Apple takes 15% cut on Apple TV video sign-ups

Apple TV HBO Now

Apple’s customary 30 percent cut on content sold through iTunes has been both a blessing and a curse. A blessing because participators get to enjoy a frictionless payment system without having to host content themselves or cover bandwidth fees.

A curse because some high-profile sstudios wouldn’t bend to Apple’s rules of doing business. But the Cupertino firm may have softened its stance, at least when it comes to the Apple TV, as Re/code revealed Monday that Apple is actually taking a fifteen percent cut for premium Apple TV video networks.

According to writer Peter Kafka, signing up for HBO Now directly on the Apple TV, or any similar paid-for video service that uses iTunes billing, now imposes a fifteen percent fee rather than Apple’s standard thirty percent fee.

“My understanding is that a handful of video services, including Netflix, Hulu Plus and pro-baseball’s MLB.TV, give Apple 15 percent of their monthly fees for any subscriber who signs up on Apple TV,” reads the article.

The fee, of course, isn’t applied to free Apple TV video channels like YouTube or those requiring a paid TV subscription, like ESPN’s WatchESPN.

It’s unclear why Apple cut its fee in half for Apple TV sign-ups, but my hunch tells me it did so in order to lure premium video networks to its platform.

“Apple is also trying to strike HBO Now distribution deals with its existing pay TV distributors, so they can sell the service as an add-on to their existing subscribers,” Kafka wrote. “So far, HBO has brought on Cablevision and is reportedly in talks with Cox and Verizon”.

The move could potentially pave the way for a rumored iTunes television service that would allow the company to package and sell premium television entertainment in bulk to Apple TV customers at a competitive price.

By comparison, pay TV providers usually charge a 50 percent cut for premium networks like HBO. In this regard, the fifteen percent cut on sign-ups made through the Apple TV makes the device more attractive to cable channels like HBO while “putting more pressure on the cable guys to sweeten the deals they already offer”, as Kafka put it.

Interestingly enough, the report also claims that Apple will “roll out a new version of the box this year.”

Source: Re/code