Far-reaching approaches and policies tend to be noticed much more when they affect a league as popular as the NFL. The most recent case involves Apple’s long-disputed revenue cut of up to 30 percent on payments for in-app purchases, which is now affecting NFL Sunday Ticket and causing controversy. However, the higher price does not seem to be something a user actually has to pay, as there appear to be options to get the original price directly from YouTube/Google and still access the content on Apple devices.
There’s a long, notable history here. This Apple practice led to the Epic Games lawsuit (which was largely decided in Apple’s favor, but forced the company to allow alternative payment systems; though they can still take up to 27 percent there.) And that means developers often charge higher prices for iOS in-app purchases than elsewhere to make up for that lost revenue. (It should be noted that Google also often takes a 30 percent cut on Android in-app purchases, but since this is their own company, they don’t do that here.)
The Apple Store’s surcharge effect has now materialized with NFL Sunday Ticket on YouTube and YouTube TV. As John Ourand noted in his newsletter The Varsity at Puck Monday, the NFL Sunday Ticket product is now available through the YouTube app on Apple iPhone or iPad products, but costs $679.99 annually without NFL RedZone, or $719.99 annually with NFL RedZone. That’s a huge jump from the current regular prices of $379.99 and $419.99 for those packages with a YTTV subscription (there are currently some further discounts for those who don’t already subscribe to YTTV), or $479.99 and $519.99 without a YTTV subscription. (It should be noted that there is no separate NFL Sunday Ticket app in the Apple Store; this is about in-app purchases through the YouTube app or YouTube TV app.)
Those latter prices, plus a 30 percent fee to offset Apple’s 30 percent share, would get you to the prices Ourand quotes for the YouTube app on Apple (which would be the same as buying it without a YTTV subscription). It’s not clear whether prices on the YouTube TV app on Apple devices are similarly marked up, but it seems logical. And when Ourand reached out to the NFL for comment, the NFL responded by saying, “The NFL does not control the pricing of Sunday Ticket and does not set or receive any additional fees in connection with its sale,” bolstering the case that the prices here are Apple’s 30 percent cut of revenue from in-app purchases.
However, no one should have to purchase NFL Sunday Ticket (in any form) exclusively through Apple. These extra charges actually pay off for Apple when users make in-app purchases for specific apps that are tied to their Apple devices.
This was a big deal at Epic’s Fortnite Title. AAnd Epic’s attempts to prevent this by sending in-app users to their own web store resulted in Apple pulling the app and the aforementioned maze of legal disputes. It is noteworthy that Fortnite However, V-Bucks are also available through Epic’s web store, usually at a 20 percent discount compared to in-app purchases through Apple or Google. And the cross-platform nature of the Fortnite Title means that these purchases also apply to games played on Apple or Google devices.
And that’s exactly the case with YouTube and YouTube TV. These apps on Apple devices are a way to watch these products on those devices. But the products themselves get their list of authorized content from a user’s central YouTube or YouTube TV account, which can be managed (even with add-on subscriptions) on Google’s website. There’s no need to buy these add-on subscriptions through Apple rather than Google. And it should also be noted that there are many other promotions, both from Google and others, that can further reduce the cost of Sunday Ticket, and that subscribing to Sunday Ticket under one of these promotions would also make this content viewable on Apple devices.
So why are there these much higher prices? Well, it probably seems to be about Apple Store consistency. Despite the criticism this revenue cut model has received, it works very well for Apple on in-app purchases of games designed specifically for Apple devices, for which there is no external workaround. It even works well for some things like Fortnite; the higher price can be annoying, but $10 instead of $8 can be worth it for the convenience factor of not having to leave the app. And sometimes that even works quite well for developers, since integrating with the Apple Store (even at a higher price) potentially leads to higher revenue for them than alternative approaches. But the revenue cut for Apple is a much bigger deal at a $200 price difference than at a $2.
Therefore, neither YouTube’s parent company Google (which gets the actual revenue from the user here) nor Apple (which gets its share) expect to make much revenue from this approach. But there is a logic behind this offer; so Apple can say, “Look, we’re consistently maintaining this position even when it comes to Google and the NFL,” and Google can say, “No, we’re not going to give Apple 30 percent of the revenue we would otherwise get, we’re going to raise the price to cover that.” And maybe some people who don’t know that there is actually a cheaper product elsewhere will buy it at that price (although that would certainly be unfortunate for them).
In reality, though, everyone is acting at least somewhat in line with their own interests here. Yes, the NFL doesn’t theoretically control Sunday Ticket pricing to consumers; they’re selling the rights to a company that can then decide what price to charge (testimony in the recent Sunday Ticket trial suggested they rejected a $70 per user offer from ESPN and other potential cheaper offers, including one from Apple, but it wasn’t clearly established that the end-user price was the issue), so this isn’t really their problem. Yes, Google could impose a consistent price on Apple with its own website/app pricing for Sunday Ticket, but then they’d be giving up 30 percent of that to Apple.
And yes, Apple could make an exception to the general cut of in-app revenue on the App Store in this case, and probably make money doing so. If they took a 10 percent cut instead of 30 percent, for example, Google would only have to increase the $480 package by $48, and more people would likely opt for it out of sheer convenience than the current $200 price jump. And as long as at least 4.2 times as many people bought it that way as they did with the $200 price jump, that would be revenue positive for Apple on this particular product.
But that would weaken Apple’s approach of taking a cut of App Store revenue overall. And it would lead to other companies demanding exceptions. So it probably works out well if their policies result in Google offering a product that seemingly makes no sense for anyone to buy here. And the whole thing ends in a lot of debate over something that really shouldn’t affect anyone except people who don’t research the actual price of this service on Google and just buy it in-app through third-party Apple (whose only contribution to the service is “enabling YouTube and YouTube TV to have an app on their products”). That’s unfortunate, but price comparisons are often worth it in general, and in this case, it really is.
