Apple plans to cut its 30 percent App Store fee down to 15 percent for video services, according to a report from Bloomberg. The move follows a drastic shift, announced back in June, that altered how Apple collects revenue from third-party subscription services on its platform. That rule change made it so companies could knock App Store fees down to 15 percent after a customer had been paying for a year. Now, it appears video services will be granted the 15 percent exemption from the onset.
According to the report, Apple’s only stipulation is that the video provider integrates with its upcoming TV app. That software, unveiled in October and set to be released next month, acts as a one-stop-shop for iOS and Apple TV users to browse shows and movies across a wide variety of apps, through an interface Apple controls using data it collects from participating partners. Notably, Netflix disagreed with Apple’s data-collection policy, choosing not to integrate with its TV app at launch. It’s unclear if Netflix will now agree to work with Apple in exchange for the reduction in App Store fees.
Video services that integrate with Apple’s TV app will pay half the fees
This is a critical move on Apple’s part to urge video providers like Netflix, Amazon, and HBO to work with Apple on its entertainment ambitions. The iPhone maker has reportedly had trouble hammering out deals with cable channels and broadcast networks in its efforts to launch a over-the-top cable bundle similar to Sling TV and PlayStation Vue. So Apple’s TV app is its next best shot at maintaining control over how users of its devices consume video.
By cutting fees for video services, the company is hoping it will entice major providers that have long complained about the cost of operating in the App Store. Some companies have even raised the price of subscribing through the App Store, or in some cases urged customers to sign up online instead, so as to make up for Apple’s revenue share or avoid it altogether.