Apple’s Plan to Cut Video Service App Store Fees in Half Will Be Beneficial for (Nearly) Everyone
Toggle Dark Mode
It’s going to get cheaper for companies to sell their video content on the Apple TV App Store, according to a new report.
Apple is planning on cutting the 30 percent App Store fee that it charges subscription services down to 15 percent. This move may make third-party Apple TV partners happier, which makes sense, as Cupertino relies heavily on content services for its Apple TV strategy, according to Bloomberg.
This follows a similar move back in June that also changed how Apple collects revenue from video services. Originally, content providers could cut App Store fees in half after a customer had subscribed to their services for a year. But Apple’s new plan makes the 15 percent fee standard — no matter how long a customer has been a subscriber, according to The Verge.
The only stipulation of the new plan is that video services will have to integrate with Apple’s upcoming TV app, which was first unveiled in October and is due to be released next month. The TV app is slated to be a platform that allows users to easily browse shows, movies and videos across a wide variety of services and apps — all in one place. Of course, Apple controls the interface and collects data from its partners. Netflix, notably, chose not to integrate at launch because of this reason.
The revenue slash will probably prove to be an important step in Apple enticing video services — like Netflix, HBO and Amazon — into integrating with its TV strategy, as content providers have previously complained about the App Store’s high cost. Thus far, Cupertino has had trouble negotiating deals with cable and broadcast networks to launch a cable bundle in the same vein as Sling TV and PlayStation Vue.
And Apple’s video strategy may be important to the future health of the company. Peaking sales of its flagship iPhone has prompted Cupertino into looking at other revenue sources — such as iCloud and Apple Music. The video app market is especially competitive, however. Amazon, for example, recently began packaging content from other video services into its Prime subscription. So the TV app may be the company’s best shot at staking out a corner of that market, and maintaining some control over how Apple-product users consume video content.
While the 15% cut might help the corporations involved, it’s highly unlikely these video services will pass along the savings to consumers. We can only hope, right?
