Apple to halve App Store fees for content providers integrated with new 'TV' app, report says
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.
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
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.
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.
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.
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.
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.
and no, I don't believe Apple should give away their services for free. Especially if others are profiting and leeching off of it.
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.