Apple Relaxing Its App Store Rules Help SPOT and NFLX Stocks Rally on Wall Street

UTC by Bhushan Akolkar · 3 min read
Apple Relaxing Its App Store Rules Help SPOT and NFLX Stocks Rally on Wall Street
Photo: Unsplash

As part of the Japanese Fair Trade Association, Apple decided to relax its app store rules. However, gaming apps do not get the concession of bypassing apple’s payment system.

Amid all the hush-hush, tech giant Apple Inc (NASDAQ: AAPL) has finally decided to relax its App Store rules. The tech giant agreed that some apps will be allowed to provide a link to the website to signup for subscriptions. Thus, it will allow app developers to bypass Apple’s 15% to 30% cut from the gross sales. As a result, apps like Spotify Technology SA (NYSE: SPOT) and Netflix Inc (NASDAQ: NFLX) stand to benefit the most from it.  The stocks of these companies reacted to the news with a rally. This will allow streaming businesses to fetch higher margins on subscriptions from iPhone users. It will also allow them to potentially convert iPhone customers to native subscribers without ceding additional cuts to Apple.

However, these rules don’t apply to all transactions on the App Store. Game-oriented in-app purchases have to mandatorily use Apple’s payment system. However, those falling in the “reader apps” category that links to content subscriptions can offer a service without a subscription handled via Apple.

This concession to apps from Apple comes as part of the Japanese Fair Trade Association. however, as said, it doesn’t all apps on the App Store.

Spotify has been complaining about this rule since 2016. The music streaming service provider also noted that the Apple rules have caused grave harm to the company. Despite the recent concession, Spotify executives aren’t completely happy. On Thursday, September 2, Spotify chief legal officer Horacio Gutierrez tweeted:

Commenting on the same, Spotify founder Daniel Ek further added:

“This is a step in the right direction, but it doesn’t solve the problem. App developers want clear, fair rules that apply to all apps. Our goal is to restore competition once and for all, not one arbitrary, self-serving step at a time. We will continue to push for a real solution”.

Spotify and Netflix Stocks Rally

Soon after the Apple announcement, stocks of Spotify (NYSE: SPOT) and Netflix (NASDAQ: NFLX) rallied on Wall Street. The SPOT stock was up 6.55% up closing at $255 levels.

Despite the massive bull run this year, Spotify has had a hard time on Wall Street. On a year-to-date basis, the SPOT stock is still down 18.32%.

On the other hand, the NFLX stock was up 1% yesterday. Other stocks, like Tinder’s parent company Match Group (NASDAQ: MTCH) was up 6%. Similarly, the Bumble stock (NASDAQ: BMBL) stock was up 4.41%. 

Until now for new users, the Netflix app downloaded from App Store read the message: “You can’t sign up for Netflix in the app. We know it’s a hassle”. Post Wednesday’s rule update, Netflix can now provide users the link to their website to sign up for its services.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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