Amazon and Apple are feuding over online video: Amazon doesn’t sell the Apple TV on its site, and owners of the Apple TV device can’t get the Amazon Prime Video streaming app.
Amazon CEO Jeff Bezos explained why earlier this month:
When we sell those devices, we want our player — our Prime Video player — to be on the device, and we want it to be on the device with acceptable business terms. You can always get the player on the device. The question is, can you get it on there with acceptable business terms?
Well, Apple just changed its business terms — now it’s up to Amazon to decide if they’re “acceptable.”
On Wednesday, Apple announced that it will take a smaller share of money from app developers who sell subscriptions through Apple apps.
Previously, Apple took a 30% cut of any transaction initiated through an Apple app — including monthly fees. That’s a big issue for TV services like HBO Now, which would see a substantial proportion of its revenue go to Apple while it provides an (often expensive) service. (That’s why if you sign up for Spotify from an iPhone, it will charge you more than if you sign up from a browser.)
Now, Apple is letting developers keep 85% of revenue if their customers continue to subscribe to a service for longer than a year. After 12 months, Apple’s cut is effectively halved.
This change has less to do with iPhone apps than it does with new streaming video services on Apple TV.
In fact, Apple has already quietly been offering TV partners a deal with a 15% cut for most of the past year. Recode’s Peter Kafka writes:
While Apple and its partners have never talked about it publicly, my understanding is that a handful of video services, including Netflix, Hulu Plus and pro-baseball’s MLB.TV, give Apple 15 per cent of their monthly fees for any subscriber who signs up on Apple TV.
As of now, most of the apps on Apple TV only stream video to people who have pay TV subscriptions, such as DirecTV or cable.
But this tweak means that a channel that wants to provide a paid experience that you can sign up for on Apple TV will be able to keep more money from those subscriptions than they used to — possibly encouraging them to take a second look at signing up new customers through Apple’s set-top box.
Whether Bezos finds these new terms to be more “acceptable” remains to be seen. Bezos may not want to send any revenue from Amazon’s Prime subscription to Apple, but the change might be enough to bring him back to the table.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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