More and more people are turning to digital videos, be it streaming, rental, or outright purchase, during these times of being copped up indoors. That is naturally a prime opportunity for distributors and services to advertise certain features, including free offers, and get more subscribers. Those don’t necessarily translate to an exponential rise in profits, especially if they have to pay some “tax” to platform owners like Google and Apple. Almost out of the blue, Apple is now relaxing its much-criticized 30% cut from certain video apps, allowing those apps to keep 100% of the subscriptions, at least for now.
The 30/70 revenue sharing between developers and platform owners is a well-known and also unpopular business practice, especially in the mobile market. This has even lead to one of the most high-profile revolts against such a system, creating the Epic Games Store to challenge Steam and the Google Play Store. The likes of Spotify and Amazon have also complained against such a practice on Apple’s side and, surprisingly, Apple is budging a bit.
The company confirmed to Bloomberg that it has started a new program that will allow “premium subscription video entertainment providers” to charge viewers using their own system instead of Apple’s built-in payment system. The latter, which Apple always touts to be more secure, would also mean Apple will take a 30% cut of those payments. By letting services use their own system, they’ll be able to keep all of it instead.
Amazon Prime Video and Vivendi’s Canal+ are reportedly some of the first to jump on this program. Apple also advertises the benefits of the new program that include single or zero sign-on convenience across its platforms as well as integration with Apple TV and Siri.
This change of direction, of course, only applies select premium video services and not to the whole app ecosystem. It also only benefits those with their own subscription payment systems outside of Apple’s. How long this program will last is also not stated and could simply be a temporary arrangement during the COVID-19 pandemic.