On Monday, former Apple Senior Vice President of Marketing and current Apple colleague Phil Schiller testified that Apple will cut App Store fees from 30% to 15% for certain companies if they endorse Apple’s TV app.
Schiller testified in a lawsuit by Fortnite manufacturer Epic Games, in which he called on a judge to force Apple to allow Epic to install its own app store on iPhones and to bypass Apple’s 30% App Store fee.
Schiller said that a few years ago the Apple TV division worked on collecting video streams from various apps and integrating them all into one experience for users.
The result was the Apple Video Partner Program, which allows members to earn 85% of their revenue from in-app purchases instead of paying Apple’s typical 30% fee.
“The Apple TV team had a meeting with premium content providers and described the work they would do to integrate this new experience. For example, they had to integrate with our Siri voice assistant so that we could run each show in one of these applications can find app experiences, “said Schiller. “In conversation with these developers, the Apple TV team asked if we could lower the commission to 85/15 not in the second but in the first year,” so that they can amortize the technical costs of supporting Apple functions.
Apple charges developers who are not part of the Video Partner Program 15% of a subscription billed through Apple’s in-app purchases for the second year of a subscription. Schiller said any company could get the 15% cut if they join the program and do the technical work to integrate it into Apple’s TV app. It is not only available to large media companies, said Schiller.
Schiller also said the program allowed attendees to charge users directly without using Apple’s in-app purchase feature.
“Working with a number of these partners, especially the digital cable companies, have already installed film distribution companies as clients. They asked if they could keep these existing relationships,” Schiller said, adding that Amazon is one of the companies in program.
Much of Schiller’s statements on Monday emphasized how much Apple is investing in its developer community to gain a competitive advantage over competing app stores. Schiller said Apple spends about $ 50 million a year running its annual developer conference and building facilities for outside developers at headquarters.
Apple started calling its own witnesses, including Schiller, on Monday, and the trial is expected to take place next Monday. Schiller has not yet been interviewed by Epic Games attorneys.
Apple and its CEO, Tim Cook, have consistently stated that they treat every iPhone developer the same – the same rules for their app store, the same commissions, and the same review process.
Last year, the House Antitrust Subcommittee released an email in which Apple Online Services senior vice president Eddy Cue emailed Jeff Bezos, CEO of Amazon, about the program in 2016.
“Here are the details of what we discussed in Prime Video – Amazon Prime Video app on iOS and Apple TV – 15% Rev share for customers who sign in with the app (uses our payment); no Rev- Share for customers who have already subscribed. ” Cue wrote.
Much was reported about Apple’s Premium Video Partner Program in April 2020 when it was discovered that the Amazon Prime Video app for iPhones and Apple TV boxes is capable of renting to existing Amazon customers directly using their credit card details Billing – a common practice Banned in the Apple App Store, even for Fortnite.
An Apple spokesman said when it was first reported that it was an established program exclusively for “premium subscription video entertainment” providers such as Amazon, Altice and Canal that would include Apple features such as the Apple TV app, AirPlay 2, Siri and Apple’s Universal Search supports wanted to bill their existing customers.
An in-house Apple slide deck released as part of the Epic Games trial earlier this month showed Apple employees reflecting on Netflix’s benefits of “video affiliate programs” in 2018 as the video streamer pondered to stop using Apple in-app purchase software.
A page on Apple’s website states that the Apple Video Partner program began in 2016 and has 130 participants, including Disney +, HBO Max, and the Canadian Broadcasting Corporation.
When the Premium Video Partner program was first reported, Tim Sweeney, CEO of Epic Games, told CNBC in response to the news in a preview of his lawsuit: “Epic Games is a wholehearted supporter of smartphone platforms and their digital businesses, that open up to competition in payment processing. “