Apple is reportedly planning to change how it handles subscriptions for video streaming services via the App Store. According to a new report from Bloomberg, Apple will cut the percentage of revenue it takes from streaming video apps in an effort to improve its relationship with those in that industry…
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The report, which cites “people familiar with the plans,” claims that Apple is looking to cut its portion of subscription revenue from 30 percent to 15 perfect for video streaming apps. Other apps that offer subscriptions see Apple’s portion cut to 15 percent only after a user has been subscribed for a year, but video apps see the benefit right from the start of a user’s subscription.
The iPhone maker intends to reduce the slice of revenue it is paid by subscription video streaming apps from the current 30 percent to 15 percent, according to people familiar with the plans. Other non-video apps see their bill from Apple halved from 30 percent only after a customer has completed a year’s subscription. Apple spokesman Tom Neumayr declined to comment.
Many streaming video apps allow users to subscribe in-app to their service, but in most instances, the video streaming service charges more for iOS in-app subscriptions than if the user were to subscribe via the web. This, of course, is in an effort to off-set the 30 percent cut taken by Apple.
At this point, it’s unclear how video streaming services will respond to this move. Ideally, those apps that charge higher subscription prices for in-app purchases will cut the price to be more in-line with out-of-app subscriptions or at least to acknowledge the smaller cut being taken by Apple.
Apple’s 30 percent cut has frustrated many subscription services. Specifically, Spotify has long voiced its frustration with Apple’s App Store policies. Apple revamped some of its subscription policies earlier this year, introducing the new 85-15 percent split for non-video apps after a user has been subscribed for a year. Spotify, however, wasn’t pleased with those changes and said that they didn’t address the “core issues.”
It’s unclear when Apple will start rolling out the new subscription model for video apps, but Apple hopes the change will improve its relationship with video studios as it continues to explore the idea of original content.