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Netflix Gets Pass on New Apple Subscription Policy

16 Feb, 2011 By: Erik Gruenwedel


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Netflix won't have to give Apple a 30% cut for new subscriptions generated through its app from Apple's App Store, making the service exempt from Apple’s new app subscription policy.

Taking a page from News Corp.’s newly launched “The Daily” app, Apple Feb. 15 said it would take a 30% cut from all subscriptions for magazines, newspapers, video and music, among others, purchased through its App Store. The apps allow for content distribution to the iPhone, iPad and iPod Touch devices.

In addition, Apple mandated that all third-party subscription plans mirror terms offered through the App Store.

While Apple said the new policy would enhance publishers’ ability to expand their digital audiences, scuttlebutt suggested Netflix would not be happy watching nearly a third of its monthly subscription revenue disappear. A Netflix representative was not immediately available for comment, but Business Insider reported Netflix was exempt from the policy, citing a source familiar with matter.

Netflix was an original app when Apple last April launched the popular iPad, which controls more than 75% of the burgeoning tablet market, according to Strategy Analytics. With ubiquitous availability among more than 200 CE devices, Netflix remains an important ally to Apple.

Meanwhile, Google Feb. 16 jumped into the fray, announcing it would “only” take a 10% cut for digital subscriptions generated through its Android platform.

Google, in a blog post, unveiled the platform, dubbed “One Pass,” whereby content owners can sell content via Android-based apps or secondary websites without additional charge. Existing print customers also can receive free or discounted digital content from publishers, according to Google.

Netflix reportedly is readying an Android app that would allow content streaming to Google-based smart phones and tablets.

Forrester Research last month reported that neatly 50% of tablet owners use the device to read periodicals. Analyst James McQuivey said Apple’s stance could backfire and lead publishers to pushing deals toward Android users or app alternatives.
 



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