Media and entertainment content providers of all types are looking to break down legacy business deals deemed to have a stranglehold on their business.
Apple and Google have dropped the Epic Games, the maker of the big video-game platform Fortnite and other games, which started a direct payment service -- effectively cutting Apple and Google app stores out of the loop.
In turn, Epic immediately sued Apple under anti-competitive concerns.
Just another video-game attack -- or a major video-game producer flexing its muscles, in a move other game producers could follow?
What’s the downside? Maybe not much yet. One CNBC analyst says Epic Games only get a small percentage of its monetization via these mobile app stores.
Though Fortnite is free, Epic makes revenue hay by selling digital accessories -- swords, uniforms and other accoutrements -- to its users. There is also digital currency to consider.
For many, this is just another in a series of entertainment/content owners direct-to-consumer moves to break away from traditional distribution.
Think about NBCUniversal’s Peacock and WarnerMedia’s HBO Max, which want to avoid unfavorable ad-revenue share deals with the two biggest TV/video set-top box/video platforms: Roku and Amazon Fire TV.
Epic Games, and many other game makers, have been particularly miffed at the 30% subscription revenue Apple’s iOS app store pulls in from fees by its app developers. Google’s android-based app store has a similar cut.
Video-game makers are feeling good. Due to COVID-19 issues, as well as general industry gains, video-game sale revenues totaled $3.6 billion in July. Year-to-date spending reached $26 billion — 21% higher than the same period in 2019, according to the NPD Group.
Likewise, TV network groups feel embolden to go their own way, given the heighten interest in D2C premium streaming video platforms.
Though not as big as Apple and Google, NBCU, WarnerMedia and others don’t want Roku and Amazon Fire TV -- as video app suppliers -- to be the basis of creating a new layer of distribution.
Epic Games wants similar control. App stores on Apple and Google, respectively, have shared that sentiment for some time. Additionally, according to many, they provide safe environments for business and consumers alike.
All of which begs a deeper, not-so-obvious industry explanation: Define what ‘direct-to-consumer’ really means these days.