When Apple runs the hub, who pays?

“Apple likes to sell content — other companies’ content. Through its iOS platform, tvOS platform, TV app, and other mediums, Apple invites its many loyal users to sign up for third-party services or consume third-party content,” Stephen Lovely writes for The Motley Fool. “And when consumers choose to sign up for subscriptions through Apple’s portals, Apple takes a cut of the cash. People call this the ‘Apple tax.'”

MacDailyNews Take: Some people call it that; the foolish, the ignorant, and those afflicted with incurable ADS.

“Apple’s role as a hub means different things for different types of companies, and the crucial factor in the dynamic is the size and power of the streaming service in question,” Lovely writes. “”

“Subscription and streaming hubs like the ones Apple maintains have the most to offer to smaller streaming services. A service like Netflix can afford to ditch the ‘Apple tax’ and demand that consumers pay directly, but smaller services suffer when signups are not as convenient as possible,” Lovely writes. “Small companies aren’t necessarily pleased to be giving some of their subscription earnings to Apple or Amazon, but they get a lot more in return than established companies do, because they need the exposure. There’s reason to think that the subscription hub is the future of streaming, and that such a future would foster diversity in small, niche services.”

Read more in the full article here.

MacDailyNews Take: Stephen finally gets around to the point: Apple built this ecosystem. There were astronomical costs and risk involved with creating, growing, and maintaining all of these products, services, and infrastructure. Apple deserves to charge fees that the market will support. If they charge too much, they will lose business and adjust said fees accordingly. Those who can sign up subscribers outside of the App Store, for example, like Amazon and Netflix, are not prohibited by Apple from doing so.

4 Comments

  1. As Apple’s streaming model approaches Amazon’s in how you can subscribe to 3rd party video providers (e.g. HBO, Showtime, etc.) there will come a time where pricing/value will be where they will both compete. At the moment Amazon Video can be acquired as part of Amazon Prime ($119/annual or $12.99/month) with many other benefits. Or can be subscribed to separately at $8.99/month. Since Apple intends the service for now to be limited to video streaming, $8.99/month will most likely be the initial comparison price.

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