You earn more you pay more taxes. That is how it works the world over. That is Apple's compromise to make it better for startups and small businesses. There is no downside to this. You are ether so big you pay the industry standard rate or you are small enough you get a bigger share. 30% was already far better terms than the EPIC game store, retail, and everything else before the AppStore.
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Apple Drops App Store Fees to 15% for All Developers Making Under $1 Million From App Store
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You earn more you pay more taxes. That is how it works the world over. That is Apple's compromise to make it better for startups and small businesses. There is no downside to this. You are ether so big you pay the industry standard rate or you are small enough you get a bigger share. 30% was already far better terms than the EPIC game store, retail, and everything else before the AppStore.
It would help to read the article rather than the groupthink of people who didn't read the article or press release.
Apple: "Developers can qualify for the program and a reduced, 15 percent commission if they earned up to $1 million in proceeds during the previous calendar year."
So no. Not everyone. It makes no sense to you, but that doesn't make your interpretation correct.
Humble shareholder here. I LOVE IT. It hurts Epic's case (and maybe Epic will cave; I miss Fortnite), smaller developers save more cash unless and until they're really successful, and Apple re-energizes developer enthusiasm.
I would have preferred it if it were a tax bracket kind of thing though. All developers pay 15% up to $1m and then 30% after it, starting every year. That way it's easier to calculate and success isn't directly punished. (although the passel of free app offerings at the end of the year from developers trying to stay under seven figures might be nice)
How so? It's still in the developers best interest to make as much as possible; I did not read the artickle as implying Apple takes an extra 15% as soon as you pass one mullion in sales.
When did the DOJ say that; all I could find was a developer that made that statement, not the DOJ?
What tax? Are you talking about the pejorative slang term for the revenue sharing agreement, as in “Apple tax”? Or are you talking about actual taxes devs have to pay to their appropriate taxing authority?
You seem confused, but props for throwing around “sovereignty issue” lol. Impressive 🙂
The other guy is right here even if he's saying it in a mad way. if what you were saying is correct, it'd just be the case that the progressive 15% under $1m/30% over $1m system applied to everyone.
But that isn't what's described. What it says is that if you go over the $1m barrier, you pay 30% from that point on, not on previous earners. If you go back under $1m, you qualify for the 15% rate again. But those earning over $1m pay 30% on everything.
Again, I'm assuming that can't be right. But that is what it says the system is. "Developers who earn over $1 million will not be eligible." So, as described, you have a system where someone earning $1m and one dollar is paying $300k to Apple, while someone earning $999k is paying just $150k to Apple.
This can't be right. But that's what the MR article says and what other sources are backing up here.
@Maximara and yourself are forgetting that those who qualify for this in the first year (or subsequent years) will only be paying 15% commission in 2021, so the math is different for them... post-commission earnings of $1m (or "proceeds" as apple call them in the press release) would come from $1,176,470. It's an extra $176k in the dev's pocket.
The $1,428,571 figure is still relevant in terms of deciding eligibility for the next year for devs who are not currently eligible, since their proceeds would be just under $1m.
That then raises the conundrum of the dev who sits at $1.3m sales every year and flip flops in and out of the program...
I don't think they said they've only doing it for smaller devs. I also seem to remember (but could be wrong) that they also wanted alternative installation methods outside of going through the app store, so I'm sure they'll still have something to keep fighting over. This seems to be more of a move on Apple's part to prevent stricter govt regulation.
Nope. Then they couldn't screw Epic, which is exactly who deserves to be screwed.
DHH like others complaining all seem to be developers earning millions or billions and not wanting to pay a penny for it.
Their whole thing is about getting the EPIC game store on Android and iOS, it is in their court filings. It was never about the cut.
If you earn under $1m then you are fine and will be for a while. Once you pass that you are expected to be on 2m pretty quickly. Very few will sit right on $1 over the threshold. As a business you would plan for how to turn that $1m into $1.5 so you are still earning more.
Here's an example I'm thinking of. Can this be right? Really hurts those companies right on the small/medium border:
2020 - $990,000 - You qualify for the 15% for next year
2021 - $1,010,000 - You pay 15% of that $1m, then 30% of the $10,000 = $153,000 commision commision to Apple and you net $857,000
2022 - $1,030,000 - Because you exceeded $1m in 2021 you no longer quality, so pay full 30% = $309,000 commision to Apple and you net $721,000
2020 - $990,000 - You qualify for the 15% for next year
2021 - $1,010,000 - You pay 15% of that $1m, then 30% of the $10,000 = $153,000 commision commision to Apple and you net $857,000
2022 - $1,030,000 - Because you exceeded $1m in 2021 you no longer quality, so pay full 30% = $309,000 commision to Apple and you net $721,000
You mean like Spotify, Netflix, and all the other big companies that Apple allows not to pay a commission? Or what about Facebook and other companies that have the most popular downloads that don’t pay Apple anything because their app is free? If Apple allowed developers the option to offer their own IAP most of these developers would go quiet. I can go to Safari and sign up for Spotify or Netflix or buy a book from Amazon but I can’t do it in-app because somehow magically once I’m in an app then Apple deserves 30% of that transaction?
It’s comments like this that make me wish Apple wasn’t so quick to bow to public pressure sometimes. The whole “given em an inch and they want a yard” adage and all.
I continue to maintain that the iOS App Store holds a lot more value than simply being a payment processor. Apple has aggregated the best customers under one roof, which any developer can access simply by creating an app for the iOS platform. They have also put in the ground work into creating a trusted marketplace where customers are willing to spend more, which in turn serves to grow the whole pie and allow developers to earn more than if they had gone at it alone.
So if a developer made more than 1 million, he is no worse off than he previously was. If he made way less, good for him. He gets to bring home more money.
What I would like to see is if this results in lower app prices from the smaller app developers. One of the oft-parroted refrains is how Apple’s 30% cut results in higher prices for the consumer. Now that developers potentially get to keep more of their earnings, will they pass on some of this savings on to the customers, or choose to keep everything for themselves, thereby proving my point that app pricing has little to do with the 30% cut as it is largely demand-driven and has close to zero marginal costs?
Not sure what point you’re tying to make. Apple is still charging 30% (over one million) to help keep the App Store running; including those who are making billions.
Apple is just reducing their margins and making a good will jester towards indie devs.
Everyone’s original argument of needing 30% to keep the store running still applies.
I hope not. 30% is a ridiculous cut and developers should be allowed to advertise deals outside of the app. And it’s a bigboys club; Amazon can sell Prime and other digital products through their app without paying 30% to Apple.
This is great, no doubt, but the dev fee has always reduced to 15% after the first year, although the media and competitors repeatedly ignored that fact. But yeah, for new apps this is super!
At Apple, Steve Jobs has built a great reputation for developing the product to become better over time and create a better incentive so the developer will try to make even more impressive applications for the platform.
Tim Cook? Those products felt very incremental and not even close to being extraordinary. 😇
Morally, the right incentive is for the developer who work harder to generate more sales revenue will not be paying a higher fee 👌🏻
