What you need to know
- Emails seem to have revealed a deal struck between Apple and Amazon in 2016.
- It was the foundation of Amazon Prime video coming to the App Store and Apple TV.
- Apple appears to have offered a 15% revenue share for subscriptions, rather than its usual 30.
Emails released as part of a House antitrust probe yesterday have revealed that Apple and Amazon struck a seemingly more favorable deal in order to get Amazon Prime Video on the App Store.
Now we know how Apple convinced Amazon to finally put Prime Video on the App Store in 2017: Apple agreed to only take 15% of revenue from Prime Video subscriptions made on iOS, versus the 30% they were taking from others. https://t.co/vscPLYKFe2 pic.twitter.com/75e46VGiaiNow we know how Apple convinced Amazon to finally put Prime Video on the App Store in 2017: Apple agreed to only take 15% of revenue from Prime Video subscriptions made on iOS, versus the 30% they were taking from others. https://t.co/vscPLYKFe2 pic.twitter.com/75e46VGiai— Mark Gurman (@markgurman) July 29, 2020July 29, 2020
Writing for Bloomberg, Gurman explains:
Eddy Cue, an Apple senior vice president, and Amazon Chief Executive Officer Jeff Bezos negotiated directly on the deal, according to emails released Wednesday as part of a congressional hearing on anticompetitive behavior. The companies agreed to a 15% revenue share for customers who signed up through the app and no revenue share for users who already subscribed via Amazon or elsewhere, the emails showed.
As noted in the email, the deal also includes integration with Siri for content meta-data, and support for "Watch (showname)" Siri requests, as well as integration with Apple's TV app, which are for Amazon's benefit, as well as Apple's.
At first glance, the move seems akin to other deals with streaming providers on Apple Tv, including Netflix and Hulu, however, the 15% revenue share extends in this case to customers who sign up using the Amazon Prime app. Apple's standard model is to take 30% of subscription revenue in the first year, and 15% thereafter.
Earlier this year, Apple relaxed its 30% cut policy for some video apps which sell movies and TV shows on its platform if they meet certain criteria.
Yesterday, Apple CEO Tim Cook answered House antitrust questions about Apple's App Store, in which he repeatedly stated that Apple treats all of its developers the same.
