Netflix’s clever 'Apple tax dodge' adds new external sign-up button

The Netflix iOS streaming app now circumvents Apple's much-maligned 30% cut

➡️ The Shortcut Skinny

• 💻 Who: Users can more easily subscribe to Netflix on iOS, not just on a PC

• 📱 What: Netflix added an external subscription button to its iOS app

• ⏲️ When: It’s available now in the latest Netflix iOS app update

• 💰 Why: Apple is facing antitrust lawsuits, so it’s opening up its walled graden

• 📖 How: Apple opened an external subscription API to ‘reader’ apps

• 🍎 Where… it can go wrong: Apple says it's "not responsible for the privacy or security of transactions.” You trust Netflix, sure, but are all third-party app devs going to send you to a reliable external website?

The Netflix iOS app update comes with an interesting change in functionality: users can now subscribe to the streaming service thanks to its new external subscription button that appears in the app at sign up.

Apple recently opened up the ability to let users subscribe outside of the App Store architecture to "reader" apps – any app that offers digital content like music, video, books, and more – earlier this year in the wake of multiple antitrust lawsuits. 

The Netflix app update for iPhones and iPads, first spotted by 9to5Mac, takes advantage of the new iOS API for reader apps in order to give the option to subscribe externally – thus ridding Netflix of the infamous 30% cut Apple takes on sales made within the confines of its App Store.

Four years in the making

This new update marks the first time Netflix users have been able to easily subscribe on iOS devices since 2018. Over the last four years, the streaming service would display a message instructing new subscribers to sign up through a web browser, which could be done in Safari or another browser on a phone, tablet or computer. As of today, you’ll be able to automatically open a new window, allowing the user to almost seamlessly continue the subscription process.

Apple's privacy concerns

Apple is attaching a warning to this new method of subscribing to services, saying the use of an external system could be compromising.

 "Any accounts or purchases made outside of this app will be managed by the developer 'Netflix,'” cautions the on-screen prompt. “Your App Store account, stored payment methods, and related features, such as subscription management and refund requests, will not be available. Apple is not responsible for the privacy or security of transactions made with this developer."

This is unlikely to be a problem when the developer is indeed “Netflix,” however, users could be lured into scams if nefarious apps begin to point people to external websites outside of the safety of the Apple App Store.

A win for Netflix, but also a diversion

The Netflix iOS app update will allow the company to generate more sign-ups without having to go back to paying Apple 30% of the revenue generated through the iOS app. This is only the beginning – you’ll be on the hook soon, too.

Netflix password sharing will be a thing of the past when it implements a $2.99/mo per extra household fee if you share your Netflix password outside of your primary home. The new initiative, currently being beta tested in Latin America, impacts users who share their accounts with televisions in different homes; mobile devices like phones, tablets and laptops are exempt. 

Additionally, Netflix is planning to debut a new cheaper ad-supported tier in 2023 to increase subscriber retention. Considering Netflix lost $50 billion in a single day in April 2022, it has to do a lot of penny-pinchings to make up for that loss.