Apple executives have discussed not having to ‘leave money on the table’ when fixing Apple TV subscription fees

In the ongoing court battle over Apple and Epic over App Store fees, Apple’s insistence on saving 30 percent was a cornerstone of the store window.

But recently revealed emails from Apple from the case show that the App Store has ruled that Apple has been carefully negotiated over time as essential to the fairness of the app economy so that Apple does not leave money on the table. ”

The emails date from a 2011 discussion, led by Eddy Cue of Apple Software and Services, about how Apple would handle subscriber video applications on the Apple TV – an important conversation given the increase in streaming popularity services. And while the discussion does not provide much insight into Apple’s current 30 percent fee for the App Store, it does appear how flexible these rules were when it comes to maximum profit.

The company explored a variety of options, including a one-time discount of 40 percent, a one-time discount of 30 percent, a running fee of 30 percent or more individualized transactions with services such as the NBA and MLB.

One email in the thread sets out the different forms of content partners that offer subscriptions on Apple TV. It determines which partnerships would be fruitful to try to get a cut (such as new streaming services) and which would not (such as ‘hedged’ cable and satellite companies).

Apple’s team has decided that any iTunes-based transaction or subscription should stay with the same 30 percent saving as the App Store. But there are more discussions about how the company will handle referrals, where the Apple TV applications link to the website of a service so that customers can subscribe directly to the service.

The thread then discusses how fees should work when Apple refers a new subscriber. Should the company insist on 30 percent of the initial subscription? 30 percent of the first year? Just want to insist that all subscriber applications funnel subscribers through the App Store? Worry that Hulu Plus cannot afford such costs. Cue replies that Apple should charge 40 percent of the first year, but that it might have to work out a few deals first.

A concern for Apple was to structure the new fees so that it did not undermine the payment structure it set in the App Store. ‘I do not want to do any transactions where we get less than 30%. That’s what it’s in the app store, and we can ‘t make another case here. “If that’s not possible, then I want a one-time mercy, but we have to be very careful here so it does not spread to the app store, ” a manager wrote. (The emails are so fixed that it’s hard to tell who’s answering whom.)

It’s important to remember that Apple TV did not actually have an App Store in 2011 – only individual apps with which Apple worked out partnerships on a case by case basis. And the thread seems to emphasize the ad hoc nature of platform development here: it seems like Apple is not coming up with defined ideas on what it takes to make the platform successful, just a vague goal of maximizing profits and to form the rules. for the platform to achieve it best.