Tags: apple | tax | media | companies

New 'Apple Tax' Rules Could Change the Game for Media Companies

Friday, 05 June 2015 03:04 PM

Good news for media companies: Paid content on mobile could soon become a lot more profitable. That's because Apple is looking to change the rules on revenue sharing agreements for iOS app publishers, according to a Financial Times report.

Apple is currently charging app publishers a 30 percent cut of all in-app revenue. That's similar to what Google is charging on its Play Store, with one key difference: Apple is also requiring publishers to apply the same fee to all subscription sign-ups initiated through the app.

This has long been a point of discontent for media companies, and arguably complicated mobile subscriptions. For example, Netflix offers no in-app subscriptions at all via its mobile iOS app; customers have to instead 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 decided to hand down 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 been offering in-app sign-ups 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 long resisted changes to 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 Developer Conference in San Francisco next Monday. The service will reportedly cost $10 a month, and Apple will surely offer consumers in-app sign-up capabilities as well. Regulators could intervene if Apple charges direct competitors a premium for access to its platform.

Industry insiders have been playing close attention to a possible regulatory review of Apple's upcoming service ever since Apple bought Spotify competitor Beats Music as part of its $3 billion Beats Electronics acquisition last year. Beats Music already raised eyebrows when it added in-app sign-up for $10 a month -- or $3 less than Spotify -- merely weeks before being acquired by Apple.

© 2021 Thomson/Reuters. All rights reserved.


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Good news for media companies: Paid content on mobile could soon become a lot more profitable. That's because Apple is looking to change the rules on revenue sharing agreements for iOS app publishers, according to a Financial Times report. Apple is currently charging app...
apple, tax, media, companies
360
2015-04-05
Friday, 05 June 2015 03:04 PM
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