Apple Execs Discussed Not 'Leaving Money on the Table' When Deciding Apple TV Subscription Fees

Apple executive emails revealed in the Epic Games vs. Apple lawsuit highlight how the company came to its conclusion to take a 30% cut on all App Store transactions in a way that ensured it wasn't "leaving money on the table."

app store blue banner
One email thread from 2011, spotted by The Verge, features Apple services chief Eddy Cue discussing the commission that the company should charge providers for content subscriptions accessed via Apple TV (an ‌App Store‌ on the set-top box didn't exist at the time.) Apple execs considered charging a 40% one-time cut, a 30% one-time cut, a 30% ongoing fee, or individualized deals with different providers.

apple tv deal
Apple's team eventually decided to require the same 30% fees as it does on the iTunes Store and the ‌App Store‌. Another email also discusses how Apple should negotiate referrals, where ‌Apple TV‌ apps link out to a provider's website for customers to subscribe directly to the service.

apple tv deal 1
One executive said they wanted to ensure they protected the 30% fee that had long been enshrined in the ‌App Store‌, but stated they would remain open to other deal structures.

"I don't want to do any deals where we get less than 30%. That is what it is on the app store and we can't be making a different deal here. If that is not possible than I want a one-time bounty but we need to very careful here so this doesn't spillover to the app store," one exec wrote. (The emails are threaded such that it's hard to tell who is replying to whom.)

Overall, the email thread appears to suggest that discussions evolved extemporaneously amongst Apple executives when it came to provider fees during the early development of the ‌Apple TV‌ platform, with maximum profit the main concern.

Amid increasing scrutiny over its ‌App Store‌ practices, Apple in November announced the Small Business Program, which saw ‌‌App Store‌‌ fees slashed to just 15% for developers earning under one million dollars per calendar year. The ‌‌App Store‌‌ commission remains at 30% for developers making over one million dollars per year.

The program has since received praise from many developers, but some larger developers including Epic Games criticized the move, saying it undermines the ‌‌App Store‌‌'s rules. ‌Epic Games‌ is ineligible for the reduced commission since it exceeds the $1 million earnings threshold. Apple said the program will benefit the "vast majority" of ‌App Store‌ developers.

Related Roundup: Apple TV
Buyer's Guide: Apple TV (Don't Buy)

Popular Stories

iPhone SE 4 Thumb 1

iPhone SE 4 With Apple's Own 5G Modem 'Confirmed' to Launch in March

Tuesday November 19, 2024 12:12 pm PST by
Barclays analyst Tom O'Malley and his colleagues recently traveled to Asia to meet with various electronics manufacturers and suppliers. In a research note this week, outlining key takeaways from the trip, the analysts said they have "confirmed" that a fourth-generation iPhone SE with an Apple-designed 5G modem is slated to launch towards the end of the first quarter next year. In line with previo...
airtag purple

AirTag 2 Rumored to Launch Next Year With These New Features

Sunday November 17, 2024 5:18 am PST by
Apple released the AirTag in April 2021, so it is now three over and a half years old. While the AirTag has not received any hardware updates since then, a new version of the item tracking accessory is rumored to be in development. Below, we recap rumors about a second-generation AirTag. Timing Apple is aiming to release a new AirTag in mid-2025, according to Bloomberg's Mark Gurman....
at t turbo indicator iphone 16 pro max v0 8hrh7w5f3w1e1

AT&T Turbo Indicator Showing Up in iPhone Status Bar for Subscribers

Wednesday November 20, 2024 3:42 am PST by
AT&T has begun displaying "Turbo" in the iPhone carrier label for customers subscribed to its premium network prioritization service, according to reports on Reddit. The new indicator seems to have started appearing after users updated to iOS 18.1.1, but that could be just coincidence. Image credit: Reddit user No_Highlight7476 The Turbo feature provides enhanced network performance through ...
Generic iOS 18 Feature Real Mock

Apple Releases iOS 18.1.1 and iPadOS 18.1.1 With Security Fixes

Tuesday November 19, 2024 10:10 am PST by
Apple today released iOS 18.1.1 and iPadOS 18.1.1, minor updates to the iOS 18 and iPadOS 18 operating systems that debuted earlier in September. iOS 18.1.1 and iPadOS 18.1.1 come three weeks after the launch of iOS 18.1. The new software can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update. Apple has also released iOS 17.7.2 for...
Magic Mouse Next to Keyboard

No, Apple CEO Tim Cook Didn't Say He Prefers Logitech's MX Master 3 Over the Magic Mouse

Sunday November 17, 2024 3:03 pm PST by
While the Logitech MX Master 3 is a terrific mouse for the Mac, reports claiming that Apple CEO Tim Cook prefers that mouse over the Magic Mouse are false. The Wall Street Journal last month published an interview with Cook, in which he said he uses every Apple product every day. Soon after, The Verge's Wes Davis attempted to replicate using every Apple product in a single day. During that...
iPhone 17 Slim Feature Single Camera 1 Redux

'iPhone 17 Air' Rumored to Surpass iPhone 6 as Thinnest iPhone Ever

Monday November 18, 2024 1:07 pm PST by
In a research note with Hong Kong-based investment bank Haitong today, obtained by MacRumors, Apple analyst Jeff Pu said he agrees with a recent rumor claiming that the so-called "iPhone 17 Air" will be around 6mm thick. "We agreed with the recent chatter of an 6mm thickness ultra-slim design of the iPhone 17 Slim model," he wrote. If that measurement proves to be accurate, there would be ...
apple card feature2

Apple Card 3% Daily Cash Back Now Available From Two More Apple Partners

Tuesday November 19, 2024 10:36 am PST by
Apple has partnered with select merchants to offer Apple Card users three percent Daily Cash back on their purchases, and two new companies were added to the partner list today. When purchasing goods and services from Booking.com and ChargePoint, Apple Card users will now get more cash back. Booking.com is a site for reserving flights, cars, cruises, and hotels, while ChargePoint sells...
bug security vulnerability issue fix larry

Make Sure to Update: iOS 18.1.1 and macOS Sequoia 15.1.1 Fix Actively Exploited Vulnerabilities

Tuesday November 19, 2024 10:52 am PST by
The iOS 18.1.1, iPadOS 18.1.1, and macOS Sequoia 15.1.1 updates that Apple released today address JavaScriptCore and WebKit vulnerabilities that Apple says have been actively exploited on some devices. With the JavaScriptCore vulnerability, processing maliciously crafted web content could lead to arbitrary code execution. The WebKit vulnerability had the same issue with maliciously crafted...

Top Rated Comments

InGen Avatar
50 months ago
Are there any For-Profit companies that centre their decision making around leaving money on the table?

Breaking news: Companies that survive based on profit discussing making as much profit as possible.
Score: 50 Votes (Like | Disagree)
Dwalls90 Avatar
50 months ago

30% itself is way too high....
You should see the markup on tangible products to wholesalers or wholesalers to retailers.

EDIT: For the sake of clarity, the average markup of a wholesaler or manufacturer to a retailer or wholesaler is 20-40%. Apple is charging 30% by acting as a middleman. If you reject Apple's 30%, I suggest you reject every retailer where you purchase any services or goods from.
Score: 23 Votes (Like | Disagree)
robjulo Avatar
50 months ago
We love our customers!
Score: 22 Votes (Like | Disagree)
casperes1996 Avatar
50 months ago
Forget what the emails actually say. Look at how it's written! That's appalling! It's not properly capitalised! Noteworthy is that "the App Store" isn't even capitalised! And my Mac just automatically capitalised it for me as I wrote it here so there's no excuse for that. And there's even a word missing. "we need to very careful here". "be". Please write full sentences when you're an exec writing emails like this... And "than" is comparative. "Then" is the word you wanted there. God damn
Score: 16 Votes (Like | Disagree)
Kabeyun Avatar
50 months ago
So Apple leadership is figuring out how much to charge for something, and they go with their existing standard fee that’s also in line with the rest of the market. Is there supposed to be some sort of smoking gun here?
Score: 14 Votes (Like | Disagree)
genovelle Avatar
50 months ago

30% itself is way too high....
Who gets to decide that. Funiture and clothing have 300 and 400 percent markups. Jewelry too. Apple is successful because they generally require a 35% profit margin to release anything and to do a few things very well. They strayed from this while Jobs was in exile and nearly went out of business. Most of their competitors from that era no longer exist.

30 percent is actually much lower if you look at their costs. They manage the support, they eat the 3% credit card processing fees, they host the apps in cloud, they provide free marketing and drive the platform via ads and other methods, they maintain the platform, with constant and consistent updates to APIs and security. They protect companies from piracy that plagues other platforms, and keeps them from being run out of business.
Score: 11 Votes (Like | Disagree)