Google, Apple Battle Could Have Sirius Implications

Apple recently announced their intentions to charge subscription services 30% of the revenue derived from subscribers who sign up for a service through iTunes. In response, Google made an announcement that their fee for One Pass would be only 10%. With either situation subscription services with apps may find themselves having to shell out money that they had not previously anticipated.

According to a blog by Spencer Osborne at siriusbuzz.com, companies impacted would include Sirius XM, Netflix, Pandora, Slacker, or any service that charges a subscription for their service and sells that subscription through Apples iTunes or Google’s One Pass.

At stake is a difficult decision. For example, if Sirius XM wants exposure through iTunes, they will need to pony up 30% of any revenue derived by someone signing up for the satellite radio service through iTunes. The terms of service for Apple do not allow for different pricing. This means that Sirius XM must charge the same for their service whether the consumer buys it through Apple or Sirius XM’s own site.

The issue is being looked at closely by American as well as European regulators. The question subscription services need to ask themselves is whether or not a presence iTunes or One Pass delivers enough exposure to make the fees worth while. Potentially we could see companies like Sirius XM, Pandora, and Slacker having to spend dollars on marketing to get consumers to their own site.

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