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Personally, as an app developer, I think Spotify is taking the right stance here. I believe that Apple should take some cuts but not as high as 30%. I believe

Personally, as an app developer, I think Spotify is taking the right stance here. I believe that Apple should take some cuts but not as high as 30%. I believe for some categories like microtransaction based apps Apple should take maybe 5%. Plus, I think that if Apple has a competing service, then it should waive the tax altogether. It's only fair. If the only function of the App Store (or Play Store) is to provide hosting and some quality control then I don't see why apps can't be hosted on a secure website from the vendor - as far as I'm aware, Apple requires you have some sort of website anyway. At least Google allows installing apps without the Play Store, perhaps it's time Apple permitted something similar with its apps? This could solve this whole problem and have other positive side effects such as people being less likely to jailbreak their iPhones.

hokumguru 8y ago
This opens up a wide host of negative side-effects including the extreme ease of malware. I'd say the #1 value proposition for the App Store, and why most iOS users prefer it, is the guarantee of virus-free programs.
- headsoup 8y ago
  Why don't Apple/Google ensure AV/Malware protection is a default app? Why do we depend on Apple/Google protecting us from these big bad apps? If not Apple/Google controlling it directly, I'd imagine there would be a reasonable market for malware/AV providers on mobiles, if not solutions provided by Apple/Google.
  - Gorbzel 8y ago
    A minority of the HN circlejerk doesn’t like the proven security and ease of Apple’s ecosystem, so let’s artificially break that down and replace with inherently flawed anti-malware systems we’re required to use in hopes our phones don’t become botnet nodes with 1hr battery life? That’s so backward it’s insane.
  - scarface74 8y ago
    More to the point, why do you act as if malware protection has ever been effective and not just a resource drain?
supernova87a 8y ago
What is "should"? Who determines should, aside from what the law currently says? Maybe I'm uninformed, but it doesn't appear to me that access to an app store and the terms of such access (which by the way didn't even exist almost 10 years ago) is a public utility or good with an expectation of equal access or certain fair pricing. Then, under what right does anyone claim that Apple (or any ecosystem platform) has to do anything beyond what is regulated in the payment and terms of operation? What makes your 30% price the right call? If you're an app developer, are you equally ok with someone else determining what you get to charge for your app when you're done with it? Isn't that the same (lack of) logic?
- berbec 8y ago
  I was about to argue with this and rage against Apple, but then I remembered a very similar situation everyone deals with and no one complains about: Supermarket Generics. "How is it fair for Price Chopper to undercut Rice Crispies with a similar, cheaper product?" no on says this...
  - sinnoh 8y ago
    because people have had a longer amount of time to understand food. hang in there, my friend :)
  - mertd 8y ago
    Because your choice of phone brand does not tie you to a specific grocery where you can buy rice crispies. You can simply cross the street and shop at a competing grocery.
    - asdffdsa 8y ago
      Yeah, theres different smart phones just like theres different grocery stores
      - Dylan16807 8y ago
        If I go to a different grocery store, I can get products that are compatible with everything else I own. If we go with the store=phone analogy, then somehow my brand A flour and my brand B milk are magnetically repulsed and I can't make pancakes. It's not good for consumers.
Oletros 8y ago
A lower cut? Why not only allow to use their payment system?
GeekyBear 8y ago
Spotify has already turned off the ability for new accounts to pay to upgrade to a premium account inside their iOS app last year. You pay for your account on Spotify's own web site, which bypasses Apple getting any cut at all. https://support.spotify.com/us/account_payment_help/subscription_information/spotify-through-the-app-store/ https://support.spotify.com/us/account_payment_help/subscrip... Netflix has done the same thing. https://www.billboard.com/articles/business/8471988/spotify-netflix-bypassing-apple-app-store-billing-charges https://www.billboard.com/articles/business/8471988/spotify-... In my book, the problem is that you are not allowed to provide a link to your payment website inside your app.
- rubicon33 8y ago
  > In my book, the problem is that you are not allowed to provide a link to your payment website inside your app. This is especially damaging to small companies. Most people have heard of Spotify, Netflix, Pandora, etc. So it's somewhat natural for them (if not a bit akward) to go to the website if they can't get premium in the app. But for small companies that connection isn't immediately obvious. In my company for instance, we aren't allowed to put ANY reference to our website in the app (as it relates to purchasing premium). As a result when a user signs up, my only option is IAP. I cannot just assume they will naturally go to the website.
  - covercash 8y ago
    Most(every?) app that I’ve signed up for requires an email address. Some apps then send a verification or welcome email. If you mention and link to paid subscription upgrades in that email, will Apple pull your app?
    - Wowfunhappy 8y ago
      Will people actually read the email? Will they remember it at the time they actually want to upgrade their account? (An "email me a payment link" button would almost certainly get rejected by Apple)
gigatexal 8y ago
Try telling the IRS you think their tax rates are too high. Apple owns the sandbox with the most valuable customers and if you want to play in it you gotta pay. Personally I love letting Apple handle my subscriptions and subscribing through iTunes is one of the things it does well.
- hxegon 8y ago
  Do you think apple's subscription feature is worth paying 30% more for spotify? Do you think spotify should just suck it up and take the hit to keep prices the same because apple is providing a service (access and subscription handling) worth 30% of the price? Not even Amazon charges that much. I don't know if the anti-competitive practices mentioned are illegal, but they're certainly scummy. The company that owns the walled garden shouldn't be bullying spotify to try and prop apple music up.
  - p2t2p 8y ago
    What if Apple Music is for free? Should be Apple be punished then, like MS for IE being free?
    - vkou 8y ago
      Then Apple is using its success in one market (Selling phones) to price-dump in another market (music). It would be the poster child of an anti-trust case.
      - thirdsun 8y ago
        Does this view still apply if Apple considers the music subscription as part of the product/device? Consider the countless users that, perhaps rightfully, argue that Apple should include more than 5 GB of iCloud storage for backups, user data, etc. That could be considered part of the product while it still competes in a different market with Dropbox and similar services.
  - gigatexal 8y ago
latexr 8y ago
> I believe for some categories like microtransaction based apps Apple should take maybe 5%. And then every PAID app will switch to FREE and charge for PRO, to circumvent the 30%. Oh, Apple complained it’s not technically a microtransaction? Fine, just separate every feature into a new purchase. > If the only function of the App Store (or Play Store) is to provide hosting and some quality control then I don't see why apps can't be hosted on a secure website from the vendor If the vendor server is compromised or is down, a download from the App Store won’t work for a single app, leaving customers confused and complaining to Apple, who can’t fix the issue.
- blowski 8y ago
  That’s sort of true for the app itself - if the Trello API is down then the Trello app doesn’t work.
  - threeseed 8y ago
    Most people know the difference. App doesn’t download - Apple’s fault. App doesn’t work - App developer’s fault.
- Dylan16807 8y ago
  > And then every PAID app will switch to FREE and charge for PRO, to circumvent the 30%. Then make it 30% of the first 20 or 30 dollars, and 5% or less after. That more than pays for Apple's verification work without letting them gouge repeat payments.
  - scarface74 8y ago
    How many apps on the store sell for over $5 let alone $30?
    - Dylan16807 8y ago
      That's the point, yeah. For the vast majority of apps the 30% cut remains exactly the same, with no loopholes. But if you're dealing with a $100+ per year subscription, the fee goes down to a modest processing cost.
judge2020 8y ago
While the Apple Tax is a problem of its own, I would hate for Apple to allow downloading apps through websites. A large part of iOS security is that everything has to be co-signed by Apple unless it's an Enterprise distribution app [1], so even if there is an exploit that breaks out of the app sandbox you don't have to worry about malicious websites drive-by downloading it. 1: they're likely refining the process of obtaining one of these certs after the recent news reports on business fraud
- oneplane 8y ago
  While I agree that the percentage that Apple takes per sale is too high, I completely disagree with the term 'vendor Tax'. While it's fine as a fun synonym, it's problematic as soon as people start to think about it as an actual Tax. It's not a Tax, it's the amount of money the vendor/platform owner wants to make for every sale. You can opt-out (by not being on the platform, still a choice!) if you want to. But because it's bad for the bottom-line of most companies to do so, they position themselves as a sad little broken bird that gets stomped around by the big bad corp. Newsflash: they all are generic money making capitalistic institutions that on the business side exclusively exist to make money. For profit. For doing things, any thing, to make money. That goes for Spotify and Apple just the same. On the side of 'level playing field' they do of course still have a point, just like all the anti-trust stuff we had/have with Microsoft and Google. It does make me wonder a bit why this hasn't been involving other companies like Amazon and Facebook. (or, why it hasn't been suggested as widely as it is now) I do wonder about the technical aspect of those store denials and watchOS problems; other streaming services do not face the same issues/pressue, so what makes spotify so special? They app is a bit crappy (it's not very good at maintaining/restoring state and doesn't have the most consistent UI), but other than that, it doesn't do much different things when compared to others (like Deezer or Tidal). Putting it as a "Apple Music vs. Spotify" thing is a bit weird too; while it might make sense, it doesn't make sense if it's just that and all the other streaming and buying services are free to do what they want. It's weird stuff.
  - Dylan16807 8y ago
    > It's not a Tax, it's the amount of money the vendor/platform owner wants to make for every sale. You can opt-out (by not being on the platform, still a choice!) if you want to. And I can opt out of selling things in Idaho if I don't want to pay their sales tax. I don't understand the distinction you're making at all.
dalore 8y ago
What they need to do is split off the new competing services into a walled corporation (even new entity). And they play fair by the rules, so 30% tax even to them.
- cobookman 8y ago
  With said company owned by apple and paying apple for licensing fees that just so happen to be equivalent to its yearly rev. That's easy enough to circumvent.
- threeseed 8y ago
  Not sure if you know how enterprises work. But it is standard practice for divisions to bill other divisions for work. I would be almost certain that Apple Music is already paying the 30% tax however since it’s internal it doesn’t really make a difference. Likewise splitting into a new entity does not change anything.
  - paxy 8y ago
    It changes a lot, since as an independent entity Apple Music (for example) is answerable to its own investors and board of directors, including having the pressure to be profitable. Right now Apple can subsidize them for as long as they force all competitors out.
duhi88 8y ago
Making micro-transactions more profitable would be an unfortunate course of action. There are enough of those apps in the store, and they are clearly profitable enough if they can buy Super Bowl airtime. Subscriptions for apps should be different, but I see a challenge in drawing the line between Spotify/Netflix and a scam app like "awesome culculator" that charges $5/mo to people who don'didn't realize it was a subscription (there was an article on HN this week about apps like that, targeting kids and the elderly, of course). If Apple has a stipulation about requiring a website, then maybe subscription-based apps can get a discount on the 30% fee if they also have a web or desktop-based version of their application that provides comparable functionality and takes payments.
- pwaivers 8y ago
  > ...and they are clearly profitable enough if they can buy Super Bowl airtime. This is not a good reason to limit how much money an app developer makes. You want to make the play field fair, regardless if there are some companies making a lot of money.
- paxy 8y ago
  > and they are clearly profitable enough if they can buy Super Bowl airtime These dollars are most certainly coming from VC funding. Most of these businesses aren't (and will never be) profitable.
- streblo 8y ago
  > There are enough of those apps in the store, and they are clearly profitable enough if they can buy Super Bowl airtime. You're talking about the top 1% or less of micro transaction-based apps here. There are ton of indie apps that depend on micro transactions and aren't making enough to buy a Super Bowl ad. It's unfortunate that spammy or low quality micro transaction-based apps have become commonplace, but I'd rather that be dealt with by the App Store flagging and filtering the apps with issues.
veritas20 8y ago
Not sure that I completely follow your logic in regards to the "tax" here. With any product, you have two main things: production of the product and distribution of the product. Spotify doesn't NEED to be on Apple devices (they started off on the web), but they WANT to be on Apple devices (and Android devices) because they are great distribution channels for its product. That said, how much is distribution worth to Spotify? Imagine that Spotify was not software, but instead it was a hardware device. Would they expect Best Buy to carry it for free? Would they expect Walmart or Target not to offer a store branded competitor? I think not. When you don't own your distribution channel, you pay for distribution one way or another.
- foobarchu 8y ago
  The practice of stores like Walmart strongarming producers into reducing prices and quality is a well established problem with a number of articles and documentaries around it already. In either case the difference between a store doing this and Apple doing this is that Best Buy is not the one of two practical ways to access the product, and consumers are not compelled to go only to Best Buy simply because they chose to go there once. Figuring out the proper practices for phone app markets is difficult right now, because we really can't compare them to anything that already exists. Physical markets just aren't the same thing.
- 43920 8y ago
  Mobile OS's are more than just a "distribution channel" though, because there's a significant amount of lock-in that prevents customers from buying your software from another distributor even if they want to. I think a better metaphor is like this: A billion people live in a company town ("Appleville"). When they first decided to move there, they paid a lot of money to buy a house there, and in return they get access to all the benefits the town offers - nicely-built houses, well-maintained streets, and access to lots of public services. Because living in the town is so nice, houses there cost a lot more than they do in other areas. While you live in the town, you've signed a contract that says you're only allowed to buy things from one store owned by the town's developer. Most popular items are available at the store, so it's never too much of an inconvience, but sometimes things are more expensive than they are in other towns, or they aren't available at all. Every time you drive into the town, you get stopped, and a bunch of guards search your car. If they find anything in your car that you didn't buy from them, they take it, and you can't have it back. If you ever do want to leave the town, not only will you have to buy a house somewhere else (and your existing house will be worth a lot less than what you paid for it), but you're not allowed to take any of the stuff in your house with you - it all just disappears forever. Now imagine you're a new company trying to sell a product, and the store owner won't let you sell your product in their town for some reason (you aren't paying them enough, it violates one of their rules, etc.) Even if the people living inside the town want your product, they can't buy it unless they completely uproot their life and move somewhere else, which no one is willing to do. And so the town owner is able to kill your product, and prevent it from ever being a threat to them. (Meanwhile, the town owner copies your product and starts selling it in the store themselves).
cma 8y ago
"then it should waive the tax altogether. It's only fair." They've still got to at least cover bandwidth (minor) and payment processing.
3327 8y ago
DOJ - SOMEONE PLEASE TELL ME (SORRY FOR CAPS) HOW IS THIS DIFFERENT FROM USA vs. MICROSOFT (besides the obvious).
soup10 8y ago
Apple should take no cut, and profit only from the sale of hardware. By taking cut on software they are double dipping. Good software makes the phone more valuable for users and drives phone sales.
scarface74 8y ago
If the only function of the App Store (or Play Store) is to provide hosting and some quality control then I don't see why apps can't be hosted on a secure website from the vendor - as far as I'm aware, Apple requires you have some sort of website anyway. Because that worked so well for Windows with malware,viruses, and ransomware.
ksec 8y ago
I believe it is not the problem of 30% cuts. It is the Problem of Anti-Competitive behaviour when you have a competing services without the cost of cuts. This is not the same as Amazon offering their own label in their Store. Customers could shop in dozens of many other online retail or local retail. And Amazon does not charge other label 30% cut for stocking fees. I believe Apple should charge a fair amount only when they have a competing product or services within its locked system. Had Apple Charge 15% for the first year on Spotify and 10% for all subsequent subscription it would have been much better. I don't believe the 5% would work, as I have seen many saying 5% should be enough. The cost of running microtransaction, processing, billing, legal, etc are just about break even at 5% even in the scale of Apple. I don't see charging 10% would seem unfair. ( In US at least, in EU the processing fees are much much lower ) Or Apple should never have made Apple Music in the first place. I still don't see any value in Apple offering it. iTunes was required for iPod. And it changes the whole music industry as a whole, along with iPod sold which ultimately saved Apple. No one will buy iPhone because of Apple Music, and Apple Music itself isn't even profitable.

hokumguru 8y ago

This opens up a wide host of negative side-effects including the extreme ease of malware. I'd say the #1 value proposition for the App Store, and why most iOS users prefer it, is the guarantee of virus-free programs.

headsoup 8y ago
Why don't Apple/Google ensure AV/Malware protection is a default app? Why do we depend on Apple/Google protecting us from these big bad apps? If not Apple/Google controlling it directly, I'd imagine there would be a reasonable market for malware/AV providers on mobiles, if not solutions provided by Apple/Google.
- Gorbzel 8y ago
  A minority of the HN circlejerk doesn’t like the proven security and ease of Apple’s ecosystem, so let’s artificially break that down and replace with inherently flawed anti-malware systems we’re required to use in hopes our phones don’t become botnet nodes with 1hr battery life? That’s so backward it’s insane.
- scarface74 8y ago
  More to the point, why do you act as if malware protection has ever been effective and not just a resource drain?

supernova87a 8y ago

What is "should"? Who determines should, aside from what the law currently says? Maybe I'm uninformed, but it doesn't appear to me that access to an app store and the terms of such access (which by the way didn't even exist almost 10 years ago) is a public utility or good with an expectation of equal access or certain fair pricing. Then, under what right does anyone claim that Apple (or any ecosystem platform) has to do anything beyond what is regulated in the payment and terms of operation? What makes your 30% price the right call? If you're an app developer, are you equally ok with someone else determining what you get to charge for your app when you're done with it? Isn't that the same (lack of) logic?

berbec 8y ago
I was about to argue with this and rage against Apple, but then I remembered a very similar situation everyone deals with and no one complains about: Supermarket Generics. "How is it fair for Price Chopper to undercut Rice Crispies with a similar, cheaper product?" no on says this...
- sinnoh 8y ago
  because people have had a longer amount of time to understand food. hang in there, my friend :)
- mertd 8y ago
  Because your choice of phone brand does not tie you to a specific grocery where you can buy rice crispies. You can simply cross the street and shop at a competing grocery.
  - asdffdsa 8y ago
    Yeah, theres different smart phones just like theres different grocery stores
    - Dylan16807 8y ago
      If I go to a different grocery store, I can get products that are compatible with everything else I own. If we go with the store=phone analogy, then somehow my brand A flour and my brand B milk are magnetically repulsed and I can't make pancakes. It's not good for consumers.

Oletros 8y ago

A lower cut? Why not only allow to use their payment system?

GeekyBear 8y ago

Spotify has already turned off the ability for new accounts to pay to upgrade to a premium account inside their iOS app last year. You pay for your account on Spotify's own web site, which bypasses Apple getting any cut at all. https://support.spotify.com/us/account_payment_help/subscription_information/spotify-through-the-app-store/ https://support.spotify.com/us/account_payment_help/subscrip... Netflix has done the same thing. https://www.billboard.com/articles/business/8471988/spotify-netflix-bypassing-apple-app-store-billing-charges https://www.billboard.com/articles/business/8471988/spotify-... In my book, the problem is that you are not allowed to provide a link to your payment website inside your app.

rubicon33 8y ago
> In my book, the problem is that you are not allowed to provide a link to your payment website inside your app. This is especially damaging to small companies. Most people have heard of Spotify, Netflix, Pandora, etc. So it's somewhat natural for them (if not a bit akward) to go to the website if they can't get premium in the app. But for small companies that connection isn't immediately obvious. In my company for instance, we aren't allowed to put ANY reference to our website in the app (as it relates to purchasing premium). As a result when a user signs up, my only option is IAP. I cannot just assume they will naturally go to the website.
- covercash 8y ago
  Most(every?) app that I’ve signed up for requires an email address. Some apps then send a verification or welcome email. If you mention and link to paid subscription upgrades in that email, will Apple pull your app?
  - Wowfunhappy 8y ago
    Will people actually read the email? Will they remember it at the time they actually want to upgrade their account? (An "email me a payment link" button would almost certainly get rejected by Apple)

gigatexal 8y ago

Try telling the IRS you think their tax rates are too high. Apple owns the sandbox with the most valuable customers and if you want to play in it you gotta pay. Personally I love letting Apple handle my subscriptions and subscribing through iTunes is one of the things it does well.

hxegon 8y ago
Do you think apple's subscription feature is worth paying 30% more for spotify? Do you think spotify should just suck it up and take the hit to keep prices the same because apple is providing a service (access and subscription handling) worth 30% of the price? Not even Amazon charges that much. I don't know if the anti-competitive practices mentioned are illegal, but they're certainly scummy. The company that owns the walled garden shouldn't be bullying spotify to try and prop apple music up.
- p2t2p 8y ago
  What if Apple Music is for free? Should be Apple be punished then, like MS for IE being free?
  - vkou 8y ago
    Then Apple is using its success in one market (Selling phones) to price-dump in another market (music). It would be the poster child of an anti-trust case.
    - thirdsun 8y ago
      Does this view still apply if Apple considers the music subscription as part of the product/device? Consider the countless users that, perhaps rightfully, argue that Apple should include more than 5 GB of iCloud storage for backups, user data, etc. That could be considered part of the product while it still competes in a different market with Dropbox and similar services.
- gigatexal 8y ago

latexr 8y ago

> I believe for some categories like microtransaction based apps Apple should take maybe 5%. And then every PAID app will switch to FREE and charge for PRO, to circumvent the 30%. Oh, Apple complained it’s not technically a microtransaction? Fine, just separate every feature into a new purchase. > If the only function of the App Store (or Play Store) is to provide hosting and some quality control then I don't see why apps can't be hosted on a secure website from the vendor If the vendor server is compromised or is down, a download from the App Store won’t work for a single app, leaving customers confused and complaining to Apple, who can’t fix the issue.

blowski 8y ago
That’s sort of true for the app itself - if the Trello API is down then the Trello app doesn’t work.
- threeseed 8y ago
  Most people know the difference. App doesn’t download - Apple’s fault. App doesn’t work - App developer’s fault.
Dylan16807 8y ago
> And then every PAID app will switch to FREE and charge for PRO, to circumvent the 30%. Then make it 30% of the first 20 or 30 dollars, and 5% or less after. That more than pays for Apple's verification work without letting them gouge repeat payments.
- scarface74 8y ago
  How many apps on the store sell for over $5 let alone $30?
  - Dylan16807 8y ago
    That's the point, yeah. For the vast majority of apps the 30% cut remains exactly the same, with no loopholes. But if you're dealing with a $100+ per year subscription, the fee goes down to a modest processing cost.

judge2020 8y ago

While the Apple Tax is a problem of its own, I would hate for Apple to allow downloading apps through websites. A large part of iOS security is that everything has to be co-signed by Apple unless it's an Enterprise distribution app [1], so even if there is an exploit that breaks out of the app sandbox you don't have to worry about malicious websites drive-by downloading it. 1: they're likely refining the process of obtaining one of these certs after the recent news reports on business fraud

oneplane 8y ago
While I agree that the percentage that Apple takes per sale is too high, I completely disagree with the term 'vendor Tax'. While it's fine as a fun synonym, it's problematic as soon as people start to think about it as an actual Tax. It's not a Tax, it's the amount of money the vendor/platform owner wants to make for every sale. You can opt-out (by not being on the platform, still a choice!) if you want to. But because it's bad for the bottom-line of most companies to do so, they position themselves as a sad little broken bird that gets stomped around by the big bad corp. Newsflash: they all are generic money making capitalistic institutions that on the business side exclusively exist to make money. For profit. For doing things, any thing, to make money. That goes for Spotify and Apple just the same. On the side of 'level playing field' they do of course still have a point, just like all the anti-trust stuff we had/have with Microsoft and Google. It does make me wonder a bit why this hasn't been involving other companies like Amazon and Facebook. (or, why it hasn't been suggested as widely as it is now) I do wonder about the technical aspect of those store denials and watchOS problems; other streaming services do not face the same issues/pressue, so what makes spotify so special? They app is a bit crappy (it's not very good at maintaining/restoring state and doesn't have the most consistent UI), but other than that, it doesn't do much different things when compared to others (like Deezer or Tidal). Putting it as a "Apple Music vs. Spotify" thing is a bit weird too; while it might make sense, it doesn't make sense if it's just that and all the other streaming and buying services are free to do what they want. It's weird stuff.
- Dylan16807 8y ago
  > It's not a Tax, it's the amount of money the vendor/platform owner wants to make for every sale. You can opt-out (by not being on the platform, still a choice!) if you want to. And I can opt out of selling things in Idaho if I don't want to pay their sales tax. I don't understand the distinction you're making at all.

dalore 8y ago

What they need to do is split off the new competing services into a walled corporation (even new entity). And they play fair by the rules, so 30% tax even to them.

cobookman 8y ago
With said company owned by apple and paying apple for licensing fees that just so happen to be equivalent to its yearly rev. That's easy enough to circumvent.
threeseed 8y ago
Not sure if you know how enterprises work. But it is standard practice for divisions to bill other divisions for work. I would be almost certain that Apple Music is already paying the 30% tax however since it’s internal it doesn’t really make a difference. Likewise splitting into a new entity does not change anything.
- paxy 8y ago
  It changes a lot, since as an independent entity Apple Music (for example) is answerable to its own investors and board of directors, including having the pressure to be profitable. Right now Apple can subsidize them for as long as they force all competitors out.

duhi88 8y ago

Making micro-transactions more profitable would be an unfortunate course of action. There are enough of those apps in the store, and they are clearly profitable enough if they can buy Super Bowl airtime. Subscriptions for apps should be different, but I see a challenge in drawing the line between Spotify/Netflix and a scam app like "awesome culculator" that charges $5/mo to people who don'didn't realize it was a subscription (there was an article on HN this week about apps like that, targeting kids and the elderly, of course). If Apple has a stipulation about requiring a website, then maybe subscription-based apps can get a discount on the 30% fee if they also have a web or desktop-based version of their application that provides comparable functionality and takes payments.

pwaivers 8y ago
> ...and they are clearly profitable enough if they can buy Super Bowl airtime. This is not a good reason to limit how much money an app developer makes. You want to make the play field fair, regardless if there are some companies making a lot of money.
paxy 8y ago
> and they are clearly profitable enough if they can buy Super Bowl airtime These dollars are most certainly coming from VC funding. Most of these businesses aren't (and will never be) profitable.
streblo 8y ago
> There are enough of those apps in the store, and they are clearly profitable enough if they can buy Super Bowl airtime. You're talking about the top 1% or less of micro transaction-based apps here. There are ton of indie apps that depend on micro transactions and aren't making enough to buy a Super Bowl ad. It's unfortunate that spammy or low quality micro transaction-based apps have become commonplace, but I'd rather that be dealt with by the App Store flagging and filtering the apps with issues.

veritas20 8y ago

Not sure that I completely follow your logic in regards to the "tax" here. With any product, you have two main things: production of the product and distribution of the product. Spotify doesn't NEED to be on Apple devices (they started off on the web), but they WANT to be on Apple devices (and Android devices) because they are great distribution channels for its product. That said, how much is distribution worth to Spotify? Imagine that Spotify was not software, but instead it was a hardware device. Would they expect Best Buy to carry it for free? Would they expect Walmart or Target not to offer a store branded competitor? I think not. When you don't own your distribution channel, you pay for distribution one way or another.

foobarchu 8y ago
The practice of stores like Walmart strongarming producers into reducing prices and quality is a well established problem with a number of articles and documentaries around it already. In either case the difference between a store doing this and Apple doing this is that Best Buy is not the one of two practical ways to access the product, and consumers are not compelled to go only to Best Buy simply because they chose to go there once. Figuring out the proper practices for phone app markets is difficult right now, because we really can't compare them to anything that already exists. Physical markets just aren't the same thing.
43920 8y ago
Mobile OS's are more than just a "distribution channel" though, because there's a significant amount of lock-in that prevents customers from buying your software from another distributor even if they want to. I think a better metaphor is like this: A billion people live in a company town ("Appleville"). When they first decided to move there, they paid a lot of money to buy a house there, and in return they get access to all the benefits the town offers - nicely-built houses, well-maintained streets, and access to lots of public services. Because living in the town is so nice, houses there cost a lot more than they do in other areas. While you live in the town, you've signed a contract that says you're only allowed to buy things from one store owned by the town's developer. Most popular items are available at the store, so it's never too much of an inconvience, but sometimes things are more expensive than they are in other towns, or they aren't available at all. Every time you drive into the town, you get stopped, and a bunch of guards search your car. If they find anything in your car that you didn't buy from them, they take it, and you can't have it back. If you ever do want to leave the town, not only will you have to buy a house somewhere else (and your existing house will be worth a lot less than what you paid for it), but you're not allowed to take any of the stuff in your house with you - it all just disappears forever. Now imagine you're a new company trying to sell a product, and the store owner won't let you sell your product in their town for some reason (you aren't paying them enough, it violates one of their rules, etc.) Even if the people living inside the town want your product, they can't buy it unless they completely uproot their life and move somewhere else, which no one is willing to do. And so the town owner is able to kill your product, and prevent it from ever being a threat to them. (Meanwhile, the town owner copies your product and starts selling it in the store themselves).

cma 8y ago

"then it should waive the tax altogether. It's only fair." They've still got to at least cover bandwidth (minor) and payment processing.

3327 8y ago

DOJ - SOMEONE PLEASE TELL ME (SORRY FOR CAPS) HOW IS THIS DIFFERENT FROM USA vs. MICROSOFT (besides the obvious).

soup10 8y ago

Apple should take no cut, and profit only from the sale of hardware. By taking cut on software they are double dipping. Good software makes the phone more valuable for users and drives phone sales.

scarface74 8y ago

If the only function of the App Store (or Play Store) is to provide hosting and some quality control then I don't see why apps can't be hosted on a secure website from the vendor - as far as I'm aware, Apple requires you have some sort of website anyway. Because that worked so well for Windows with malware,viruses, and ransomware.

ksec 8y ago

I believe it is not the problem of 30% cuts. It is the Problem of Anti-Competitive behaviour when you have a competing services without the cost of cuts. This is not the same as Amazon offering their own label in their Store. Customers could shop in dozens of many other online retail or local retail. And Amazon does not charge other label 30% cut for stocking fees. I believe Apple should charge a fair amount only when they have a competing product or services within its locked system. Had Apple Charge 15% for the first year on Spotify and 10% for all subsequent subscription it would have been much better. I don't believe the 5% would work, as I have seen many saying 5% should be enough. The cost of running microtransaction, processing, billing, legal, etc are just about break even at 5% even in the scale of Apple. I don't see charging 10% would seem unfair. ( In US at least, in EU the processing fees are much much lower ) Or Apple should never have made Apple Music in the first place. I still don't see any value in Apple offering it. iTunes was required for iPod. And it changes the whole music industry as a whole, along with iPod sold which ultimately saved Apple. No one will buy iPhone because of Apple Music, and Apple Music itself isn't even profitable.