Apple will begin taking a smaller cut of application revenue from some developers on its App Store, according to a report Friday from the Financial Times.
Since the App Store opened in 2008, one of the costs of being an iOS developer has been handing over to Apple 30 percent of an app’s revenue. But the company is now working with media companies including Spotify, Netflix and Time Inc. to give them a larger cut of the sales from their apps, the FT said, citing unnamed sources.
It’s unclear what the new revenue split will be, or which companies will be eligible for it, but it marks a departure from the plan Steve Jobs announced when the store first launched.
The move could make sense for Apple, which is facing stiff competition from Android. It would also be good for developers, giving them an added incentive to develop (or continue developing) for Apple’s platform.
Apple has reported that it paid out more than $10 billion to developers last year, which means it made more than $4 billion just from operating the App Store. That’s a lot of money, but it’s still a single digit percentage of Apple’s overall annual revenue. Apple could easily afford to take a smaller cut of sales in order to promote development.
Some developers have been clamoring for changes from Apple when it comes to the revenue split, like AnyList co-founder and former Apple software developer Jeff Hunter. He wrote an open letter to Apple CEO Tim Cook suggesting that the company could change to a tiered system that scaled up Apple’s cut of an app’s sales as it makes more money.
This wouldn’t be the first time that the company gave some firms a better deal on splitting revenue. Re/code reported earlier this year that Apple takes only a 15 percent cut from subscriptions sold through its Apple TV set-top box.
Apple executives may even announce the changes during WWDC next week, since many of the company’s developers will be packed into a hall at San Francisco’s Moscone West convention center or watching a live video stream of the proceedings.