Apple looking to change 70/30 iTunes revenue split for media services

Showtime for iOS devices and Apple TV teaser 001

Apple is planning a departure from the long-standing 70/30 iTunes pricing arrangement it has with digital media companies, reports the Financial Times. According to sources familiar with the matter, Apple is discussing new commercial terms with a number of players in the video, music and news subscription space.

The split, which doles out 70% of app and media sales to content owners/creators and 30% to Apple for hosting and distribution, has been around since the iTunes Store first launched in 2003. Apple hopes the change can improve its relationships with media firms, and reassure regulators that it’s not abusing its power.

For example, Apple is widely believed to be launching a revamped streaming music service next week, at a cost of $9.99 per month. That’s the same as Spotify and Rdio, but because they must currently pay Apple 30% of their in-app subscription fees, they must either settle for less money or price their plans higher.

But this all looks set to change soon, and not just for music services, but also video services such as Netflix and HBO Now, and Newsstand publishers like Time Inc. and the New York Times. Previous reports claim that Apple has already begun testing a more favorable split for premium content on its Apple TV platform.

Today’s news comes on the heels of reports that Apple is still locked in negotiations with US broadcasters over its own subscription TV service. The Financial Times reaffirms speculation that the holdup has forced the company to delay announcements of the new service and Apple TV refresh until after next week’s WWDC.

Source: Financial Times