Apple to halve App Store fees for content providers integrated with new 'TV' app, report says

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Apple is reportedly planning an App Store fee schedule revision that will see its slice of revenue from subscription video services, and potentially other non-video providers, drop from the customary 30 percent to only 15 percent.




Citing sources familiar with the matter, Bloomberg reports Apple's upcoming plan to halve its take of revenues is meant to placate media providers as it readies its own video strategy.

The new rate structure comes with a caveat, however. To be eligible for reduced App Store fees, video services must be integrated with the new TV app, the report said.

Movies and TV shows from services like Netflix are integral in the success of Apple's wider multimedia strategy, though some providers have in the past been critical of App Store fees. In particular, companies are displeased that they have to pay a premium to sell their app on the App Store, with some going so far as to label the demands as anticompetitive behavior.

For Apple, the move could ease tensions as it prepares to launch "TV," a new app for tvOS and iOS that collects into a single location movies, TV shows and other video content from multiple providers. Announced in October, TV is designed to be a one-stop video hub for Apple device users, complete with universal search options and content curation for surfacing new shows.

As noted by Bloomberg, the coming fee reduction is technically an extension of exclusive deals the company has in place with certain existing providers. Reports suggest Netflix, Hulu Plus and MLB.TV have been paying 15 percent App Store revenue sharing rates since last year, for example.

Comments

  • Reply 1 of 17
    dasanman69dasanman69 Posts: 12,976member
    Still too much 
  • Reply 2 of 17
    They need to stop picking random numbers and just get in a room with Amazon until they make a deal. There's no sense changing the number until they know Amazon will accept it. I doubt Amazon will accept anything above 3% or so.
  • Reply 3 of 17
    jayword said:
    They need to stop picking random numbers and just get in a room with Amazon until they make a deal. There's no sense changing the number until they know Amazon will accept it. I doubt Amazon will accept anything above 3% or so.
    Is it really worth it for Apple to do that just to get 3-4 shows (Amazon exclusives) on the Apple TV natively? I don't think it is. I personally would love Prime Video on my ATV but if I was Apple I would cut my rate to 1/5th just to do it. 
    calilolliverjahblade
  • Reply 4 of 17
    Guess it's make or break time for content providers to jump onboard with Apple TV.
    repressthiscalilolliver
  • Reply 5 of 17
    levilevi Posts: 344member
    Yes, time to get serious about TV content. Give us an alternative to standard cable or Sling, and sell those boxes (and services). By the way, Risk on Apple TV is fantastic 
    repressthiscalilolliver
  • Reply 6 of 17
    supadav03 said:
    jayword said:
    They need to stop picking random numbers and just get in a room with Amazon until they make a deal. There's no sense changing the number until they know Amazon will accept it. I doubt Amazon will accept anything above 3% or so.
    Is it really worth it for Apple to do that just to get 3-4 shows (Amazon exclusives) on the Apple TV natively? I don't think it is. I personally would love Prime Video on my ATV but if I was Apple I would cut my rate to 1/5th just to do it. 
    Amazon could do a Prime app for the Apple TV and not pay Apple a cut. They only have to pay Apple if allow subscriptions through the App. They obviously do not want people buying Apple TVs. They would rather you have Fire TV devices and be in Amazon's ecosystem instead of having an app inside of Apple's. All this does for my family is mean that I have both devices. I watch Prime on the FireTV Stick and watch everything else on the AppleTV. I'm not buying content on Amazon for any reason. I will occasionally rent movies using the credits from not accepting the 2 day prime shipping when I don't need it, but that is it.
    lolliverjahblade
  • Reply 7 of 17
    Why is Apple getting any money in this whole scheme at all?

    With Apple, the whole deal used to be that the user is the user, and not the product. This was the opposite of Google, where the user was their product that they sold to Ad agencies.

    Apple seems to have added the Google business model to their own way of doing business, in addition to the device selling model. It seems that a large reason Apple wants users is so they can then sell those users to content companies, or so they can sell their own content to those users.

    I am worried that with Apple also shifting to a business model where it's trying to make money from its user base, they might start making decisions which hurt the good that's come out of the user is not a product model.
  • Reply 8 of 17
    supadav03 said:
    jayword said:
    They need to stop picking random numbers and just get in a room with Amazon until they make a deal. There's no sense changing the number until they know Amazon will accept it. I doubt Amazon will accept anything above 3% or so.
    Is it really worth it for Apple to do that just to get 3-4 shows (Amazon exclusives) on the Apple TV natively? I don't think it is. I personally would love Prime Video on my ATV but if I was Apple I would cut my rate to 1/5th just to do it. 
    Amazon could do a Prime app for the Apple TV and not pay Apple a cut. They only have to pay Apple if allow subscriptions through the App. They obviously do not want people buying Apple TVs. They would rather you have Fire TV devices and be in Amazon's ecosystem instead of having an app inside of Apple's. All this does for my family is mean that I have both devices. I watch Prime on the FireTV Stick and watch everything else on the AppleTV. I'm not buying content on Amazon for any reason. I will occasionally rent movies using the credits from not accepting the 2 day prime shipping when I don't need it, but that is it.
    That's what I don't understand though. Apple is okay with Amazon delivering content to iOS users without paying them anything. But essentially they are saying that if you want an iOS user to have greater convenience in the usage of their product, you have to give them 15 to 30% of the money you were making off them otherwise.

    Apple is trying to hold user convenience as hostage in order to extract money for itself. Those are the types of decisions I find worrying with the new business model Apple is getting into, which I alluded to in my previous comment.
  • Reply 9 of 17
    supadav03 said:
    jayword said:
    They need to stop picking random numbers and just get in a room with Amazon until they make a deal. There's no sense changing the number until they know Amazon will accept it. I doubt Amazon will accept anything above 3% or so.
    Is it really worth it for Apple to do that just to get 3-4 shows (Amazon exclusives) on the Apple TV natively? I don't think it is. I personally would love Prime Video on my ATV but if I was Apple I would cut my rate to 1/5th just to do it. 
    Amazon could do a Prime app for the Apple TV and not pay Apple a cut. They only have to pay Apple if allow subscriptions through the App. They obviously do not want people buying Apple TVs. They would rather you have Fire TV devices and be in Amazon's ecosystem instead of having an app inside of Apple's. All this does for my family is mean that I have both devices. I watch Prime on the FireTV Stick and watch everything else on the AppleTV. I'm not buying content on Amazon for any reason. I will occasionally rent movies using the credits from not accepting the 2 day prime shipping when I don't need it, but that is it.
    That's what I don't understand though. Apple is okay with Amazon delivering content to iOS users without paying them anything. But essentially they are saying that if you want an iOS user to have greater convenience in the usage of their product, you have to give them 15 to 30% of the money you were making off them otherwise.

    Apple is trying to hold user convenience as hostage in order to extract money for itself. Those are the types of decisions I find worrying with the new business model Apple is getting into, which I alluded to in my previous comment.
    Amazon iOS apps for their Kindle, Prime Video and Music services don't sell through the apps. The selling part happens on Amazon's site. That's why Apple doesn't get a cut of those sales.
    edited November 2016 lolliver
  • Reply 10 of 17
    It makes no sense to me that Apple should get a cut of subscription revenue from someone else's content that Apple isn't hosting. If I subscribe to a magazine that I bought at Walmart should Walmart get a cut of of that monthly subscription fee just because I bought the magazine at Walmart? Does Apple really spend any money marketing Netflix or Amazon Prime? As far as just running the App Store in general doesn't the price of an iOS device or an TV include the cost of running the App Store? Why should that be an extra cost 3rd parties have to pay that they just pass on to consumers?
    dasanman69
  • Reply 11 of 17
    Why is Apple getting any money in this whole scheme at all?

    With Apple, the whole deal used to be that the user is the user, and not the product. This was the opposite of Google, where the user was their product that they sold to Ad agencies.

    Apple seems to have added the Google business model to their own way of doing business, in addition to the device selling model. It seems that a large reason Apple wants users is so they can then sell those users to content companies, or so they can sell their own content to those users.

    I am worried that with Apple also shifting to a business model where it's trying to make money from its user base, they might start making decisions which hurt the good that's come out of the user is not a product model.


    Where exactly are you getting all this from? I do not see Apple following a Google model at all.

    The TV App is an aggregator. I assume once you select something you can watch it provided you are authorised to. That would boil down to the individual providers. Apple is selling no information here.

    caliadamcwilliamlondon
  • Reply 12 of 17
    misamisa Posts: 827member
    I will buy an AppleTV when I can get 4K content. So far if I want 4K content the only option is Netflix and a few Youtube sources. My IPTV service provider offers 4K channels, but no content that I want.

    The content producers have a real chance here to get their 4K content onto a device before cable providers do an equipment swapout to upgrade to 4K. Once that window closes, there will be no incentive to buy an AppleTV except to those who already have decided to cancel their cable TV.
  • Reply 13 of 17
    irelandireland Posts: 17,547member
    The God-awful Netflix app is keeping me from upgrading from ATV3 with its better designed Apple template version. And ATV here has no Siri, even if Siri for Ireland was added ~a month ago. Price is also too steep here at €179
    edited November 2016
  • Reply 14 of 17
    Do we know if non-streaming apps such as Infuse will be able to integrate with this app, or only your iTunes library managed through iTunes?
    cali
  • Reply 15 of 17
    brucemcbrucemc Posts: 1,524member
    It makes no sense to me that Apple should get a cut of subscription revenue from someone else's content that Apple isn't hosting. If I subscribe to a magazine that I bought at Walmart should Walmart get a cut of of that monthly subscription fee just because I bought the magazine at Walmart? Does Apple really spend any money marketing Netflix or Amazon Prime? As far as just running the App Store in general doesn't the price of an iOS device or an TV include the cost of running the App Store? Why should that be an extra cost 3rd parties have to pay that they just pass on to consumers?
    I don't understand why you are unable to comprehend this reality of a market place.  You bring this up every single time.  No one is forced to purchase subscriptions through Apple - they can sign up outside of Apple, and all apps provide a login.  Netflix, Amazon, Hulu, newspapers, the list goes on.  Your Walmart example is false, as they do not provide that option.  If Walmart made it "super easy" to subscribe to magazines, and it increased the subscriptions, I would expect those publishers would be happy to pay for that.  Converting a customer & maintaining them is not easy or cheap.

    Some services/apps do provide an in-app subscription option though, and we can only assume they do this "because it is a benefit to them".  That some customers would not /might not have subscribed to the service otherwise.  In this case, Apple's App Store is clearly providing value (discovery, conversion, the simple sign-up, security, no sharing of credit card details with many companies, managing your subscriptions all in one place, etc).  You might have noticed that competitors (e.g. Google Play) also have a similar approach.

    To entice subscriptions, Apple has already reduced the "2nd year & beyond" to 15%.  What is described in this article is another such move. 

    You might not like it, and I am sure if you were running a business you would be happy to provide lots of services for free with no benefit to yourself.  However, the reality is that if value is provided, then a price is warranted.
    williamlondonstompypatchythepiratecali
  • Reply 16 of 17
    That's what I don't understand though. Apple is okay with Amazon delivering content to iOS users without paying them anything. But essentially they are saying that if you want an iOS user to have greater convenience in the usage of their product, you have to give them 15 to 30% of the money you were making off them otherwise.

    Apple is trying to hold user convenience as hostage in order to extract money for itself. Those are the types of decisions I find worrying with the new business model Apple is getting into, which I alluded to in my previous comment.
    Except, Amazon already has both an iPhone and an iPad Amazon Prime Video app. Moreover, you can even AirPlay video from either app to your Apple TV. Amazon clearly doesn't have any problem with Apple or the viewing of their content on iOS devices. So what then is holding Amazon back from delivering an Apple TV app?
  • Reply 17 of 17
    calicali Posts: 3,495member
    15% might be too much of a discount but I'd like to see Netflix join.

    and no, I don't believe Apple should give away their services for free. Especially if others are profiting and leeching off of it.

    jayword said:
    They need to stop picking random numbers and just get in a room with Amazon until they make a deal. There's no sense changing the number until they know Amazon will accept it. I doubt Amazon will accept anything above 3% or so.
     This has ZERO to do with Amazon. I have no idea how you came to the conclusion that Apple altering the rates for an entire industry is for one tiny player. 

     Apple is already at the point where Amazon is pretty much a non-issue. 

     I would rather have Vudu support 100 times more than Amazon. 







    williamlondon
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