Apple halves revenue share to 15% for Apple TV apps - report

Posted:
in iPod + iTunes + AppleTV edited April 2015
In what could be a bid to entice content owners, Apple has reportedly agreed to take just 15 percent of revenues earned through subscriptions on the Apple TV, rather than the 30 percent cut it takes from its other digital storefronts.




Among the providers believed to have struck such deals with Apple are Netflix, Hulu Plus, and MLB.TV, according to Re/code. Each of those services allows customers to subscribe through the Apple TV and be billed via iTunes; revenues from customers that subscribe through other avenues are not subject to the split.

The terms of Apple's deal with HBO remain unknown, but they are thought to be similar. Apple has a three-month exclusivity arrangement for HBO Now, which costs consumers $14.99 per month after a 30-day free trial.

Apple's cut is said to be significantly smaller than that taken by traditional cable companies, which extract as much as 50 percent of subscription revenue from content owners like HBO. That disparity potentially sets cable companies up for a bidding war with Apple, and could work in Cupertino's favor.

Apple is widely rumored to be in the midst of securing content deals for a new over-the-top web television service, which could launch as soon as this summer alongside a revamped Apple TV. The new service is likely to cost less than $40 per month, and might include content from Disney, CBS, Fox, Discovery, and Viacom, among others.

Comments

  • Reply 1 of 17
    MacProMacPro Posts: 18,443member
    Nice to see Apple being aggressive.

    HBO Now needs to reduce their fee to match Netflix IMHO, it is no better and perhaps not as good.
  • Reply 2 of 17
    cpsrocpsro Posts: 2,516member

    Combined with the occasional 20-25% discount on iTunes gift cards, Apple is then sometimes losing money on the Apple TV.

  • Reply 3 of 17
    bloggerblogbloggerblog Posts: 1,872member

    Unlike the AppStore and the iTunes Store, Netflix, Hulu, and MLB host their own content. Apple TV simply serves as a client, so it should be more like 0% since it's 0% on computers and iOS...

     

    I must be missing something here.

  • Reply 4 of 17
    irelandireland Posts: 17,684member
    For the love of God please refer to it as a subscription TV service. Stop calling it a web TV service. It's 2015.
  • Reply 5 of 17
    schlackschlack Posts: 703member
    well, the cable companies hand distribution. Apple TV apps require the provider to handle distribution.

    i'm sure that cost will eat up the difference pretty quickly.
  • Reply 6 of 17
    saareksaarek Posts: 1,157member

    Forget trying to make content deals, just release the app store, put 30% markup on every Apple TV sold and see the money roll in.

     

    I don't get why they have not done this simple thing already.

  • Reply 7 of 17
    rob53rob53 Posts: 2,102member
    Quote:

    Originally Posted by Cpsro View Post

     

    Combined with the occasional 20-25% discount on iTunes gift cards, Apple is then sometimes losing money on the Apple TV.


    This article doesn't mention anything about the hardware cost, only service charges. The AppleTV could have a 50% profit or 5%, we don't know. The 30% is only about what Apple takes from each company that is included on the channel list.

  • Reply 8 of 17
    SpamSandwichSpamSandwich Posts: 31,491member

    Ooh. That should have a dramatic impact on Amazon and possibly even Netflix.

  • Reply 9 of 17
    mubailimubaili Posts: 405member
    well, I am sure the beloved DoJ would find another way to declare Apple competed unfairly since HBO Now is costing $15 a month instead of the normal $9.90 if attached to customer's existing cable bill.
  • Reply 10 of 17
    eightzeroeightzero Posts: 2,503member

    Something Is Up with Apple TV. 

  • Reply 11 of 17
    saarek wrote: »
    Forget trying to make content deals, just release the app store, put 30% markup on every Apple TV sold and see the money roll in.

    I don't get why they have not done this simple thing already.

    Right, so we can have a million "apps" like Flappy Bird polluting the already tight storage of the AppleTV? No thanks.
  • Reply 12 of 17
    saareksaarek Posts: 1,157member
    Right, so we can have a million "apps" like Flappy Bird polluting the already tight storage of the AppleTV? No thanks.
    What's the difference to the current situation? It's not like Apple has all of the main bits of entertainment in one nice little App is it.

    I'd like the option to download the 5 or so apps that'd cover me.
  • Reply 13 of 17
    Quote:

    Originally Posted by SpamSandwich View Post

     

    Ooh. That should have a dramatic impact on Amazon and possibly even Netflix.


    Absolutely.  Apple has an opportunity to deliver a gut punch here.  Really excited to see what comes over the horizon.  Love love love my Apple TV and would be thrilled if I could finally cut the cord.  HBO Now is a great step in that direction.

  • Reply 14 of 17
    calicali Posts: 3,495member
    Right, so we can have a million "apps" like Flappy Bird polluting the already tight storage of the AppleTV? No thanks.

    Flappy Bird is a pre-installed Apple app now?!!!
  • Reply 15 of 17
    Unlike the AppStore and the iTunes Store, Netflix, Hulu, and MLB host their own content. Apple TV simply serves as a client, so it should be more like 0% since it's 0% on computers and iOS...

    I must be missing something here.

    I do not get any digital content outside the Apple ecosystem. So, IMHO, Apple should receive something for customers like me.

    Understand I typed purchase not use.
  • Reply 16 of 17
    Quote:

    Originally Posted by saarek View Post

     

    Forget trying to make content deals, just release the app store, put 30% markup on every Apple TV sold and see the money roll in.

     

    I don't get why they have not done this simple thing already.


    You don't get it because you are making large mistakes with two of your assumptions:



    1) You're assuming that iOS apps can run on Apple TV. They can't. They are, in fact, not at all suitable for Apple TV.

    2) You're assuming that a "30% markup" on Apple TV would make huge amounts of money, compared to, say, tens of millions of users paying every single month for TV content. Again, you are hilariously wrong here. 

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