5 ms·

All these legal battles have me thinking: what is the appropriate amount for someone like apple to charge developers using their app store? It's clearly not 0%

All these legal battles have me thinking: what is the appropriate amount for someone like apple to charge developers using their app store? It's clearly not 0% since Apple is incurring lots of costs and providing very real benefits for the developers on the platform, but also 30% seems so high that it's hard to justify

sorenjan 2y ago
Epic charges 12% on their store.
maxsilver 2y ago
Something like ~6% feels "fair" (where "fair" means, is equal to the approximate value provided). Apple isn't really incurring any costs for this. They don't make any of the content, they don't write any of the software, they do host the 'applications', but they only deliver the tiniest parts of the app (they host a small binary, but they aren't hosting the videos on Netflix or YouTube, for example, or the major assets in an MMO game or such) and a lot of the labor they do "provide" isn't necessarily valuable (their "review" of the apps, for example). The 30% figure seems to be pulled from gaming console markets, but it was never really justified over there either, and the previous economics that made it work (like subsidized hardware) never applied to Apple's ecosystem. (iPads aren't like, $99 each, and priced at that point, with the expectation that Apple will 'make it up' via the 30% tax on app store sales, the way consoles once were)
- dialup_sounds 2y ago
  The value being fought over here is distribution. For Epic this is almost entirely about Fortnite, where they're making ~$5 billion a year selling skins and emotes to children while not being in App Store or Google Play. Epic wants the millions of users and IAP they would get by being on these platforms but they want to pay 0% to the platforms for it.
  - spywaregorilla 2y ago
    Which is completely fair because Apple does not "own" those users.
    - dialup_sounds 2y ago
      If I want to run a television ad during the Super Bowl it should cost $0 because the network doesn't own the audience, right? Of course not. That's why the ask has always been a percentage reflecting the economic value to the developer created by the platform, which is surely non-zero.
      - FireBeyond 2y ago
        That's a specious example. If I'm showing your Super Bowl ad, I can't show anyone else's at the same time. Having one app available by a means doesn't make others unavailable. And even then - the Super Bowl ad pricing is directly correlated to the number of users that ad will be delivered to. All of that becomes even more emphasized if there's an alternate app store experience.
        dialup_sounds 2y ago
        the Super Bowl ad pricing is directly correlated to the number of users that ad will be delivered to Correct. The value is in the audience reach, not the opportunity cost of not being able to show another ad. Epic stands to make billions from the audience reach of these platforms, but when it comes to paying for that reach it somehow computes the value to be zero. That's some Hollywood accounting.
        spywaregorilla 2y ago
        "Hollywood Accounting" refers to exaggerating losses on items so as to avoid paying dues on profits and is completely irrelevant to this situation. The "App Store" is a platform that offers reach in distribution channels. The Epic Games store is a platform that offers reach in distribution channels. The iphone is not. If you buy software through the epic games store, then apple gets nothing but a middle finger.
blackeyeblitzar 2y ago
The appropriate amount is 0%. They are not allowing alternate app stores, or allowing users to freely download apps from the Internet. The devices are locked down. Because there is a monopolistic barrier against competition, their profit margin should be reduced to 0% just like in perfect competition.
COGlory 2y ago
This is very simple: 1) Apple should be able to charge as much as they want to use their app store. Even 100%!! 2) You should be allowed to install other app stores on the device you own, over which Apple has no control. Anything else is a half measure.
- iotku 2y ago
  I'd probably flip the order, but to a certain extent I don't disagree. In theory, if there's a truely competitive market (has such a thijg evwr actually existed for anything?) it shouldn't matter what a particular store charges as any other store could come in and charge a lower percentage and provide a 'better' service. That can't happen without very open access to alternative app stores though. In an idealized enviornment whoever could provide the best app store for the least amount of overhead and fees would be successful. That said there's something about defaults and the many year headstart Apple has had with their own app store which makes me skeptical that even in a completely open environment that there could ever realistically be a mass alternative for everyone and expecting the average user to care about developer fees they don't understand is a hard sell.
  - bloppe 2y ago
    Even if Apple manages to keep 99% of all transactions, simply having open competition will open the door to all sorts of improvements. You could decouple distribution from payment processing. Have an "app store" with only free apps, but they can have in-app purchases if they handle their own payment processing. This is basically just a CDN. We already have a very mature and open market for CDNs, and they're very cheap. We also already have a mature, slightly less open market for payment processors. Stripe charges about 3% and provides almost all the features the App Store provides for 10x bigger fees. The one feature most people would probably miss is centralized subscription management, but there would be nothing stopping Stripe (or someone else) from offering the exact same basic feature, charging way less than Apple, and still making a huge profit for themselves
- jocoda 2y ago
  It's clear that you do not own your device. It comes with limitations that tbf were agreed to upfront. For mobile, there is no real choice. Devil 1 is apple, devil 2 is google. Imo, Apple should be allowed to charge what they want - I'm ok with that as long as I can sidestep their thrall and sideload whatever I choose at no cost. If I get burned, that's on me. I think their costs in running the AppStore are the cost of doing business. They need this for their product. Without it, the product is nothing. And they get to suck 30% out of everything. Got to admire that. Better would be a replacement OS but is that even possible?
willcipriano 2y ago
I feel like if you get 30% of a deal you should be a valid target in a lawsuit about that deal. Scam app steals your bitcoin? Apple is on the hook if they want to get the middle of it like that. They can sue their business partner to recover. Something smaller, like under 5%, close to the cost of providing the service, would be more like a "finders fee" on the other hand shouldn't have such a duty.
basiccalendar74 2y ago
credit card processors charge around 3%

sorenjan 2y ago

Epic charges 12% on their store.

maxsilver 2y ago

Something like ~6% feels "fair" (where "fair" means, is equal to the approximate value provided). Apple isn't really incurring any costs for this. They don't make any of the content, they don't write any of the software, they do host the 'applications', but they only deliver the tiniest parts of the app (they host a small binary, but they aren't hosting the videos on Netflix or YouTube, for example, or the major assets in an MMO game or such) and a lot of the labor they do "provide" isn't necessarily valuable (their "review" of the apps, for example). The 30% figure seems to be pulled from gaming console markets, but it was never really justified over there either, and the previous economics that made it work (like subsidized hardware) never applied to Apple's ecosystem. (iPads aren't like, $99 each, and priced at that point, with the expectation that Apple will 'make it up' via the 30% tax on app store sales, the way consoles once were)

dialup_sounds 2y ago
The value being fought over here is distribution. For Epic this is almost entirely about Fortnite, where they're making ~$5 billion a year selling skins and emotes to children while not being in App Store or Google Play. Epic wants the millions of users and IAP they would get by being on these platforms but they want to pay 0% to the platforms for it.
- spywaregorilla 2y ago
  Which is completely fair because Apple does not "own" those users.
  - dialup_sounds 2y ago
    If I want to run a television ad during the Super Bowl it should cost $0 because the network doesn't own the audience, right? Of course not. That's why the ask has always been a percentage reflecting the economic value to the developer created by the platform, which is surely non-zero.
    - FireBeyond 2y ago
      That's a specious example. If I'm showing your Super Bowl ad, I can't show anyone else's at the same time. Having one app available by a means doesn't make others unavailable. And even then - the Super Bowl ad pricing is directly correlated to the number of users that ad will be delivered to. All of that becomes even more emphasized if there's an alternate app store experience.
      - dialup_sounds 2y ago
        the Super Bowl ad pricing is directly correlated to the number of users that ad will be delivered to Correct. The value is in the audience reach, not the opportunity cost of not being able to show another ad. Epic stands to make billions from the audience reach of these platforms, but when it comes to paying for that reach it somehow computes the value to be zero. That's some Hollywood accounting.
        spywaregorilla 2y ago
        "Hollywood Accounting" refers to exaggerating losses on items so as to avoid paying dues on profits and is completely irrelevant to this situation. The "App Store" is a platform that offers reach in distribution channels. The Epic Games store is a platform that offers reach in distribution channels. The iphone is not. If you buy software through the epic games store, then apple gets nothing but a middle finger.

blackeyeblitzar 2y ago

The appropriate amount is 0%. They are not allowing alternate app stores, or allowing users to freely download apps from the Internet. The devices are locked down. Because there is a monopolistic barrier against competition, their profit margin should be reduced to 0% just like in perfect competition.

COGlory 2y ago

This is very simple: 1) Apple should be able to charge as much as they want to use their app store. Even 100%!! 2) You should be allowed to install other app stores on the device you own, over which Apple has no control. Anything else is a half measure.

iotku 2y ago
I'd probably flip the order, but to a certain extent I don't disagree. In theory, if there's a truely competitive market (has such a thijg evwr actually existed for anything?) it shouldn't matter what a particular store charges as any other store could come in and charge a lower percentage and provide a 'better' service. That can't happen without very open access to alternative app stores though. In an idealized enviornment whoever could provide the best app store for the least amount of overhead and fees would be successful. That said there's something about defaults and the many year headstart Apple has had with their own app store which makes me skeptical that even in a completely open environment that there could ever realistically be a mass alternative for everyone and expecting the average user to care about developer fees they don't understand is a hard sell.
- bloppe 2y ago
  Even if Apple manages to keep 99% of all transactions, simply having open competition will open the door to all sorts of improvements. You could decouple distribution from payment processing. Have an "app store" with only free apps, but they can have in-app purchases if they handle their own payment processing. This is basically just a CDN. We already have a very mature and open market for CDNs, and they're very cheap. We also already have a mature, slightly less open market for payment processors. Stripe charges about 3% and provides almost all the features the App Store provides for 10x bigger fees. The one feature most people would probably miss is centralized subscription management, but there would be nothing stopping Stripe (or someone else) from offering the exact same basic feature, charging way less than Apple, and still making a huge profit for themselves
jocoda 2y ago
It's clear that you do not own your device. It comes with limitations that tbf were agreed to upfront. For mobile, there is no real choice. Devil 1 is apple, devil 2 is google. Imo, Apple should be allowed to charge what they want - I'm ok with that as long as I can sidestep their thrall and sideload whatever I choose at no cost. If I get burned, that's on me. I think their costs in running the AppStore are the cost of doing business. They need this for their product. Without it, the product is nothing. And they get to suck 30% out of everything. Got to admire that. Better would be a replacement OS but is that even possible?

willcipriano 2y ago

I feel like if you get 30% of a deal you should be a valid target in a lawsuit about that deal. Scam app steals your bitcoin? Apple is on the hook if they want to get the middle of it like that. They can sue their business partner to recover. Something smaller, like under 5%, close to the cost of providing the service, would be more like a "finders fee" on the other hand shouldn't have such a duty.

basiccalendar74 2y ago

credit card processors charge around 3%