Streaming is set to increase as the world’s largest e-commerce platform is now allowing its Amazon Prime subscribers to make in app purchases for its Apple users. The news follows Apple’s decision to relax a 30% commission it charges for in app purchases made using payment system on its iOS platform.
Only consumers in the US, UK and Germany will be able to make purchases through Amazon’s own payment system.
With no commission, video streaming applications are able to achieve more profit from its Apple customers, and avoid inflating the prices of its services and products on iOS. This will allow competitors of Apple’s own video streaming applications to compete in a more equal marketplace.
Apple’s commission gave it an advantage
Apple typically charges a 30% commission for in-app purchases made on its iOS platforms using Apples own payment system. This has enabled the multinational technology company to maintain an advantage in the music and video streaming markets; profiting from its competitor’s sales.
Extra charges would require companies reliant on in app-purchases to increase their prices. This has allowed Apple to maintain its position as the most competitively priced player in the market. Alternatively, companies that were unwilling to pay the extra charge would have to divert their customers to an external browser to facilitate content sales.
Music streaming could also benefit from zero commission
Apple’s commission tactics have been criticized by many companies. Global music streaming provider, Spotify launched a law suit with the European Commission against Apple in March 2019. The law suit protested in-application purchase fees.
The result of the law-suit has not yet been resolved. However, if the decision is ruled in favour of Spotify, Apple could be forced to stop applying commission charges for music streaming. This will intensify competition from the likes of Amazon Music, Deezer and Soundcloud within the Apple Ecosystem.
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