Internet television network Netflix (NFLX) is taking steps to bypass the Apple App Store and avoid paying the so-called "Apple tax."
XApple (AAPL) takes 30% of revenue for third-party app sales through its iTunes App Store. For subscription services, the cut drops to 15% on renewals after the first year.
Netflix stock climbed 4.5% to 267.66 on the stock market today. Apple rose 1% to 157.74.
VentureBeat reported Friday that Netflix is no longer supporting Apple's iTunes payment method for new users on Apple iOS devices such as the iPhone and iPad. However, existing members can continue to use iTunes for renewal payments.
Netflix made the same move in May with Alphabet's (GOOGL) Google Play Store for subscribers using Android devices.
Bigger Cut For Netflix
The changes will allow Netflix to keep all proceeds from new subscribers and avoid giving a large cut to distributors Apple and Google. New Netflix users have to sign up and pay on the streaming service's website. Former subscribers who are returning to the service also will have to sign up outside of the App Store.
Netflix stock also got a lift Monday from the company's report that more than 45 million subscribers had streamed its original movie, "Bird Box," in its first seven days of availability. It was the best first-week performance for a Netflix movie, the service said. The post-apocalyptic horror movie stars Sandra Bullock.
"The news that Netflix is leaving the App Store is somewhat expected, given the company began testing alternatives to the App Store last summer," Gene Munster, managing partner at Loup Ventures, said in a blog post Monday. "The move is a fractional negative to (Apple) earnings, along with a psychological headwind to investors embracing the theme of Apple as a Service."
Spotify Looking To Bypass Apple App Store
Streaming music service Spotify Technology (SPOT) is the only other major brand at risk of leaving Apple's App Store, he said.
Spotify "has also been testing ways to avoid paying Apple for new in-app subscription purchases by forcing customers to visit mobile sites for subscription sign-ups," he said.
Meanwhile, Epic Games, maker of the wildly popular video game "Fortnite: Battle Royale," is launching its own app store. It will take a 12% cut of app sales. The service is already available for games designed for Mac and Windows personal computers. It expects to start selling games for Android devices in 2019.
Epic Games currently bypasses the Google Play Store for "Fortnite" sales, but no such move is now possible within Apple's ecosystem. However, the game publisher's actions could pressure Apple to lower its revenue-share take, the Wall Street Journal reported.
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