Skip to content

Apple ramps up content provider ambitions by cutting App Store fees for video services

In an effort to boost its video offerings, Apple is reportedly offering developers a discount for offering their streaming services via the App Store.

Currently, App Store developers have to pay a hefty 30 percent of their revenue from the app and any in-app purchases to Apple, which was recently reduced to 15 percent for new apps for a year. However, Apple is set to go further for video streaming apps offering them the discounted rate ad infinitum, as long as they integrate with its forthcoming TV app for iPhone, iPad and Apple TV – expected in iOS 10.2 – which will provide a universal hub for curating content and allowing users to watch video across services, without having to switch apps.

Though Apple has original content ambitions, it hasn’t quite made the plunge as a full-on video and content maker, but it’s clear it wants its Apple TV to be a hub for content consumption and purchasing – whether it’s via Apple’s iTunes stores or third-party streaming apps.

In the past, app partners have been frustrated by Apple’s significant cut, deeming it anti-competitive. However, this move clearly supports Apple’s ambitions as it aims to encourage more video content providers on-board.

The report comes from Bloomberg, which states:

“Apple has explored creating its own live TV service, but delayed those plans after difficulty getting rights from programmers and broadcast networks, who have observed with caution how Apple has assumed a dominant role in the music industry. Instead, Apple has crafted an app that relies on programming from services like Hulu, Showtime and HBO.

Some video partners have already been paying 15 percent of monthly subscription fees to Apple. The company is now extending the rate to all subscription video services as long as they are integrated with Apple’s new TV app, said the people who asked not to be identified because the changes aren’t public. To compensate for the fee, some providers increased the price of their services sold through the App Store to equal the revenue generated on other distribution channels.”

Read the full article on Bloomberg.