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Apple and Google Face Growing Revolt Over App Store ‘Tax’

• notafraudster 8y ago
  I think the focus on "30%" is a little mis-statement. You can pretty easily argue that 30% is too high, but clearly they aren't going to pass along the 12-15% or whatever it actually costs them (assuming 5-7% for payment, a few more % for server costs and bandwidth, a few more % for customer support and developer support) -- clearly they're going to value their monopoly audience attention at some non-zero number. So what does that bring us to? 20%? 25%? The real issue isn't the few percentage points the devs would like to claw back, it's with applications that have recurring billing and would prefer not to give a percentage at all. Netflix doesn't want to cut Apple in on subscribers. Neither does Amazon with Kindle. Any percentage based system is going to be unfair to someone: if they take a percentage on upfront purchase cost, Apple/Google will get nothing. If they take a percentage on subsequent revenue or subscription revenue, it'll seem disproportionate on an ongoing basis to the value the companies supply. Making matters worse, it is not especially feasible to come up with a different rate on a case-per-case basis without grossly distorting the market and magnifying existing first-to-market advantages in an undesireable way.
  • iainmerrick 8y ago
    I'm not sure trying to figure out the "correct" percentage to cover Apple's costs really makes sense. All those factors you mention are probably better measured as a flat fee per user rather than a percentage of the sale cost. Free apps cost Apple just as much to host and support as paid apps, so why don't they get charged? The 30% is essentially arbitrary. They're making a healthy profit from the App Store, so 30% must be on the high side. And the amount different apps are paying must vary a huge amount, only loosely correlated with their hosting costs.
• gergles 8y ago
  Maybe this will make Apple reconsider their entire "software development tax" revenue stream. It is abhorrent that I have to pay them $99 a year to run my own apps on my own device. (Yes, I know you can install your own app through XCode. That runs for 7 days. Then must be re-signed. It also can't use tons of features including things like App Groups. Not acceptable.) (Further yes, I know that if you have ever had a paid account, apparently some of the restrictions are relaxed - for example, you apparently get 90 days on your provisioning profiles. This appears to be Noblesse Oblige on the part of Apple and is not a documented policy, so I'm not willing to rely on it.)
• dijit 8y ago
  If steam can charge 30%, why can’t Apple/Google?
  • codefined 8y ago
    > Netflix Inc. and video game makers Epic Games Inc. and Valve Corp. are among companies that have recently tried to bypass the app stores or complained about the cost of the tolls Apple and Google charge. Valve appear to even be complaining about the 30% fee, that is _equivalent_ to their own fee.
  • digi_owl 8y ago
    The underlying Windows platform still allows for external installs. And the other big names, EA and Ubisoft, already operate their own storefronts. Android technically allows for the same, see the existence of f-droid for example, but the experience is less smooth (more dialogs to tap through) than when using Google Play.
  • cjoelrun 8y ago
    You can release an executable that can run on Windows, Linux, or OS X without Steam. You can't release an executable that can run on iOS or Android without going through the App Stores.
    • codefined 8y ago
      I must admit I don't know about Apple, but you can download APKs for Android that are equivalent to an executable.
      • hellzbrinx 8y ago
        I don't know on recent iOS versions, but you could on previous versions with some security workarounds. If only GBA4iOS worked consistently...
    • freedomben 8y ago
      Minor nit: You can on Android (for the latest most obvious example, see Fortnight), tho it does require a little extra work, but you cannot on iOS.
• scarface74 8y ago
  For perspective.... In traditional retail, the publisher only gets 45% as opposed to 70% for the app stores. https://kotaku.com/5479698/what-your-60-really-buys https://kotaku.com/5479698/what-your-60-really-buys
  • mywittyname 8y ago
    This makes sense in retail. The operating costs associated with retail are more than twice that of a pure digital store. Digital stores don't need to worry about theft, inventory, logistics, opportunity costs of floor space, bad returns, etc. I bet Apple's entire online operation cost less to run than all of the Walmarts in New Jersey. Plus, you can do cool things like individualize what's offered to customers in a digital store. While the best Walmart can manage are stores customized a store for the region.
    • scarface74 8y ago
      Justifying price you charge for something based solely on cost, isn't the way that capitalism works. Price is purely a function of supply and demand. If app makers decide that it's not worth the 30% cut that Apple charges to reach the < 20% of phone users that use iOS, they either can increase their price or not sell on Apple platforms. But realistically, the developers who are making the most money are the ones doing in app purchases for coins, loot boxes, etc. It's not exactly costing them anything to "produce" more coins.
      • sonnyblarney 8y ago
        No, justifying price based on cost is usually valid because of real competitive pressures in the world. Very few things deviate too far from underlying costs. Apple is a rare special case that has a lot of market power and brand premium. Retail stores take on massive working capital and inventory costs. Of course their 'cut' is going to be higher, and it will be the same in every other retail chain because of the similar underlying economics. If 'digital app stores' were commoditized, then the 30% would be more like 3% due to the nature of competition.
• ObsoleteNerd 8y ago
  Doesn't Valve take 30% from games on Steam? But they're complaining Apple taking 30% is too much? I also don't really think the Apple/Google fee is that unreasonable. Considering the resources, tools, marketplaces, tutorials, payment processing, all the other All dev stuff they provide in general. Yes if your app goes big, they make a lot of money. But for every big app there's something like 9 that fail completely (it's murky due to how many apps aren't intended to profit in the first place, and are just made to attract customers to a brand). I don't know the numbers though. Maybe they could charge lots less. But just from my single viewpoint, it doesn't "feel" unreasonable.
  • cgriswald 8y ago
    Steam does not sell me a locked down hardware platform preventing me from buying the software directly from the publisher. Nor does Steam force me to buy DLC through Steam, I am free to buy the DLC directly from the publisher. Steam gets a cut of what I buy from Steam and I am not locked into buying from Steam in order to make my PC useful. Apple sells me a locked down hardware platform that requires me to go through them for all software purchases and all data purchases made with that software. > But just from my single viewpoint, it doesn't "feel" unreasonable. It seems unreasonable to me that Apple should get a cut of my Amazon Video purchases. Apple adds no value there; they just get in the way and try to take a cut. I already have a relationship with Amazon and when I download a video from Amazon, it costs Apple nothing. The entire thing where I have to make a purchase through the Amazon website rather than the Amazon or Amazon Video app and then download it with Amazon Video app is just stupid.
    • rlanday 8y ago
      > Apple adds no value there Other than inventing the modern phone, writing the operating system and developer tools, running the store, manufacturing the phones people are consuming Amazon's product on and convincing people to buy them...you can argue about what's "fair," but Apple's certainly adding value.
      • gameswithgo 8y ago
• CharlesW 8y ago
  Is this any different than the same non-story we've been reading since 2011?[1] Don't want to give Apple their cut? Do what Amazon does, and don't sell through the App Store. [1] https://www.businessinsider.com/apple-kindle-2011-2 https://www.businessinsider.com/apple-kindle-2011-2
  • adorable 8y ago
    And so how do you sell iOS apps or in-app content then?
    • scarface74 8y ago
      Amazon does it all of the time. You pay for content by going on Amazon.com and you view the content via an app.
      • enitihas 8y ago
        This may work for Amazon only because their own brand is also directly known to the user, and a lot of users would also be visitors of their website. But for a newcomer trying to sell digital goods via an app, good luck
        • MBCook 8y ago
          They may have some sort of ‘free pass’ due to their size/influence. It’s eqsy to say that Amazon’s content is meant for Kindles too, and just happens to work for the iPhone. But if you have an iOS only app? Good luck arguing your way out of the rule.
          • scarface74 8y ago
            Udemy works the same way. You can buy content either in the app store or outside and it still works.
    • ihuman 8y ago
      Release a free app that requires a user to log in. In order to access the content in the app, the user has to log into a web browser with that account and pay directly via the developer's website. Amazon Kindle and Netflix kind of do this. With Kindle, you have to buy the books with a separate app instead of a website, and Netflix has the option to buy inside the app as well as outside.
• baybal2 8y ago
  Well, see once an app becomes more important than its platform, the platform has reasons to worry. Recent exodus from apple app store over in app purchases began with Tencent strongarming Apple to let them run their own in app payments under a threat of them quitting. It doesn't require one to be a brilliant thinker to ask "if Tencent was allowed to, why can't I?"
  • enitihas 8y ago
    I think this point can't be emphasized enough. I read somewhere that Apple wouldn't want to go back to those days when some applications were more important than their platform, and when they were at the mercy of Adobe or Microsoft to continue providing software for the Mac. If an app becomes bigger than the platform, the platform loses it's strong lock in, and becomes dependent on the application. Like WeChat has become a platform in itself, and in China basically is the de facto platform a phone must support to be usable.
• safar 8y ago
  Then there's the "developer tax" too - Apple squeezes money from the developers too for the "privilege" of even making an app (for public distribution) for the ios platform. And you need to buy a Mac too ...
  • Fnoord 8y ago
    Luckily you can run macOS in VirtualBox, KVM, Qemu, ESXi, etc.
    • enitihas 8y ago
      Legally?
      • Fnoord 8y ago
        On ESXi, yes. On the other ones: supposedly only if the host is a Mac.
    • Daishiman 8y ago
      Not legally.
    • denimnerd 8y ago
      like that’s a good experience
  • giarc 8y ago
    You do get XCode for free though. There's a lot of development behind that software. I don't totally agree with the 30% fee, but someone has to pay for XCode development.
• jakelarkin 8y ago
  If the app is a singular product that only exists on mobile, then fine you bake the Apple/Google tax into your price. for content subscription businesses that are multi-platform its a bit of an absurd situation. You can't really charge 50% more on mobile platforms. Depending on where your user randomly decides to sign up your revenue and lifetime value of that user is suddenly 2/3rds of what it otherwise would be, despite costs being the same.
  • pvg 8y ago
    The cut is 15% so even if you passed it on to your consumers, which nobody does, you wouldn't charge 50% more.
    • opencl 8y ago
      Apple's subscription cut is 15% after the subscription has been active for a year, it's 30% for the first year.
      • pvg 8y ago
        Not for Netflix, who is doing most of the complaining here.
        • MBCook 8y ago
          It should apply to anyone doing subscription billing through the App Store.
• siruncledrew 8y ago
  There's some full-circle irony in Apple and Google complaining about taxes being too high and using ways to avoid them, then they get served with the same tactics by companies in their ecosystems. Without passing judgement, it's just one of those classical examples of "what goes around comes around".
• makecheck 8y ago
  The 30% cut would have been reasonable after all this time if the platforms were doing anything useful with the money. Instead, we got: - Store APIs that to this day are stupidly complex to get right in all cases, making you wonder why it’s so hard - No support for very common, decades-old pricing schemes like “free demo, then buy” (except through convoluted means) - Stagnant app store designs (esp. Mac, for YEARS) - Absolutely terrible search - Stupid same-apps-on-list-every-week “categories” - A strong preference to reward obvious overpriced scams/gambling games, etc. instead of rewarding development of apps that are hard
  • Marsymars 8y ago
    On top of the terrible search, they also show ads. Which, if search was good, would be explicitly worse than actual search results.
    • throwaway34241 8y ago
      This. This is why how Steam operates is 10x better than the mobile app stores. A 30% fee for getting your app in front of the users who might buy it is one thing. Steam isn't perfect, but they've set up their economic model where they are rewarded for doing this, which is good for both developers and users. This involves personal recommendations, maybe third party curation features, search etc. If you have an ad-based model, there's less of a reason improve those other systems, since the store might be able to extract 75% of the value created if you get developers bidding against each other to buy visibility. But it sucks for everyone except the app store owner.
      • TylerE 8y ago
        Steam has been sliding rapidly into hell for years. So much crap/asset flips.
  • kristofferR 8y ago
    The iOS App Store design is pretty awesome actually. It got a total design revamp last year in iOS 11 [1], and it's coming to macOS Mojave in a couple of months, so to claim the design is stagnant is incorrect. It's fluid, and has great use of typography, spacing and colors. I don't see how it is criticize the design of it, the design is the best part. The missing features (like demo versions not being possible) etc and bad policies are the issues, not the design. An annoying thing with the new design is that the Today content only is saved for a week, past articles and selections gets lost (archiving the editorial content would actually be a smart website idea, if you disregard the copyright issues), ideally it should be indefinitely scrollable. Edit: It's frustrating that people don't bother explaining what is wrong with the design of the App Store instead of just downvoting me. [1] https://www.apple.com/ios/app-store/ https://www.apple.com/ios/app-store/
• bangonkeyboard 8y ago
  "App Store fees got you down? Meanwhile at Epic, they lowered their take on the Unreal Marketplace from 30% to 12% and retroactively paid back years of fees. "Epic said this is due to the success of Fortnite. If only Apple and Google had successful products to rely on for income." — https://twitter.com/agilethumbs/status/1029804861477412865 https://twitter.com/agilethumbs/status/1029804861477412865
  • WilliamEdward 8y ago
    I really like that. I think the first thing people should do when making a startup is finding a consistent revenue stream and business model. Most companies are actually more about the model than the idea. Hell, even Nike only makes about 6% of profit on their $100 shoes. They can do this because they have a consistent and reliable business model (aka not advertisement income). It's not even the shoes anymore. it's the idea of the shoes.
    • scarface74 8y ago
      Just to provide a reference on the $6/Nike shoes, because I didn't believe it.... https://solecollector.com/news/2014/12/how-much-it-costs-nike-to-make-a-100-shoe https://solecollector.com/news/2014/12/how-much-it-costs-nik...
      • WilliamEdward 8y ago
        Thank you for that. I believe the source i read included marketing in the expenses, but that was long ago.
    • fjsolwmv 8y ago
      6% profit after paying the salaries of everyone involved in manufacturing, marketing, and administration, including retailer profit, is quite a lot.
      • WilliamEdward 8y ago
        It's just less than people would think because all they get to see is the $100 price tag.
• adrian_mrd 8y ago
  Three thoughts. There is a certain irony at play here, given both Apple and Google's own fights with tax authorities in many jurisdictions (eg the double Irish and the EU, Australian complaints about tax avoidance, agreements about their use of shell companies in the Cayman Islands or other tax havens, etc.). I have always wondered what the real cost is to both Google and Apple in running their App Stores? The 30% figure has been a constant - with a few exceptions like the in-app subscriptions after 1 year on iOS down to 15% - for 10 years now but what are the actual revenue vs cost figures involved in running these [billing] stores? What would be a fairer cut... 10%? 15%? 17.8% in large economies and 22.6% in smaller countries (as semi-random numbers), etc. Currency fluctuations are also important. Apple more so than Google, also seem to make quite some revenue from pegging their prices against the USD and only updating these once or twice a year - and generally only at very favourable forex conversions in Apple's favour. An unintended side effect here is that many non-USA consumers are subsidising USA consumers purchases of both Apple and Google products (because the USD is the benchmark price). Given the reliance on China as the hardware manufacturer, maybe the Yuan would be 'fairer' in many instances? (It won't happen of course due to how Cupertino and Mountain View centric both companies, and by extension, how pro-USA many of their pricing decisions are).
  • bskap 8y ago
    Calculating costs here is tricky. Do you only include the cost for Google running running the Play Store infrastructure itself, or do you also include the costs of developing and running Google Play Services? What about the costs Google has developing Android itself, which is otherwise given away for free?
    • adrian_mrd 8y ago
      Good points. Part of the problem with the debate at this point is that there is little to no transparency about any of those costs. Android is obviously a larger ‘strategic’ play so I would argue that should be excluded and Google Play Services are also likely to either be ‘strategic’ plays (ie Apple offers music, so do we; Customers want movies, let’s offer them too, etc) or potentially revenue positive. If Google’s and Apple’s accountants can setup magical tax systems across the world - they could also provide some useful data points about the true costs of running their App stores. As a specific example, I’d be interested to know, what the hosting and bandwidth costs are for the App Stores (likely heavily subsidised given both Apple and Google run cloud platforms including hosting). At the moment, there is next to no transparency except the “30%” cut and some high-level info in their quarterly financial reports.
• Theodores 8y ago
  'Fortnite' is an allegedly very popular game, the biggest thing since sliced bread. This is going to be distributed without the app being in the app store, not sure if that is just Android, but you get the idea. If the app (or game) is as big as 'Fortnite' then people will just seek it out and get it from source. The app store can be completely bypassed. For everything else then the 30% app store publisher fee is the level playing field you are dealing with. I do wonder if the realities of the 'Fortnite' way of publishing is what is making people question the app store.
  • enitihas 8y ago
    It's just Android though. On iOS you don't really have a choice of distributing outside the App Store, whether you are fortnite or even facebook.
• ectospheno 8y ago
  I neither need nor want every service I use to have my credit card details. They can use the apple store or they can just do without my money. I'm fine either way.
  • shade 8y ago
    Yes, I prefer not having my card details stored across so many different services. Even though I trust Netflix to be competent on security, it's one more place I have to remember to update/manage it every time I get a new card. A friend of mine noted something I'd forgotten while we were discussing this: that cancelling a subscription through the App Store is just a few clicks. Doing it through other channels can be a tremendous pain.
• gameswithgo 8y ago
  I dislike App Stores and not because of fees. I feel they have made the discovery of good software harder, and reduced the average quality and safety of software that is available, the exact opposite of what they claim is the benefit of an app store. Having the single portal where you search for things, leads to immense gaming of the system by bad actors. You search for "Chess game" and the good ones are not to be found. Instead you get 100 ad infested, crap. It is a race to the bottom. Everything ends up "free' with ads or dlc or privacy invasion tactics to make money.
• cm2187 8y ago
  And between PWA and WebAssembly, it is going to be even more difficult in the future to force developers to use the store when they can access most of the functionalities they need without paying a penny or having to bend in front a capricious app review policy.
  • merpnderp 8y ago
    Not when Apple refuses to implement web Push API. Without Push, webapps can't compete.
• ZeljkoS 8y ago
  In my modest opinion, progressive app store fee would make much more sense: https://svedic.org/philosophy/why-app-stores-need-progressive-pricing https://svedic.org/philosophy/why-app-stores-need-progressiv...
  • apersona 8y ago
    That's an interesting idea. It might even encourage developers to work on higher quality apps, or to not devalue their own software.
  • iainmerrick 8y ago
    This is a great idea, exactly what I was trying to get at in my comment elsewhere: https://news.ycombinator.com/item?id=17821945 https://news.ycombinator.com/item?id=17821945
  • binomialxenon 8y ago
    This seems like a pretty good idea. I'd be curious to see how many apps are sold for prices over $20 USD, as my impression was that the vast majority of paid apps were competing at lower price points.
• dangjc 8y ago
  Maybe Apple and Google should be paying app makers instead considering how much more valuable their phones become BECAUSE of apps. If there was perfect competition between more than two OS makers, I'd predict the charge would be closer to 0. Without it, we can only stab into the air to guess what the real clearing price would be.
  • mrep 8y ago
    For IOS, that would make sense but the play store is basically the only way (with the recent EU fine) that google can make money on android.
    • maym86 8y ago
      Android is a platform that allows Google to target advertising and collects user data. The original intent was to make sure mobile users use Google products. They can and do make money from that.
• dawhizkid 8y ago
  Is there a SaaS opportunity here? Helping developers create a frictionless experience redirecting customers to an optimized web view to complete payment and then back to the app in a seamless way?
  • Jyaif 8y ago
    > Is there a SaaS opportunity here? No, because it's (obviously) forbidden.
  • monocularvision 8y ago
    Not on iOS at least. You can’t directly take them to a payment web form. You will see that most apps that bypass App Store payments give some text about how they need to go to a website (which is not clickable) to perform the action. Opening up a browser for them will get you rejected.
• fipple 8y ago
  To me, the worst consequence of the App Store tax is that it aligns the interests of Apple with app developers rather than users (who ultimately provide Apple with much more revenue). Apple promotes things like “Top Grossing” because it makes tons of money off those dumbfuck apps that turn users into broke zombies. If they only got 5%, they’d create an App Store that encouraged and promoted apps that delivered great entertainment at low cost.
• elektor 8y ago
  To avoid the app store tax, companies can look to Audible as an example. On iOS, I can only add books to my wishlist and have to make the purchase on my computer.
  • monocularvision 8y ago
    Or in Mobile Safari.
  • stickydink 8y ago
    And the experience is pretty awful. There's little explanation of what's going on or how to actually make the purchase. There's a flow that works for Kindle without leaving your phone.
• sergiotapia 8y ago
  Despite having literally hundreds of thousands of apps, I can't think of a single app that is really "good" in mobile platforms, either ios and android. Betterment maybe, polished. Brave Browser looks like chrome so that's good. But other than that, it's a race to first to market and they are all mediocre to me. Should the barrier of entry be higher?
• deleted 8y ago
  [deleted]
• arendtio 8y ago
  For everybody who doesn't want to participate in the whole App-Store-Tax economy, I suggest taking a look at Progressive Web Apps which do not need any App Store and work cross-platform. Just be aware that they do not support all APIs, so for some use-cases, they can't compete with the native apps.
• pascalxus 8y ago
  I think it's a legitimate complaint considering how terrible the app store search is. On android, I can never find the app I"m looking for with their search. I always end up using Google search to find the apps I want. And even then, it takes many many searches to find what i want. Consider the following need: "I want a free running app that can track my weekly mileage". Quite a simple request right? Search through all the top apps on Android app store, it took me a long time to find a good one that met my needs and had this feature. And, I'm seeing that the top apps aren't always the best ones.
• forty 8y ago
  I read that Apple recently (June) added this to their rules: "Multiplatform Services: Apps that operate across multiple platforms may allow users to access content, subscriptions, or features they have acquired elsewhere, provided those items are also available as in-app purchases within the app. You must not directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods must not discourage use of in-app purchase." Now you don't even have the choice not to sell your subscription products on iOS...
  • singularity2001 8y ago
    Hopefully that's the last straw for anti-trust agencies to chime in.
• Fifer82 8y ago
  I noticed this the other day, I had seen on my desktop that YouTube was £11.99 per month. When I was out, i had forgotten to sync my songs but I wanted music for the day so I went to try YouTube Premium. £15.99 per month. I could have sworn it was £11.99..... I deleted my YouTube app, and signed up for £11.99. Reinstalled my YouTube app and it was Premium. I am being told to "get the app as it is better" and yet evidence suggests that having the app cost me £48 a year in this situation. That is ridiculous surely?
  • kristofferR 8y ago
    The price increase has nothing to do with if the app is installed or not, just wether you sign up through the app (where Apple takes a cut, usually leading to a price increase) or not. It's the same with most other multi-platform services, never subscribe using iOS apps if signing up through their website is possible.
    • Fifer82 8y ago
      What is the difference? You have the app, and safari opens up all links in the YouTube app. You get rid of the app, and safari opens the youtube website. Getting the App costs you a 33% tax over not having the app in this circumstance.
• cptaj 8y ago
  And they should. We are fast approaching a world where all markets are walled-in by a few international companies. I've had clients of mine go under because Amazon decided to close their accounts and they depend on the platform to sell their wares. Imagine how hard it is to sell stuff online if you're barred from ebay and amazon... and there is no legal recourse to appeal those bans. Same goes for app stores, what happens if google and apple ban you for whatever reason? Your company is screwed and you have no appeal or legal safeguards. I'm scared shitless of "gig economy" platforms. I see a future where one or two platforms rise to the top and all jobs are handled through them. A bad rating can destroy your entire career. The platform will never forget, there will be no second chances. Scary stuff. We as a society need to start thinking about how we rate people. Right now we all shop for that 5-star rating and punish anyone with 4. We need to mature beyond that as it grows increasingly impossible to maintain perfect ratings. Regulation is a very very touchy subject, but if millions of people depend on your platform for their livelihood, you can't pretend to still exert arbitrary power of life and death over them with some $5/hr customer service drone trying to go over your case swiftly to meet a daily quota. We need real due process.
  • worldsayshi 8y ago
    In part I think it's important to think about how to make and keep a healthy culture of labour unions. There needs to be counter balance to corporate power. Especially in blue collar sectors. I guess gig unions could be a thing? Can we build apps for worker coordination? What if there was a way for all Uber drivers to coordinate global strikes? We should be open for regulation that protect the rights of workers to unionize.
    • ThrustVectoring 8y ago
      One of the big problems with forming a gig worker union is the same problem with gig work in general; you're disconnected with your coworkers and other firm participants. Uber can press a button in response to a strike and send out a push notification to potential scabs offering a bribe to cross the digital picket line. The strikers both don't know and can't efficiently tell who scabs are, and as such can't put pressure for solidarity on them.
• lancewiggs 8y ago
  70% of,the retail price is extraordinary in any market for physical goods, where they pass through layers of resellers, distributors and wholesalers, each taking their clip. Meanwhile there is no other cost of goods sold. Yes Apple take a lot, but the deal developers get, simply because of the lack of other parties, is superb. For example, Apple makes it trivial to sell to every country, whereas for physical goods, or even for online goods, it is very difficult and ex-endive to understand pricing, language, tax and other compliance - even if you could get permission to sell there. But yes it is well over-time for the removal of practices that have lowered out trust in the ecosystem - in particular iap systems targeted at whales, and pseudo gambling.
• ballenf 8y ago
  This article ignores that Apple nor Google charge a tax on ad revenue in apps, leading to the perverse outcome we have where there is an inexorable pressure to monetize via ads even in paid apps. I really would really like to see the tax lowered, but expanded to include all advertising revenue, with the idea that the "power to tax is the power to kill". Small apps will rebel forcefully and understandably from this idea, but I don't think it will really harm them in the long run. Unfortunately, the idea is fundamentally flawed and couldn't work with regard to apps that run their own ad network like Facebook, Amazon or maybe Netflix eventually. Those companies probably don't currently track revenue on any basis that would allow allocation in any way suitable for application of such a tax. But if Apple had done this originally, I think we would be in a very different world app-wise. And a better one.
• sonnyblarney 8y ago
  The limitation that Apple imposes whereby people can't really sideload or download elsewhere is even more problematic. The 30% tax is one thing - but grey, inconclusive, inconsistent and possibly nefarious decisions made as to 'what can stay and what cannot' in the AppStore is even worse. It's tantamount to a kind of politico/economic censorship in the name of security.
• sonnyblarney 8y ago
  There needs to be some kind of class-action or power play movement otherwise - like all the top vendors removing their apps at the same time for a while. No one entity is powerful enough to stand up to them alone. It may take some kind of non-market intervention like legislation which is unlikely to happen in America and I'm not sure that's the fairest avenue either. Though it may not seem like it - this is related to 'network neutrality' - it's about monopoly/control of one area that's used to monopolize control an adjacent market. Apple and Google don't want Verizon to charge based on content ... so that Apple and Google can monopolize the entire experience for themselves! Antitrust is not a new idea, and it's foggy but it may come into play here. It'd be one thing for companies to use their OS control to try to dominate other parts of the experience, but a 'bridge too far' to limit choice. Apple literally wants a 30% cut of the entire digital universe on their platform. This requirement and the limitation that people can't install apps 'not approved' by Apple I think should be addressed by legislation.
• ksec 8y ago
  I don't have a problem Apple charging game developers 30%, I have a problem with Apple not caring about the gaming development and has comparatively speaking, almost zero contribution to the gaming communities. From improving drivers, middle wares, to that idiotic Game Center. I don't have a problem with Apple charging Netflix 30% for access, I have a problem with these subscription tax every month that Apple collect and offer absolutely zero value to me as an user. And they then may have use that money to create a show called Planet of the Apps. I don't have a problem with Apple charging Spotify 30% access, I have a problem with Apple Music being complete piece of crap outside possibly English speaking countries, and some Apple Music features are tied to OS not available to Spotify. Basically as a user I could care less about where those money goes, as most users don't. But when they discovered they are paying more while being offered an inferior solution, that pill is hard to swallow. And it makes it so much harder coming from Apple, because they keep bragging about how only Apple could do it, how they care.
  • yayana 8y ago
    As an end user you feel like you don't care only since you can't see that you are always paying more for worse services due to the 30% gardens. It is similar to the hard fought American Express tax. Vendors needing to pay 2% if the customer is using Amex and not being allowed to pass it on to the specific user meant raising their prices 2% (or spending 2% less on content) for all users.
• skunkworker 8y ago
  With Apple shuttering their affiliate program for iOS I hope this means the fee will drop to 15% or even 10%. Otherwise I can't see them dropping that affiliate program unless a change was in the future that could affect it.
  • MBCook 8y ago
    Ha. As an Apple fan, I can’t see them doing that. They wanted the money to make their services revenue look better. I imagine it wasn’t close to 10-15% of purchase on average anyway. And I’m guessing it didn’t apply to IAP, where the real money is.
• l5870uoo9y 8y ago
  Does any of the many app stores in China charge a percentage? Can't find any number on its largest one, MyApp Tencent, which has ~10% of the app market.
• Nasrudith 8y ago
  Really the only reason they can charge their percentage is their critical mass - they have a high degree of customer volume that rolling their own won't match unless they are already big names. It is a bit of an ironic "meet the new boss" with publication considering there isn't a high capital requirement in itself. Technically marketing can help but reputation is far more fundamental - look at bing failing to be a Google rival despite subsidies from Microsoft. It isn't quite like the XBox where throwing money at the problem can establish a big name niche. Tech serms to have a strange habit of winding up in technically easy to enter but hard to compete markets.
• deleted 8y ago
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• john-doherty 8y ago
  It is a heafty price to pay, I could understand 30% in the early days, but the volume they’re dealing with now does make it feel unfair. Surely the solution to this is Progressive Web Apps, WebGL etc? At some point, they’ll distrust themselves
  • binomialxenon 8y ago
    I'd rather see alternate avenues of distribution for mobile applications, but this might not ever happen on iOS.
• MBCook 8y ago
  I think Apple’s fee is more than fair for many developers. Free hosting, they do all sorts of payment compliance/fraud/tax stuff for you. To a small developer I think it’s a huge boon. But once you become BIG (Candy Crush, Fortnight, Netflix, Amazon) that advantage no longer applies. Those companies are all capable of doing all the payment stuff on their own. And when you’re doing Fortnight business that 30% is a TON of money. I seems like Apple should offer a sliding scale based on transaction volume. Starts at 30% and goes down to a bit above credit card fees (say 5% or 7.5%) once you are taking in enough money. There are still big benefits to the App Store handling payment, like centralized billing, already having card information entered, their ‘allowance’ features, etc. That would probably help a lot of the big indie applications too. I suppose they could let you use your own billing system for a flat fee. Say $5-10 million a year. If your volume is high enough it’s worth it you could opt out. They could use that money to ensure quality/compliance. Unfortunately services revenue has been the one bright spot in Apple’s numbers recently. And a big cut there wouldn’t look good. So I don’t expect Apple to do anything out of charity. The only plus is some of these groups are big enough they can push back on Apple and it would do something. Now that Fortnight is on Android, can you imagine the power they’d have over Apple if they said they were leaving the platform over this? Some BIG properties are going to have to shun iOS and get users mad to make a real change. I have a hard time seeing that happen since iOS is just too profitable.
  • Invictus0 8y ago
    > Some BIG properties are going to have to shun iOS and get users mad to make a real change. I have a hard time seeing that happen since iOS is just too profitable. Even this will never happen; consumers are locked into cell contracts and can't just switch phones on the whim of the latest outrage cycle, and companies can't afford to burn $xxM/day to make any kind of impact. Without regulation, iOS will always be a walled garden.
  • taurath 8y ago
    30% is a TON of money regardless. Its the difference between being in business and not if you are a niche product, profit vs loss for a small medium sized company. You're giving up 30% of your revenue. Payments? Stripe fees are like 3-4%. Distribution? Free/non-IAP apps don't pay for this other than some licensing fees. I don't think there is a benefit that IOS/Gplay provide that even approaches being worth a 10% revenue hit, except in extreme cases.
• zepto 8y ago
  The App Store tax is irrelevant compared to the lack of flexibility around things like paid upgrades.
• walterbell 8y ago
  The problem is less the fee than the lack of value being provided to developers and consumers, e.g. improved app discovery, more flexible business models for app monetization. If app stores unbundled their 30% fee into separate fees for services provided to developers, there would be internal competition among services to win developer adoption. Market-based developer feedback would improve the services being offered by app stores. Google/Apple made a feature change and developer revenue from that feature dropped by 25%? Time to revisit the decision. At the moment, developers pay the same fee independently of the quality of the “product” they are purchasing.
• bonestamp2 8y ago
  Don't get me wrong, it is bad... but it also could be worse. Amazon takes 70% of the revenue from my kindle blog subscriptions! I have more subscriptions than some really big publications too. It's nearly criminal, but it's an easy way to monetize a blog so it's better than nothing in a way.
• antonyme 8y ago
  Good grief, what a loaded headline. It's not a "tax" for a start. It's a fee. And what does the fee cover? PCI DSS Credit card processing services, secure web hosting, worldwide CDN-cached downloads, sales and download analytics, listing in the premier app catalog with many millions of users, marketing exposure for popular/successful apps, and more. How much would it cost for developers to do all this themselves? Every single individual developer? People seem to forget what things were like before the App Store. Now one could question the percentage itself, and ask if it is a reasonable number, but when you consider the time and effort and investment that would otherwise be required,
• nickjj 8y ago
  Look at platforms like Udemy (selling online courses). They take 50% of your revenue and not only that, they also control the prices of your course by selling them for $10 year round (of which you'll get $5 for a ~5-10 hour video course that takes 4 months to make and it's also expected you offer 24/7/365 support). Yes I know you can opt out of these things but then you're hidden from search results by default which defeats the entire purpose of using a marketplace. As a content creator I despise marketplaces because you lose control over your business. You don't even get to contact your customers directly since details like emails are hidden from you and you either make or it fail based on their search engine's ranking algorithm. As a content consumer, marketplaces make it pretty easy to find good things, but at the same time I feel like if you have good content, people would find you without a marketplace. I can't wait until these marketplaces eventually bust from content creators just picking up and selling stuff on their own.
• vtange 8y ago
  I'm interested in this issue in the realm of gaming. The way I see it Apple and Google tax mobile games for using Apple and Android phones as gaming consoles. How does Nintendo, Sony, and Microsoft(Xbox) handle revenue share and developer licenses?
• justonepost 8y ago
  Ok, this doesn't make sense. Maybe APPL, but there is no way Google is that dependent on app store fees. "If app store commissions fell to a blended rate of 5 percent to 15 percent, that would knock up to 21 percent off Apple’s earnings, before interest and tax, by fiscal 2020, Macquarie estimated. Google could lose up to 20 percent by the same measure, according to the brokerage firm. The technology giants are expected to earn more than $50 billion each, before interest and tax, in 2020, according to analyst forecast data compiled by Bloomberg.
• majani 8y ago
  Funny how the same developers will cheer for Apple when they post incredible profits every quarter. At such levels of profit, there's always someone in the supply chain getting screwed
• whatever1 8y ago
  Microsoft was crucified for having internet explorer as default browser (not banning other browsers). Apple with 45% market share in the US smartphone market faces no issues with banning app store competition (even html5 based stores) Sounds fair
  • kalleboo 8y ago
    Microsoft had a market share around 95%. Quite a difference there.
• franzwong 8y ago
  I have no idea why I need to pay Apple even I just want to put a App created by myself to my own phone.
• kraig911 8y ago
  Maybe the internet has made the world crappier :(. I mean anti-vaxxers, wall-gardens, tax-frauding, election gaming... the list goes on. Seems like everyday we as dev's suck more and more.
• ulfw 8y ago
  Very few businesses have 50%+ margins so they can afford to waste 30% paying Apple or Google for hosting a few MBs of a file. I can imagine that App Store 'tax' to go down to 15-20% in the near future and stay at that level for the next decade.
• valuearb 8y ago
  I remember when software developers enjoyed free markets to sell their products in. First we’d spend hundreds of thousands of dollars printing manuals and boxes, and duplicating disks. If the release sold well, that would end up costing us less than $10 per unit. If it didn’t sell well, that cost would approach 100% of revenues. Next, we would neec need to find a way to get our boxes of software into actual stores. The easiest way was to convince someone like Ingram MicroD to distribute our software. Once stocked with Ingram, any store could order our product! That doesn’t mean they did though. So the next step is to convince stores to stock us. We could hire and send sales staff, or we could pay Ingram to advertise us prominently in their catalogs, or we could even pay big chains to stock us in prominent locations called “end caps”! Now all we had to do was wait for the money to roll in! And wait was the key phrase, cause even though our contract said 30 day terms, Ingram days were kind of like their version of dog years, or better yet Elon schedules, where everything takes at least twice as long. After 45 days you’d call one Monday, and they’d say oh we don’t cut checks on mondays, only on Fridays. So you call on Friday to find they only cut checks in Wednesdays! Then the next time the darn CFO would be out of town, you can’t get checks signed without the CFO you know. But no worries, Ingram always paid, never in thirty days but usually within 6 months or so. And they did all of that for “only” a 50% cut of our revenues! Developers today don’t know how good they have it. For only 30% of revenues (and a $99 annual dev fee) Apple will give you as many marketing pages as you want in their store, will host your apps, and no matter how big they are or how often you update them, and irregardkess of how many download them, Apple pays for all storage and bandwidth costs. And you not only have access to North American customers, but Apple has international stores localized in dozens of languages you get free access to at the click of a mouse. Do a Spanish version of your app and it’s in dozens of stores for Spanish speaking countries in hours. And on top of that, Apple provides probably the best payment processing system known to man. It’s easy to sell for one time chatgesmp, subscriptions, by feature, etc. and customers are super comfortable with the App Store because it makes managing their subscriptions or canceling unwanted purchases is super easy. And even better, Apple tightly vets every app and every update before releasing, which is a big reason why it’s the biggest selling App Store in the world. Customers feel safe downloading your apps from the Apple App Store, which helps sell more if them. Apple paid developers over $20B the last year. There hasn’t been a software market this lucrative and this easy to get into in the history of the world.
• sundvor 8y ago
  "A recent European Union antitrust ruling requires the company to stop automatically installing its app store on Android phones in Europe. (Google is fighting the charges.)" Wait, are they going after Apple too? Or are they ok because they've locked down their platform 99.999% (assuming there's still some jailbroken ones out there)?
• da_murvel 8y ago
  I'd like to compare the situation to the record industry, where artists usually get something around a measly 10% of the income generated by record sales. Artists are busting their asses of while the record companies are cashing in like never before. And yes, there are some artists that make more money than others, but they still only get a percentage of what their fans really pay them. I understand that they, being record companies or Google Play/App Store, need and rightfully should demand a fee for helping their content providers with a platform for their product. But at the same time, without the content providers, they would be nothing. The music industry has already seen the rise of various indie labels, artists starting their own record companies and such. And although I realize the difficulty in doing something equivalent within the mobile app industry, Google or Apple are already saying that you as a user should only download apps from approved and reliable sources, i.e. Google Play and App Store, I think we will see some sort of similar development. Perhaps companies will start providing app downloads on their own, create their own app store platform etc. Especially since the companies themselves get so little out of making their apps available on Google Play and App Store. They still need to market their apps for example.
• jamesholden 8y ago
  " They’re very aggressive about making sure companies aren’t trying to work around their billing," said Alex Austin, co-founder of mobile company Branch. "They have whole teams reviewing these flows to ensure they get their tax." " Funny, Apple has similar teams working in the same company, who work at finding ways to SUBVERT paying taxes to governments, etc. Seems ironic that they are so strict about developers paying this 'tax' and then simultaneously trying to avoid paying taxes themselves.
  • SmellyGeekBoy 8y ago
    You don't get to be the world's first trillion dollar company by leaving money on the table...
  • lotsofpulp 8y ago
    That's not ironic, it is exactly what one should expect from a team of people whose goal it is to make money. People do it in their personal lives too, try to get away with paying the least that they can, and earn as much as they can.
• snarfybarfy 8y ago
  I think this is a classic market failure due to network effects/monopoly; one of those cases that could be resolved(?) by looking at the earnings of the company in question. Are they making a loss. Break even. Small profit. Large profit? If, after all the creative accounting, they still show a large profit then it certainly must be a monopoly. Otherwise someone else would come in and offer the same service for less.
• teekert 8y ago
  I used to have a Moto G, the fist one with 8GB of memory. This forces you into a strict app diet... And hey, it turns out that many services have nice websites, some even more functional that their app counterparts (i.e. Facebook) and without the tracking (if you so choose) and weird permissions. By the way, Netflix may complain but they are the most horrible app I known when it comes to requiring Play services and a "normal" Android rom. Oh you have rootless LineageOS with all play services? Still no app for you. Funny thing is it was very easy to get is from apk mirror. Why not from netflix.com/apk? Hmm, perhaps this was their intent thinking about it now... Anyway, the tax is only a part of the locked ecosystem problem imo.
• wemdyjreichert 8y ago
  "Around the world, everyone is looking for ways to push back against American tech,". Why?
• Mikho 8y ago
  Eagerly wait for any big brand to refuse to release on iOS at all due to the tax and being unable to bypass it by an app installation via a web-site. This tyranny that takes the whole margin should definitely end. It's especially painful for any media business where a piece of content has only so many views and stores just take all the margin while adding absolutely zero to distribution, hosting, developing, promoting or engaging with users. It's like Samsung would start demanding a cut from anything used on an iPhone where there is a Samsung display. Stores do not even add value in app discovery and getting new users. They just demand even more money to promote an app in a store to later take yet another cut. Insane situation.
• tyrex2017 8y ago
  In the past I supported the Google and Apple tax, because they kind of created this opportunity. Now I believe they have gotten their money from this innovation, and the tax should be reduced to sth like 8% It is a monopoly now (inside Android or iOS phones).