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12/22/2024 05:53:43 pm

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Apple Trying to Entice Cable Channels with Half Subscription Tax

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(Photo : Reuters) Apple is offering 15 percent subscription tax for internet services on Apple TV.

Apple is trying to entice internet TV services to launch on Apple TV through a 15 percent subscription tax, 50 percent lower than the traditional 30 percent App Store model that's been in place since 2011 for subscription-based services.

Services like Netflix, Hulu Plus and HBO Now are all receiving this treatment, showing Apple is willing to drop the subscription price for high profile partners working on Apple TV.

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The goal is to try and make Apple TV more enticing for traditional cable channels or internet TV services. The current model on cable is a 50/50 share between the cable service and the channels, quite a hefty deal to make for a programming network.

This new 15 percent model sounds excellent in retrospect and considering Apple wants channels to host their own streams on top of Apple's own internet TV service -- which is set to launch in June this year -- it might be a ploy to get all channels paying some type of fee.

We still don't know how Apple's internet TV service will work but if it goes full al-a-carte, it could be huge for Apple's potential revenue. Al-a-carte would mean a programming network like Disney might provide a bundle of eight channels available for $20 per month while another service like HBO will be available for $15 per month.

This system hasn't been explored by any programming service so far but if anyone would be willing to change the entire TV industry, it would be Apple.

There's a rumor Apple will offer a basic bundle for $30 to $40 per month coming with channels like ESPN and AMC. It lost a partnership with NBC Universal, owners of USA Network and other high profile channels, when it decided to not work with Comcast on the TV service.

Apple will launch the internet TV service at WWDC 2015 alongside the relaunch of Beats Music. This is the most action packed WWDC when it comes to services, with Apple taking on two big giants in Netflix and Spotify this year.

We've never really been as excited for Apple's services as we are for hardware, but this year may be different. Apple is in talks with dozens of artists for Beats Music and dozens more for its internet TV service, and might be willing to sink a few billion to get these services on the road.

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