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YouTube TV is dropping support for Apple in-app billing and that’s a good thing. It might not be in the short term for those affected, but it will be over the long-term, and for all subscribers, Apple or otherwise.
The news of the change came earlier in the week when an email being sent out to affected customers was published by MacRumors. The email explained YouTube subscribers who pay for their subscription through Apple in-app purchases won’t be able to do so after March 13, 2020. As a result, subscriptions made through Apple’s in-app purchases will automatically be canceled after this date.
From the user perspective, this is obviously not ideal as they will have to make changes to ensure they retain access to the live TV service. In addition, many might prefer to use Apple’s billing system as a means to keep the number of services they share financial and personal information with to a minimum.
However, over the long-term, those same consumers will save money which is one of the primary benefits of cord cutting. Secondly, it is better that YouTube TV tries to cut costs where it can, rather than increase prices to offset those costs.
Apple’s in-app subscriptions too costly for YouTube TV
Most live TV streaming services run on a thin profit margin. In fact, a 2018 report from The Information suggested that YouTube TV was running at a $8 loss per subscriber. While the service has encountered a price increase since then, it has also likely seen its costs going up as well. Regardless of how much it is now making or losing, cutting down on costs is a better solution than charging customers more.
YouTube TV typically costs $49.99 per month without any premium networks added to the equation. That appears to be about the average for base live TV streaming packages, making YouTube TV a competitively-priced option. However, those subscribing through Apple’s billing service are charged $54.99 per month. That extra $5 is likely a result of Apple taking a cut of the subscription fee.
Essentially, if Apple is getting people to sign up and use a third-party service then it wants a cut of the money. There’s nothing wrong with that, nor is Apple the only company doing it. In fact, even YouTube seems to be on the verge of also offering third-party subscriptions and likely to also benefit from an affiliate cut of the referrals.
However, those $5 per month add up and over the cost of a year, those same YouTube subscribers will be saving $60. That’s enough to pay for an entire month of the service (with change) or could be used to offset against the cost of another subscription. For example, the ad-supported version of Hulu costs $5.99 per month which comes to $71.88 over the course of the year. Alternatively, Disney+ costs $6.99 per month or $69.99 when paid annually. Offsetting the $60 saved by not paying a premium just for subscribing via Apple’s in-app purchases can bring the cost of Hulu, Disney+, or any other subscription service down dramatically.
Another point is that it is better the market has stable prices than customers being charged different amounts, depending on their device or billing choice. Encouraging a varying model could lead to massive differences in pricing down the road and no one benefits from that. YouTube TV clearly already has an issue with this model as it stopped the option to subscribe through iOS devices back in 2019. Not to mention, subscriptions made through Apple’s platform were not eligible for a free-trial and considering that’s the best way for consumers to see if a service is right for them, payers through Apple were missing out on a powerful consumer tool.
Apple subscribers losing billing option, not YouTube TV support
An important point to note about the latest news is that it is only the payment option that’s disappearing. Any YouTube TV customers who subscribe through Apple and access via an iOS device (including Apple TV) will still be able to access the service in the same way.
For example, the Apple TV app is not going away and therefore there won’t be any change to the actual experience – outside of how the service is paid for. That’s an important distinction and one Apple device users need to be aware of.
Again, while this is not an ideal situation, over the long-term it should lead to savings and it is certainly a better solution for all YouTube TV subscribers than another price rise to account for the cost.