of its revenue on iOS, half of Apple’s standard rate, and it was arguing to pay even less.
Last July, Apple CEO Tim Cook testified under oath before Congress that “we treat every developer the same.” But as previously unearthed documents revealed, Apple was more than willing to give Netflix all sorts of special treatment to keep its cut of Netflix’s subscription fees.
Here’s something I haven’t seen previously reported, though: it appears Apple had already given Netflix a sweetheart deal where it took just 15 percent of subscriptions Netflix sold in its app. Normally, subscription services on iOS pay 30 percent the first year, and it goes down to 15 percent if users stay subscribed for year two, but this passage suggests Apple offered Netflix something different:
Apple wanted Netflix to renew this special arrangement in 2018 instead of dropping in-app purchases all together, and it thought Netflix might agree — because if it didn’t, its “current subs in year 1 would pop up from 15% to 30%,” wrote Apple subscription services manager Peter Stern, something App Store chief Phil Schiller confirmed.
The email chain reveals Netflix had this arrangement before Apple created an “Apple Video Partner Program,” which offers the same reduced cut in exchange for supporting Apple features like in-app purchase, AirPlay, Universal Search, and the Apple TV app, several of which Netflix rejected in 2019. Apple’s Partner Program page says “over 130 premium subscription video entertainment providers” are signed up, including Amazon Prime Video, Disney Plus, HBO Max, and Starz. No mention of Hulu or Netflix.