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Hulu Makes Peace With Apple's 30 Percent Cut, Enable's In-App Billing In Latest iPhone Update

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  1. CatfishRivers

    CatfishRivers Well-Known Member

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    Hulu makes peace with Apple’s 30 percent cut, enables in-app billing in latest iPhone update — Tech News and Analysis (click for full article)

    by Janko Roettgers - Oct. 2, 2014

    SUMMARY: Hulu is giving Apple 30 percent of its Hulu Plus subscription fee for new users that sign up through the just-relaunched iPhone app. The company’s business model may help with this significant bounty.

    -- Hulu’s latest iPhone app update will cost the company dearly — but it may be worth it: Hulu now allows users to sign up for its Hulu Plus subscription service right within the app, which means that Apple takes over the billing relationship for those customers. In return, Apple will get 30 percent, or $2.40, of Hulu’s monthly subscription fee of $8.

    The new Hulu Plus iPhone app lets you sign up for a subscription right then and there.

    Apple first introduced the 30 percent cut back in early 2011 when it added the ability to bill for in-app subscriptions to iOS. Back then, many publishers were outraged not only about the size of the cut Apple was demanding, but also the fact that the new policy didn’t allow them to use their own billing for new iOS customers.

    Protests against the fee have largely died down over the years, with developers just occasionally grumbling over what some call a “tax”; however, the in-app billing fee has also resulted in many services not using iOS apps for new customer acquisition at all, or awkward workarounds that ask users to visit a website to sign up, and then return to the app.

    Netflix for example isn’t allowing new customers to sign up through its iOS apps. Spotify on the other hand makes use of in-app billing, but ends up handing down the extra costs to consumers, charging them up to $13 per month for a subscription that would only cost $10 if they had signed up on the web. Hulu isn’t doing either, but is instead charging new iOS customers the same rate as its other subscribers, effectively subsidizing these new subscriptions, to the tune of $28.80 per iOS subscriber per year.

    To understand why Hulu is doing this, it’s worth considering two things: The importance of mobile for online video and Hulu’s unique business model.

    Read more at: Hulu makes peace with Apple’s 30 percent cut, enables in-app billing in latest iPhone update — Tech News and Analysis
     
    Last edited: Oct 3, 2014

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