Apple will be lowering its 30% “Apple Tax” for app developers

Each time you purchase an app, game, movie, song, or any other kind of digital content on an Apple device, 30% of the money you spent goes to Apple, while the remaining 70% goes to whoever owns the rights to the content you purchased. Pioneered by Steve Jobs more than a decade ago, this 30/70 split has become a standard for many companies, not just Apple, but now it looks like the company will be changing up this ratio in the near future. While exact numbers haven’t been revealed, we do know that the changes will favor the app developers, but will be limited to in-app subscriptions for the time being. 

Apple is planning a departure from the pricing formula that has defined the economics of digital media for a decade in a change that would cut the 30 per cent fee that media companies pay on subscriptions. The iPhone maker is discussing new commercial terms with media companies, people familiar with the matter said, to alter the 70/30 “Apple tax” pioneered by Steve Jobs when its late founder launched the iTunes music store in 2003. The improved terms being discussed with media companies would apply to revamped Apple platforms such as its long-anticipated TV update and forthcoming changes to Newsstand, its gateway to digital newspapers and magazines, rather than to its existing App Store terms, which will remain the same for developers, according to people close to the discussions. Changing Apple’s terms of trade could improve the economics of online content businesses and reassure regulators that the company is not abusing its position as gatekeeper to one of the most lucrative digital marketplaces.