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Apple’s app store and other digital marketplaces [pdf]

59 points by mudil 6y ago

herf 6y ago
This is a fine bit of research, but exclusivity should be the first question--the high-order bit. There has been essentially no market discovery of prices because of exclusivity. Since 1992, there has been "free" distribution online for software (e.g., Quake launched this way in 1993), and makers of software were able to find their own distribution models without retail in the middle. This is also how the entire web happened, when Netscape Navigator launched in 1994. To compare pricing in mobile app stores to things like brick and mortar boxed software is a mistake. It ignores the internet entirely, and how the industry worked for the 15 years before the iPhone launched. There are much more price-efficient models than this.
- mattl 6y ago
  Doom is 1993. Quake is 1996.
- dfabulich 6y ago
  As the report shows, all of the major stores charge 30%, not just Apple, even when the store has no exclusivity. Apple App Store charges 30%, and it's the only way to publish a native app on iOS, but the Google Play Store charges 30%, too, and Android supports sideloading. The Windows Store and Steam both charge 30%, too, even though it's trivial to download games for Windows from any web site. It would be reasonable to guess that Apple would exploit its market position to charge higher rates than the Google Play Store or Steam, but that hasn't happened, and it doesn't seem like it's ever going to happen.
  - supernova87a 6y ago
    I'm no legal strategist, but I would take the position that even if Apple's store charged double or triple what others do, that is not the standard by which what is legal should be measured. Apple (or any platform) provides a service for people / companies to voluntarily develop software to offer to the users of that platform. What cut they take is an agreement entered into based on people's assessment of the costs and benefits provided, and people are free to decline it and take their efforts elsewhere. Their terms for their platform are not hindering people from competing and offering services on another platform. Each developer is free to make his/her own judgement about whether that commission is tolerable and desired, for the value created. If the agreement if free and voluntary, Apple could set any price it desires. You, in your own business are free to (and probably generally also try to) set the maximum price you desire. By some similar logic, all apps should charge the same price to be seen as fair. What principle says that one platform's price has to be in line with others? It's what your offering can justify, and what people are willing to pay, with free choice.
    - dfabulich 6y ago
      I wasn't making an argument that Apple isn't doing anything illegal, but I think it's not credible to argue as @herf did that "there has been no market discovery of prices due to exclusivity." The market for Android and Windows app stores has settled on exactly the same rates as iOS apps, which is exactly same rate as game-console platforms that have only one exclusive store. 30%, across the board. Android alone is sufficient evidence that sideloading doesn't force the dominant app store (Google) to lower its rates to compete.
      - supernova87a 6y ago
        Oh, sorry, I wasn't speaking in the form of direct "you", I was just piggybacking on your comment to state a parallel point.
  - hadrien01 6y ago
    Windows Store is not 30%, it's 15% or 5% depending on whether the user used the Windows Store search or a link from the developer's website.
    - dfabulich 6y ago
      From TFA: * 30% on games * 30% on all sales in Business and Education stores * 30% for Windows 8 devices * 15% otherwise
  - RealStickman_ 6y ago
    The thing is that you can easily avoid paying those cuts to these stores while still distributing your program on that platform. It is much more difficult to sideload an app to an iphone. You can not expect the average user to sign the app they downloaded every few days so they can keep using it. Hell, even the Android system policy favours Google way too much in my opinion and there you "only" have to toggle one switch.
  - SyneRyder 6y ago
    > The Windows Store and Steam both charge 30%, too... That's probably the easiest way to discredit this report, their Windows Store numbers are wrong if they're claiming all sales are charged 30%. Microsoft only charge 5% for a sale referred from another website, and only 15% for a sale that originated in the store: https://blogs.windows.com/windowsdeveloper/2018/05/07/a-new-microsoft-store-revenue-share-is-coming/ https://blogs.windows.com/windowsdeveloper/2018/05/07/a-new-... Google seems to already be out in front of the likely ramifications. I got a Google survey last week asking opinions on spinning the Play Store off as a separate non-Google owned company, how much I would pay to use the Play Store, and opinions on competing sideloaded stores (eg Epic Games Store, Amazon)
- simonh 6y ago
  Games consoles platform owners controlling access to their platforms to third party software predate the internet by decades. There is nothing whatever new about the model of commercially licensing access to a platform to software vendors, it’s almost as old as the consumer computer industry.
grezql 6y ago
whats more interesting is how much Apple paid for this report.
- martimarkov 6y ago
  I don’t see how that is more interesting when the data in the report is accurate. So I don’t think they made stuff up in the report. The data is pretty much public.
  - agustif 6y ago
    Data can both be accurate and biased... Who's footing the bill is relevant to the later
  - RealStickman_ 6y ago
    If you torture the data long enough it will confess to anything.
    - kanobo 6y ago
      That's an excellent and funny way to say it, makes me chuckle, I will add it to my brain archive if you don't mind.
- neximo64 6y ago
  How much did they pay for this report? It doesn’t seem to mention that
Despegar 6y ago
I think this is mostly a response to David Cicilline's comment that Apple's 30% is "highway robbery" [1]. It compares it to other marketplace take rates showing that Apple's 30% isn't "highway robbery", but also that Apple does much more to earn their 30% than say GrubHub given that iOS apps rely heavily on Apple tools and technologies to create and distribute apps. [1] https://www.theverge.com/2020/6/18/21295778/apple-app-store-hey-email-fees-policies-antitrust-wwdc-2020 https://www.theverge.com/2020/6/18/21295778/apple-app-store-...
- damnyou 6y ago
  Do developers have a reasonable choice other than to use Apple tools? You can't even compile an iOS app on a server-class operating system and instead have to overpay for low-spec Macs for CI.
  - Despegar 6y ago
    No, but the market wouldn't even exist if not for Apple creating it. iOS apps by its nature depend on Apple's technology. It isn't the same as restaurants or hotels that acquire customers through GrubHub or Booking.
    - damnyou 6y ago
      I'm pretty sure if Apple hadn't created the modern smartphone someone else would have, and they'd probably have been less controlling and overall better than Apple too. The structural conditions for smartphones existed, Apple (and Google) just happened to be in the right place at the right time.
      - simonh 6y ago
        I don’t see why that matters. Outside health and safety or merchantability, do we really want anyone dictating what features software can or cannot have, and how they may or may not be implemented? There is no requirement on Apple, or any other manufacturer to have an App Store at all, or to facilitate the installation of software from potentially competing firms, or any regulations requiring how they may or may not go about doing it. It’s not obvious to me that’s a route we really need to go down.
PaulHoule 6y ago
When you're comparing your client to Ticketmaster you are in trouble. You're out of touch: go work for a politician that needs a few Mooks.
- mthoms 6y ago
  Exactly. They also managed to compare themselves (favorably) to high end auction houses like Christies. What a bizarre comparison.
supernova87a 6y ago
Hacker News readers are a pretty biased sample of people -- they generally have direct interests in lowering commissions paid because they run businesses paying such commissions. And advocating that any platform provider is a monopoly restricting free exercise of selling goods. Often, the arguments will be phrased in terms of "should" or "fair" or "can't". But this is the oldest position in the book and is a fight that comes naturally with commercial activity -- everyone wants to not have a middleman, and fight against it. The question is, are you entitled legally to have some certain % charged to you? As a matter of "fairness"? Is a platform that controls access to a fraction of mobile device software sales an exclusionary monopoly? Has that prevented you from selling software elsewhere, or exercising your trade as a programmer? I personally (and I have no financial interests either way) think the issue is not as principled as some people make it out to be.
- jedimind 6y ago
  > Hacker News readers are a pretty biased sample of people That's a vacuous statement. Is anyone working at Apple or benefiting from Apple's monopolies any less biased? The essential question is rather if such behavior is fundamentally anti competitive and contrary to the spirit of the law. Why was Microsoft's installing Internet Explorer on their own OS a cardinal sin worthy of punishment, while Apple is getting away with behavior far worse than Microsoft's, yet it goes unpunished, so they get encouraged to behave even worse. I guess it's all about proper lobbying nowadays.
  - supernova87a 6y ago
    As a consumer of mobile apps, I'm generally farther removed from the argument, and not going to benefit from the decision either way. Are you going to be charging me less if Apple gave a discount on your app commissions? App developers are highly likely to claim that the platform is monopolistic because they would benefit from such a decision. And argue from a "principle" point of view, when really all it is is a price dispute.
    - jedimind 6y ago
t0ughcritic 6y ago
The anti trust case can’t come soon enough. Apple is definitely taking advantage of its position, the fact that they also ‘help’ developers remove many reviews where users complain of price proves that costs are pushed to end users which is not good.they get them deleted so there is no evidence for anyone to say it’s a problem. Well played.

59 points by mudil 6y ago

herf 6y ago

This is a fine bit of research, but exclusivity should be the first question--the high-order bit. There has been essentially no market discovery of prices because of exclusivity. Since 1992, there has been "free" distribution online for software (e.g., Quake launched this way in 1993), and makers of software were able to find their own distribution models without retail in the middle. This is also how the entire web happened, when Netscape Navigator launched in 1994. To compare pricing in mobile app stores to things like brick and mortar boxed software is a mistake. It ignores the internet entirely, and how the industry worked for the 15 years before the iPhone launched. There are much more price-efficient models than this.

mattl 6y ago
Doom is 1993. Quake is 1996.
dfabulich 6y ago
As the report shows, all of the major stores charge 30%, not just Apple, even when the store has no exclusivity. Apple App Store charges 30%, and it's the only way to publish a native app on iOS, but the Google Play Store charges 30%, too, and Android supports sideloading. The Windows Store and Steam both charge 30%, too, even though it's trivial to download games for Windows from any web site. It would be reasonable to guess that Apple would exploit its market position to charge higher rates than the Google Play Store or Steam, but that hasn't happened, and it doesn't seem like it's ever going to happen.
- supernova87a 6y ago
  I'm no legal strategist, but I would take the position that even if Apple's store charged double or triple what others do, that is not the standard by which what is legal should be measured. Apple (or any platform) provides a service for people / companies to voluntarily develop software to offer to the users of that platform. What cut they take is an agreement entered into based on people's assessment of the costs and benefits provided, and people are free to decline it and take their efforts elsewhere. Their terms for their platform are not hindering people from competing and offering services on another platform. Each developer is free to make his/her own judgement about whether that commission is tolerable and desired, for the value created. If the agreement if free and voluntary, Apple could set any price it desires. You, in your own business are free to (and probably generally also try to) set the maximum price you desire. By some similar logic, all apps should charge the same price to be seen as fair. What principle says that one platform's price has to be in line with others? It's what your offering can justify, and what people are willing to pay, with free choice.
  - dfabulich 6y ago
    I wasn't making an argument that Apple isn't doing anything illegal, but I think it's not credible to argue as @herf did that "there has been no market discovery of prices due to exclusivity." The market for Android and Windows app stores has settled on exactly the same rates as iOS apps, which is exactly same rate as game-console platforms that have only one exclusive store. 30%, across the board. Android alone is sufficient evidence that sideloading doesn't force the dominant app store (Google) to lower its rates to compete.
    - supernova87a 6y ago
      Oh, sorry, I wasn't speaking in the form of direct "you", I was just piggybacking on your comment to state a parallel point.
- hadrien01 6y ago
  Windows Store is not 30%, it's 15% or 5% depending on whether the user used the Windows Store search or a link from the developer's website.
  - dfabulich 6y ago
    From TFA: * 30% on games * 30% on all sales in Business and Education stores * 30% for Windows 8 devices * 15% otherwise
- RealStickman_ 6y ago
  The thing is that you can easily avoid paying those cuts to these stores while still distributing your program on that platform. It is much more difficult to sideload an app to an iphone. You can not expect the average user to sign the app they downloaded every few days so they can keep using it. Hell, even the Android system policy favours Google way too much in my opinion and there you "only" have to toggle one switch.
- SyneRyder 6y ago
  > The Windows Store and Steam both charge 30%, too... That's probably the easiest way to discredit this report, their Windows Store numbers are wrong if they're claiming all sales are charged 30%. Microsoft only charge 5% for a sale referred from another website, and only 15% for a sale that originated in the store: https://blogs.windows.com/windowsdeveloper/2018/05/07/a-new-microsoft-store-revenue-share-is-coming/ https://blogs.windows.com/windowsdeveloper/2018/05/07/a-new-... Google seems to already be out in front of the likely ramifications. I got a Google survey last week asking opinions on spinning the Play Store off as a separate non-Google owned company, how much I would pay to use the Play Store, and opinions on competing sideloaded stores (eg Epic Games Store, Amazon)
simonh 6y ago
Games consoles platform owners controlling access to their platforms to third party software predate the internet by decades. There is nothing whatever new about the model of commercially licensing access to a platform to software vendors, it’s almost as old as the consumer computer industry.

grezql 6y ago

whats more interesting is how much Apple paid for this report.

martimarkov 6y ago
I don’t see how that is more interesting when the data in the report is accurate. So I don’t think they made stuff up in the report. The data is pretty much public.
- agustif 6y ago
  Data can both be accurate and biased... Who's footing the bill is relevant to the later
- RealStickman_ 6y ago
  If you torture the data long enough it will confess to anything.
  - kanobo 6y ago
    That's an excellent and funny way to say it, makes me chuckle, I will add it to my brain archive if you don't mind.
neximo64 6y ago
How much did they pay for this report? It doesn’t seem to mention that

Despegar 6y ago

I think this is mostly a response to David Cicilline's comment that Apple's 30% is "highway robbery" [1]. It compares it to other marketplace take rates showing that Apple's 30% isn't "highway robbery", but also that Apple does much more to earn their 30% than say GrubHub given that iOS apps rely heavily on Apple tools and technologies to create and distribute apps. [1] https://www.theverge.com/2020/6/18/21295778/apple-app-store-hey-email-fees-policies-antitrust-wwdc-2020 https://www.theverge.com/2020/6/18/21295778/apple-app-store-...

damnyou 6y ago
Do developers have a reasonable choice other than to use Apple tools? You can't even compile an iOS app on a server-class operating system and instead have to overpay for low-spec Macs for CI.
- Despegar 6y ago
  No, but the market wouldn't even exist if not for Apple creating it. iOS apps by its nature depend on Apple's technology. It isn't the same as restaurants or hotels that acquire customers through GrubHub or Booking.
  - damnyou 6y ago
    I'm pretty sure if Apple hadn't created the modern smartphone someone else would have, and they'd probably have been less controlling and overall better than Apple too. The structural conditions for smartphones existed, Apple (and Google) just happened to be in the right place at the right time.
    - simonh 6y ago
      I don’t see why that matters. Outside health and safety or merchantability, do we really want anyone dictating what features software can or cannot have, and how they may or may not be implemented? There is no requirement on Apple, or any other manufacturer to have an App Store at all, or to facilitate the installation of software from potentially competing firms, or any regulations requiring how they may or may not go about doing it. It’s not obvious to me that’s a route we really need to go down.

PaulHoule 6y ago

When you're comparing your client to Ticketmaster you are in trouble. You're out of touch: go work for a politician that needs a few Mooks.

mthoms 6y ago
Exactly. They also managed to compare themselves (favorably) to high end auction houses like Christies. What a bizarre comparison.

supernova87a 6y ago

Hacker News readers are a pretty biased sample of people -- they generally have direct interests in lowering commissions paid because they run businesses paying such commissions. And advocating that any platform provider is a monopoly restricting free exercise of selling goods. Often, the arguments will be phrased in terms of "should" or "fair" or "can't". But this is the oldest position in the book and is a fight that comes naturally with commercial activity -- everyone wants to not have a middleman, and fight against it. The question is, are you entitled legally to have some certain % charged to you? As a matter of "fairness"? Is a platform that controls access to a fraction of mobile device software sales an exclusionary monopoly? Has that prevented you from selling software elsewhere, or exercising your trade as a programmer? I personally (and I have no financial interests either way) think the issue is not as principled as some people make it out to be.

jedimind 6y ago
> Hacker News readers are a pretty biased sample of people That's a vacuous statement. Is anyone working at Apple or benefiting from Apple's monopolies any less biased? The essential question is rather if such behavior is fundamentally anti competitive and contrary to the spirit of the law. Why was Microsoft's installing Internet Explorer on their own OS a cardinal sin worthy of punishment, while Apple is getting away with behavior far worse than Microsoft's, yet it goes unpunished, so they get encouraged to behave even worse. I guess it's all about proper lobbying nowadays.
- supernova87a 6y ago
  As a consumer of mobile apps, I'm generally farther removed from the argument, and not going to benefit from the decision either way. Are you going to be charging me less if Apple gave a discount on your app commissions? App developers are highly likely to claim that the platform is monopolistic because they would benefit from such a decision. And argue from a "principle" point of view, when really all it is is a price dispute.
  - jedimind 6y ago

t0ughcritic 6y ago

The anti trust case can’t come soon enough. Apple is definitely taking advantage of its position, the fact that they also ‘help’ developers remove many reviews where users complain of price proves that costs are pushed to end users which is not good.they get them deleted so there is no evidence for anyone to say it’s a problem. Well played.