New Apple App Store revenue-share model could result in an Amazon Video app on the Apple TV


Phil Schiller, Apple’s senior vice president of worldwide marketing, has revealed changes coming to the Apple App Store that directly impact the likely reasons why Amazon Video is not available on the Apple TV. The specific change is a reduction in Apple’s cut of an app’s subscription revenue from 30% to 15%, after a customer has been subscribed to a service for over one year. Amazon hasn’t specifically said that the current 30% “Apple Tax” is the reason they haven’t released an Amazon Video app on the Apple TV, but it is widely speculated to be their main concern with the platform. Jeff Bezos, CEO of Amazon, did say last week that “we want it to be on the device with acceptable business terms,” when asked about Amazon Video on the Apple TV.

Under the new Apple App Store policy, Amazon would now keep 85% of most Prime membership fees from customers who signed up through an Amazon Video app on Apple devices. While Apple would still pocket 30% the first year and 15% each subsequent years, the new terms are a step in the right direction for Amazon, which might make them reconsider releasing an Amazon Video app for the Apple TV.

Some popular services already pay less than 30% of their in-app purchases to Apple. Netflix, for example, already pays only 15% of the subscription fee to Apple for customers who sign up through the Apple TV. Now that 15% is the new standard cut for all apps, once a customer has subscribed for over a year, it may mean that large services like Netflix and Amazon will be able to negotiate a revenue-share rate that’s even less than 15%.

Even if Amazon were able to negotiate an acceptable revenue-share percentage with Apple for Prime subscriptions through Apple devices, there’s still the question of individual video rentals and purchases. Since the new Apple App Store policy changes only effect subscriptions, all other in-app purchases through a theoretical full fledged Amazon Video app would still be subject to a 30% cut from Apple.

Amazon spent $1.3 billion in 2014 and $3 billion in 2015 acquiring content for Amazon Video. With all the movies Amazon has been acquiring this year, that figure is bound to increase once again by the time 2016 is over. Jeff Bezos said he can see Amazon Studios becoming the fourth pillar in Amazon’s business, joining retail, AWS, and Prime. With more and more of Amazon’s resources being put into Prime Video, it’s becoming a dominant force in streaming media, that is, if it isn’t one already.

There’s no way to know what “acceptable business terms” are necessary for Amazon to release a video app on the Apple TV, but it’s clear they hold Prime Video in high regard. Apple has changed their in-app purchase policy to be more favorable to subscription services., but only time will tell if it’s enough to entice Amazon Video onto the Apple TV.

  1. Joe D says:

    Amazon shouldn’t give Apple 1 cent. Having Amazon Video is a selling point for the Apple TV, Apple should be happy to have it.

    • pmcd says:

      It’s the other way around. Having Amazon video on iOS and tvOS is a big selling point for Amazon. Hardware is a really small part of Amazon’s media strategy.

  2. tech3475 says:

    I don’t understand why the cut would be an issue, surely they could just make it so that you have to buy/subscribe on a desktop and then you just login to the Amazon Video app like on the iphone/ipad/Xbone/etc?

    If anything it just sounds like Amazon trying to use their position to try and coerce Apple to change their policy.

    • Wakey says:

      It’s not about the Prime streaming part though, it’s about the part of the digital business that actually makes money and that’s sales and rentals. If you look at Netflix for example they spend $1 on content for every $1 they make and without borrowing billions a year they would be losing billions. So Prime streaming is certainly not making Amazon money, it’s a loss leader because it helps sell other products that make money.

      Digital rentals and Purchases are another matter, they dont pay for this content, they just split the sale price with the content owner getting 70% and Amazon 30% and here lies the problem. Apple require 30% of the sale price for in app purchases which would mean Amazon would make nothing. As they don’t need to use Apples payment processing giving them 30% is excessive, even 15% is.

      And sure they could release a crippled app but with no browser on the AppleTV it makes it hard for people to buy the content outside the app unlike on say an iPad. And if they went the crippled route it losses them their negotiating power not just on fee being charged but also on the two tier system that the AppleTV is. Amazon are free to launch an app but they can’t use all the features as a number of them are part of an invite only API. Amazon made a fairly big deal when launching the FireTV about how their platforms features were available to anyone who wanted to use them, many apps aren’t taking Amazon up on that by implementing things like voice search but the API is open for them to do so. On this front giving in and doing a crippled app isn’t just undermining their position with Apple but even worse with Google who by extension of locking Android branches out of using the play services which without prevents devices accessing casting and effectively forces Amazon to not support Chromecast

  3. Jerry says:

    Not going to happen. And Apple TVs and Chromecasts will never return to Amazon. It isn’t about the percentage that Apple takes from the subscriptions. They want to have a closed ecosystem like Apple that locks them into paying for Prime. The problem with this is that, unlike Apple, Amazon sucks at hardware.

    • Masterblaster says:

      Does Netflix / HBO pay to have their app on the AppleTV or required to pay a 30% fee for subscriptions?
      It all seems like a form of extortion.
      Everyone pays but the customer seems to be holding the shortest stick.
      By the way not all Amazon products don’t suck.
      They just don’t over charge the customer like Apple does. That is why there is a lot of passionate people who love the fireTV.

    • Joe D says:

      Sucks at hardware? The 3 Fire TVs, Echo, Tablets, and 3 e-readers I have would beg to differ.

  4. Vulcan195 says:

    IMHO, FireTV-2 is a remarkable piece of hardware that holds its own against the AppleTV-4.

    But it falls way behind when it comes to GUI design.

    Apple figured out long ago that dancing lights and nifty graphics do nothing to truly improve the fundamental user experience … so that’s where they focus their attention.

    Meanwhile, Amazon has tasked their developers to focus their energy on blocking apps like Firestarter, instead of … say … enabling voice search within apps like Youtube and HBOGo. Tragic!

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