4 ms·

Is it fair to call Apple's platform rent-seeking? I think a 30% cut is certainly far too much but I wouldn't call it rent-seeking. The platform itself provides

Is it fair to call Apple's platform rent-seeking? I think a 30% cut is certainly far too much but I wouldn't call it rent-seeking. The platform itself provides a lot of value and they are entitled to charge something for it.

nolok 5y ago
The problem is that if Apples' services have a price, then they should price it out, like any provider. "Here's the price to have your app in the store, here is the one for one download, here is the one for an update". Having a blanket "buffet" pricing (sub is 1€ or 100€ ? Doesn't matter it's a set % you owe us !), making it illegal to let the user get the app another way, making it impossible for them to not pay through Apple (and then pay back Apple what you we them for the service you use) is why they're going to lose.
norswap 5y ago
One might argue they already capture the value in the phone's price. Their hardware might be good, but if they switched to android overnight, iPhone sales would plummet. It's clear many companies think the 30% cut is too high, but giving up on Apple means giving up on 45% of the highly-lucrative US market. This means Apple is able to use its dominant position to squeeze the margin of other companies via the too-high 30% fee. A clear monopolistic practice. As for the value-add (since rent-seeking is about charging without value-add) — it's smaller than you think. Contrast with Android, where you can at least install the app without going through the official App store. Apple's is simply charging for gatekeeping the access to its market (Google would like to do this too but historically hasn't bee in a position to do it as effectively).
oliwarner 5y ago
Is it fair? Yes. The cost to Apple is largely flat. A free app costs as much to host per user as a paid one, and both arguably cost less than a service client like Spotify. And what does Apple add? I hope the outcome of this is the dissolution of "free" distribution. It's not free, it's sending and revenue to Apple and Google, and the balance is (more than) paid off by paid apps. Flat fees for everyone, pay a cent or so per user per year. It's up to you to make that work.
Method-X 5y ago
I agree. There is a lot of value in discovery. Just being on the App Store puts software in front of peoples eyeballs who otherwise may not ever know it exists. Is discovery worth 30%? I honestly don't know, but it's worth something.
- AlexandrB 5y ago
  Unless you're big enough to get featured, App Store discovery is pretty bad. Search has always been spotty and has not improved much. Meanwhile, if you want to associate your app with a keyword you can pay Apple (again) for iAds. This sometimes leads to competitors shoving their way to the top of the search screen when you're searching for a specific app name. Something that's pretty infuriating for me as a customer looking for a specific app.
  - Method-X 5y ago
    Good point, I stand corrected.
sneak 5y ago
They charge for it in the developer program membership fee already; that is all you have to pay to distribute free apps. Everything else is just for payment processing, at 10x markup over market rates. Ten times!

nolok 5y ago

The problem is that if Apples' services have a price, then they should price it out, like any provider. "Here's the price to have your app in the store, here is the one for one download, here is the one for an update". Having a blanket "buffet" pricing (sub is 1€ or 100€ ? Doesn't matter it's a set % you owe us !), making it illegal to let the user get the app another way, making it impossible for them to not pay through Apple (and then pay back Apple what you we them for the service you use) is why they're going to lose.

norswap 5y ago

One might argue they already capture the value in the phone's price. Their hardware might be good, but if they switched to android overnight, iPhone sales would plummet. It's clear many companies think the 30% cut is too high, but giving up on Apple means giving up on 45% of the highly-lucrative US market. This means Apple is able to use its dominant position to squeeze the margin of other companies via the too-high 30% fee. A clear monopolistic practice. As for the value-add (since rent-seeking is about charging without value-add) — it's smaller than you think. Contrast with Android, where you can at least install the app without going through the official App store. Apple's is simply charging for gatekeeping the access to its market (Google would like to do this too but historically hasn't bee in a position to do it as effectively).

oliwarner 5y ago

Is it fair? Yes. The cost to Apple is largely flat. A free app costs as much to host per user as a paid one, and both arguably cost less than a service client like Spotify. And what does Apple add? I hope the outcome of this is the dissolution of "free" distribution. It's not free, it's sending and revenue to Apple and Google, and the balance is (more than) paid off by paid apps. Flat fees for everyone, pay a cent or so per user per year. It's up to you to make that work.

Method-X 5y ago

I agree. There is a lot of value in discovery. Just being on the App Store puts software in front of peoples eyeballs who otherwise may not ever know it exists. Is discovery worth 30%? I honestly don't know, but it's worth something.

AlexandrB 5y ago
Unless you're big enough to get featured, App Store discovery is pretty bad. Search has always been spotty and has not improved much. Meanwhile, if you want to associate your app with a keyword you can pay Apple (again) for iAds. This sometimes leads to competitors shoving their way to the top of the search screen when you're searching for a specific app name. Something that's pretty infuriating for me as a customer looking for a specific app.
- Method-X 5y ago
  Good point, I stand corrected.

sneak 5y ago

They charge for it in the developer program membership fee already; that is all you have to pay to distribute free apps. Everything else is just for payment processing, at 10x markup over market rates. Ten times!