Netflix (NASDAQ: NFLX) appears to be taking a cue from its increasingly mobile users and is rolling out in-app billing to a selected number of Android users in "all supported regions" via Google Play (NASDAQ: GOOG), Variety reports. The move is a big change for the SVOD provider, which previously only enabled setup and billing via its own website and app.
The news was first reported by Droid Life, which noticed the change in the release notes of the latest Netflix for Android update.
Enabling Google Play billing would open Netflix to a new market of users, many of whom buy Google Play credits in retail stores and use them for in-app purchases, rather than using a credit or debit card – something Netflix currently requires in order to sign up for its monthly service.
Netflix confirmed to Variety that the rollout will take place over the next several weeks.
The move is not surprising considering the provider's massive expansion last year to bring its service to 130 countries. In order to get more subscribers to sign up in many of those countries, Netflix needs to expand its billing options beyond the current requirement of an internationally accepted credit card. That requirement limits its reach in some countries just to "well qualified" subscribers who actually carry such a card – potentially putting a damper on Netflix profits.
With investors and analysts looking askance at Netflix's growth potential in its international markets, the SVOD provider needs to boost its subscriber numbers worldwide.
But the Google Play billing option (and, perhaps in the future, an Apple billing option) has plenty of usefulness in the U.S. market. While most current Netflix users have a billing setup through the provider, quite a few Americans still don't have or don't use credit cards to pay for online video services. YipTV, for example, has been targeting this viewer segment for several months by making 19 of its linear channels free to view – a way to lure future paying subscribers to its service. By providing an alternative payment method, Netflix could gain additional subscribers in a market that is rapidly approaching saturation.
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