Apple Collects 15% of Revenue Generated From HBO NOW and Other Apple TV Apps

While the terms of the Apple-HBO partnership behind the launch of the HBO NOW streaming TV service on Apple TV last month have not been disclosed, Re/code reports that some Apple TV content providers, including Netflix, Hulu Plus and MLB.TV, provide Apple with 15% of revenue generated from monthly fees for subscribers that sign up through the set-top box.

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Apple collects 30% of revenue generated from the sale of iPhone, iPad and iPod touch apps, including in-app purchases, so the commission for Apple TV apps is half the amount developers are forced to hand over through the App Store. While the difference does not make a difference for consumers, the lower cut could make Apple TV a more attractive platform for HBO and other cable channels.

"But it’s even more interesting to think about Apple’s tiers of fees as we enter a world where lots of people are going to be selling Web video subscription products via platforms like Apple’s. Whether Apple is charging 15 percent or 30 percent a month, it’s giving distributors a much better deal than the 50 percent that pay TV providers usually charge premium networks like HBO. That makes the platform even more enticing to cable channels that are thinking about stepping outside of the traditional pay TV bundle — and it puts more pressure on the cable guys to sweeten the deals they already offer."

The report adds that HBO is in negotiations to reach HBO NOW distribution deals with its existing pay TV distributors, enabling them to sell the service to their existing subscribers as an add-on. HBO is said to already have a deal in place with Cablevision and is reportedly in talks with Cox and Verizon as well. HBO NOW is exclusive to the Apple TV among streaming boxes for three months, at which point it should expand to other devices and platforms.

Related Roundup: Apple TV
Buyer's Guide: Apple TV (Neutral)

Top Rated Comments

bbeagle Avatar
93 months ago
wow! How the hell they got HBO on board with those margins is shocking.
The article states that cable companies take 50%, not just 15-30%. Apple is giving HBO a big discount to what it is used to

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Since you can subscribe to HBO NOW by the month, I can well imagine many users choosing to subscribe to NOW for 1-2 months only and binge-watch recent exclusive content.

Exactly what people with cable or satellite can do now
Score: 7 Votes (Like | Disagree)
tasset Avatar
93 months ago
Seems like pieces are falling into place now for the AppleTV subscription service. 10-15% makes sense especially if the content providers have to provide the streams (and therefore all the bandwidth) as rumored.
I also have been much more inclined to sign up for HBO, Netflix, and Hulu through Apple due to how easy it is to cancel at will. THAT is great customer service unlike the traditional providers.
Score: 5 Votes (Like | Disagree)
BruiserB Avatar
93 months ago
Just no worth 15 per month. HBO is nuts.

They charge $17.99 a month through DirecTV.
Score: 3 Votes (Like | Disagree)
Gasu E. Avatar
93 months ago
i've yet to successfully search for the answer to this: is HBO NOW a full HBO catalog above and beyond GO? i've seen most HBO shows so i wouldn't get much value there, and the A-Z movie listings on GO are kinda paltry.

Since you can subscribe to HBO NOW by the month, I can well imagine many users choosing to subscribe to NOW for 1-2 months only and binge-watch recent exclusive content.
Score: 3 Votes (Like | Disagree)
Andrei90 Avatar
93 months ago
wow! How the hell they got HBO on board with those margins is shocking.

Seriously? It says right there in the article how Apple got HBO on board: "Whether Apple is charging 15 percent or 30 percent a month, it's giving distributors a much better deal than the 50 percent that pay TV providers usually charge premium networks like HBO"
Score: 2 Votes (Like | Disagree)
iphone5att64 Avatar
93 months ago
Just no worth 15 per month. HBO is nuts.

It's cheaper than $15 if you can use discounted iTunes gift cards.
Score: 2 Votes (Like | Disagree)

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