Apple Considering Change to iTunes ‘Tax’ for TV Devices: Report

Apple Computers
Feng Li/Getty Images

Apple is looking to change the rules on revenue-sharing agreements for partners’ apps, the Financial Times has reported — but only through Apple TV set-tops, evidently.

Currently, Apple charges app publishers a 30% cut of all in-app revenue. That’s similar to what Google levies for the Google Play store, with one key difference: Apple also requires publishers to apply the same fee to all subscription sign-ups initiated through the app.

Now Apple is considering revising the terms for in-app subscriptions, per the FT, although what those might be are not clear.

[UPDATE, June 5, 2:30 PT: Apple’s updated terms will apply to subscription services “delivered on Apple devices, rather than through the App Store,” according to an amendment to the FT story. That implies that only services offered through Apple TV would be exempt from the so-called 30% tax.]

The tech giant’s policy on this front has long been a point of discontent for media companies and arguably has complicated mobile-subscription services. For example, Netflix offers no in-app subscriptions via its mobile iOS app; instead, customers must visit the Netflix website in their browser to sign up, and then go back to the app to start using the service.

Spotify, on the other hand, has decided to pass on the fee to consumers, charging them $13 per month if they sign up through the company’s iOS app but only $10 per month for browser-based sign-ups. Among the bigger services, only Hulu has offered in-app iOS signups for the same price as on the Web. The company decided it could absorb the higher costs due to the additional advertising revenue it receives from views generated by paying subscribers.

Apple has long resisted changing these rules but may now have to give in because of the impending launch of its own music subscription service. Apple is expected to launch a Spotify-like music service at its Worldwide Developers Conference in San Francisco next Monday. That service reportedly will cost $10 per month, and Apple will surely offer consumers in-app sign-up capabilities as well. Regulators have been looking at the upcoming service for months if Apple charges direct competitors a premium for access to its platform, according to industry speculation.

Industry insiders have been playing close attention to a possible regulatory review of Apple’s upcoming service ever since Apple bought Beats for $3 billion last year. Beats Music already raised eyebrows when it added in-app signup on iOS devices for $10 per month —  $3 less than Spotify — just weeks before being acquired by Apple.

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