Apple only takes 15% cut on HBO Now, Netflix, and Hulu subscriptions

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HBO Now on the big screen. Photo: Rob LeFebvre/Cult of Mac
HBO Now. Photo: HBO

Apple scored a huge win for Apple TV by making it the only platform your can watch HBO Now on for the next three months, and according to a new report, Apple might be rewarding HBO by taking a much lower cut on subscription fees than cable companies.

Apple has been taking a 30 percent cut anytime a company signs up a customer for a service through an iOS app. Publishers bristled at Apple’s policy when it was introduced in 2011, however, when it comes to subscriptions purchased through Apple TV, Apple has decided to reduced its take by 50%.

Financial details for Apple’s deal with HBO haven’t been publicly revealed, but a report from Recode’s Peter Kafka claims most content providers only give Apple 15% of each new signup.

“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 percent of their monthly fees for any subscriber who signs up on Apple TV.”

Even if Apple is charging the full 30% is still a huge discount over what publishers are paying the cable companies, which charge companies like HBO and Starz 50 percent of each new sign up.

Until now, the way customers sign up for a new service hasn’t been a big deal to video distributors. Executives that Recode spoke too say that Apple TV sign-ups have been an ‘insignificant source of new customers.” That could soon change though with the Apple TV’s new price drop and a new model expected to be announced soon.

 

Source: Recode