NYT, WSJ, WaPo join Epic Games in pushing back on the revenue share demands of the major app stores
The digital news business has joined Epic Games in pushing back on Apple for the revenue-sharing terms it demands for distribution through its App Store.
“The terms of Apple’s unique marketplace greatly impact the ability to continue to invest in high-quality, trusted news and entertainment particularly in competition with other larger firms,” wrote Jason Kint, CEO of Digital Content Next, in a letter sent Thursday to Apple CEO Tim Cook.
Digital Content Next is a trade organization representing the New York Times, Washington Post and the Wall Street Journal and other news publishers. (The Wall Street Journal originally reported on the letter.)
Kint’s letter comes a week after Epic Games, publisher of the popular online video game Fortnite, sued both Apple and Google over an industry-wide practice in which the app stores of the tech giants collect 30% of first-year subscription fees when apps for paid services are downloaded through their digital stores. (The rev share rate drops to 15% after year one.)
For Digital Content Next, one of the major points of consternation is that not everyone pays 30%.
In his letter to Cook, Kint cited an email sent from Apple services chief Eddie Cue to Amazon CEO Jeff Bezos, outlining a 15% revenue split for Amazon Prime Video subscribers when they download the Prime Video app through Apple’s App Store. (Bezos also owns the Washington Post.)
“I ask that you clearly define the conditions that Amazon satisfied for its arrangement so that DCN’s member companies meeting those conditions can be offered the same agreement,” Kint wrote.
Apple hasn’t publicly responded to DCN’s letter. Apple did respond last week, when it pulled Epic Games’ app from its digital following the game maker’s bold, strategic move to direct its users to its own site to purchase in-store game currency, instead of buying it through Apple. That was the move that kicked off this whole app-store revolt.
“Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services,” Apple said in an Aug. 14 statement.
Whether this pushback continues to grow, or is quashed by Apple and Google, has significant implications for the video streaming industry, most of which is subject to the same 30% revenue share dogma that dates back to the early days of video gaming, when Japanese console manufacturers charged game makers for the rights to have game cartridges supported by their platforms.
Epic Games, which generates a reported $1 billion in annual revenue from selling in-game extras, has called the app store fees a “tax.”
Notably, Netflix already started pushing back several years ago, when it disabled new users from signing up for its SVOD services through apps it downloaded from Apple’s App Store, instead directing them to its own website.