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Apple may start taking a smaller cut of some App Store sales

Apple may start taking a smaller cut of some App Store sales

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An attempt to put regulators at ease

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For as long as there's been an App Store, Apple has taken a 30 percent cut of all sales made through it, but that could begin to change in the near future. According to the Financial Times, Apple plans to reduce its 30 percent fee for subscription music, video, and news apps. There's no detail on what the new model would look like, but it's almost certain that the move would be designed to curb concerns from regulators as Apple enters the subscription music business next week.

Forcing Spotify and Tidal to charge more would be a very bad look

Not only does Apple take a 30 percent cut of all app purchases — an industry standard — it takes a 30 percent cut every month that a subscription renews as well. That means subscription services end up listing higher prices in the App Store in order to make the money that they need to stay afloat: Spotify and Tidal, for instance, charge $12.99 per month in the App Store but only $9.99 per month on their websites. That's a very bad look for Apple, especially if it rolls out a competing app at $9.99 per month.

Subscription services have been complaining about Apple's cut, but only now is Apple really being put in a position where it might feel obligated to change it. Whatever Apple changes it to would have to be much smaller in order to satisfy streaming services — many just don't make enough money to be able to hand a significant amount over to Apple. Only charging these apps once or reducing the cut dramatically could make the model work.

These changes will apparently apply not just to subscription music apps, but to video and news apps as well. Those apps face similar issues with the cut Apple takes. So while it may not be competing against subscription news and video apps directly — though you can easily make an argument for it — it's still a situation that needs to be addressed. The report doesn't say that Apple's cut of subscriptions could change for other apps, however, which means that Microsoft may still be stuck giving Apple a 30 percent cut of Office sales.

Apple may also have to get more generous with the music labels if it actually wants to announce its subscription service on Monday. Bloomberg reported last night that labels are pushing for a larger revenue cut than they receive from Spotify — reportedly around 60 percent, up from Spotify's 55 percent. Apple isn't likely to love that arrangement, but it could help it look better when artists inevitably realize that they aren't getting paid very well from Apple's service either.

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