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Apple in 2011 Considered Collecting a 40% Fee From Some Subscription Apps
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It was a counter point to the idea that Apple set the standard to 30% and others followed.
Regardless, video games were a $21.3 billion market in 2008 where Sony/Microsoft/Nintendo sold millions of devices with the capability to download games from an online store. Not to mention Steam is 30% and they've been around since 2003. To say that it wasn't an industry standard until Apple set it it 30% would be inaccurate.
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my reasoning is that it would be a 33% increase over the industry standard.
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40% sounds good.
Anything that increases Apple's stock price is good.
Anything that increases Apple's stock price is good.
Why would you think increasing the first year subs from 30% to 40% would increase Apple’s stock price?
In any case, ime Apple is one of the least concerned with this/next quarter’s earnings that you’ll run into. Many companies are overly influenced by short term profits, at the expense of more-strategic decisions that may cause a temporary hit to the bottom line.
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Not sure that's an Apples to Apples comparison. Pretty sure you can buy from pretty much anywhere you like as far as Sony 'apps' are concerned.
Wow. The worst of apple's offerings are the services. Only within the last few years have they delivered. Never been impressed by Eddy's decision making.
The way I see it, you walk into a store and buy software off the shelf. You get more features (or maybe it can't even do anything) by subscribing to that service. Target, or Best Buy or Walmart or Amazon (retail) takes 0% of that subscription fee, and the store adds 0 value to the subscription. The App developer would have to use a service like Stripe to handle recurring billing and credit cards, but they only get charged a 3% or 5% fee, somewhere in that range, for the transactions.
Apple on the other hand, requires if you are to make an app, it must be distributed through their store. To be allowed in the store, if you do subscriptions - with few exceptions for large companies who they don't want to lose customers over, you must use Apple's services to handle your subscriptions. As such, instead of 3-5%, they charge you 30% for the exact same service as Stripe.... providing you no extra value. ... and their exceptions show Apple doesn't need it for any particular reason other than its a "free" revenue stream for them.
I most certainly hope they get taken to the woodshed on this issue. Apple doesn't need to stop charging 30% for subscriptions processed by Apple, they just need to give the developer the freedom to chose. That said, having worked with Stripe's APIs, it only takes a few hours to setup recurring payments. Very few developers would opt-in to Apple running their subscriptions if they had a choice. Which is exactly the point, its clearly anti-competitive. The only reason it exists in its current state is they refuse choice.
Its even worse if you are in a market that competes against Apple. Apple isn't paying 30% to process payments for their own subscriptions, at their scale they are paying under 3%. If you compete and want to operate on their platform, and don't fall under their exemptions (which are relatively new), then you were paying Apple a huge % of your sale, basically subsidizing their own services.
I realize investors want recurring revenue from subscriptions, but subscriptions for free over the air TV, toothbrushes, and heated seats in your car is getting ridiculous. I wish Apple would look for new hardware and software opportunities than raking their developers over the coals to squeeze every last dollar out of them.
Thats what happens when the bean counter takes over for a company that was ran by a product guy and listens more to wallstreet than the customers/vendors in their product ecosystems
Apple on the other hand, requires if you are to make an app, it must be distributed through their store. To be allowed in the store, if you do subscriptions - with few exceptions for large companies who they don't want to lose customers over, you must use Apple's services to handle your subscriptions. As such, instead of 3-5%, they charge you 30% for the exact same service as Stripe.... providing you no extra value. ... and their exceptions show Apple doesn't need it for any particular reason other than its a "free" revenue stream for them.
I most certainly hope they get taken to the woodshed on this issue. Apple doesn't need to stop charging 30% for subscriptions processed by Apple, they just need to give the developer the freedom to chose. That said, having worked with Stripe's APIs, it only takes a few hours to setup recurring payments. Very few developers would opt-in to Apple running their subscriptions if they had a choice. Which is exactly the point, its clearly anti-competitive. The only reason it exists in its current state is they refuse choice.
Its even worse if you are in a market that competes against Apple. Apple isn't paying 30% to process payments for their own subscriptions, at their scale they are paying under 3%. If you compete and want to operate on their platform, and don't fall under their exemptions (which are relatively new), then you were paying Apple a huge % of your sale, basically subsidizing their own services.
I realize investors want recurring revenue from subscriptions, but subscriptions for free over the air TV, toothbrushes, and heated seats in your car is getting ridiculous. I wish Apple would look for new hardware and software opportunities than raking their developers over the coals to squeeze every last dollar out of them.
Thats what happens when the bean counter takes over for a company that was ran by a product guy and listens more to wallstreet than the customers/vendors in their product ecosystems
I remember when the stores were working together to set fees and that came across as collusion, even if it wasn't.
At this point, they need to re-assess how much it costs them to:
Review the application
Test the software for incorrect behaviour
Provide storage for the software and downloadable content
Provide storage for public reviews
Add a small percentage to that, so that they make something for being good, and they can call it finished.
To me, they are still figuring it out as they go, all these many years later. They push the software or update out to the store, someone notices something, and they pull it. They should be catching problems, with the millions of apps, before the problems get to the public. That might be worth 30% but they're not doing that.
At this point, they need to re-assess how much it costs them to:
Review the application
Test the software for incorrect behaviour
Provide storage for the software and downloadable content
Provide storage for public reviews
Add a small percentage to that, so that they make something for being good, and they can call it finished.
To me, they are still figuring it out as they go, all these many years later. They push the software or update out to the store, someone notices something, and they pull it. They should be catching problems, with the millions of apps, before the problems get to the public. That might be worth 30% but they're not doing that.
"Industry standard" = planned economy and not market economy. Planned economy is/was found in China and former Soviet Union. It is obvious that the sound markets forces are not apparent in the tech industry. They point to each other but within their respective fiefdoms, which are country sized in terms of money by the way, there is no competition.
Apple is now all about the share holders.
Been like that for the last 7-8 years ever since the iphones caught on and their shares started going through the roof.
Now the most valuable company in the world...it's all about the bottom line.
We get the bill, as long as we stay with them that is.
Been like that for the last 7-8 years ever since the iphones caught on and their shares started going through the roof.
Now the most valuable company in the world...it's all about the bottom line.
We get the bill, as long as we stay with them that is.
Meaning... we should feel blessed that it's "only" 30% ?? ... would be a shame if there was money left on the table...
No. Xbox, Playstation, and Nintendo heavily compete against each other, yet their rates are 30/70.
Yeah, didn't think so.
1) I like that the guy corrected it...that's rare these days.
2) I LOVE the quote about lies traveling around the world while the truth puts on its shoes. So applicable to so many statements online these days.
It has nothing to do with 30 or 40. It has to do with choice of distribution channel. If there's no alternative way to distribute iPhone apps, then there's nothing that can force Apple's hand one way or the other. There's no competition. That's why it's called an anti-trust, anti-competitive practice.
There was a question in the trial about what was stopping them from 50%. Markets with healthy competition have a forcing function. Usually, that's a competing store or distribution mechanism. This could be, for example, app developers allowing you to install the app from their websites, or an email newsletter, or a Slack link, ... essentially a pull from their own servers. Remember, developers still have to properly sign the app (notarize through Apple certs) to run on the device, and Apple APIs should still prevent/minimize bad behavior. There's really no legitimacy to the malware argument.
The other thing was Apple's own apps having an advantage by calling private APIs, and getting better rankings in their own store. So developer could submit the next great new app idea, get hit by 30% while Apple copies it (calling private APIs with more power & access, fewer barriers), then get out-competed in the App Store as there's no way to distribute the apps anywhere else. That dev is always at a disadvantage revenue-wise and search ranking-wise. Tile has a point. If the only way to get their app is through the App Store, then nothing (right now) is preventing Apple from copying their app's core functionality, making a 1st party Apple version (*cough* Find My + Apple Tags *cough*), ranking it higher in the App Store (again, no competing store/distribution channel to provide choice or competition), and using more powerful private APIs to skirt things like asking for location permission, privacy opt-out, etc. Tile would get out-competed out of no fault of its own!
There was a question in the trial about what was stopping them from 50%. Markets with healthy competition have a forcing function. Usually, that's a competing store or distribution mechanism. This could be, for example, app developers allowing you to install the app from their websites, or an email newsletter, or a Slack link, ... essentially a pull from their own servers. Remember, developers still have to properly sign the app (notarize through Apple certs) to run on the device, and Apple APIs should still prevent/minimize bad behavior. There's really no legitimacy to the malware argument.
The other thing was Apple's own apps having an advantage by calling private APIs, and getting better rankings in their own store. So developer could submit the next great new app idea, get hit by 30% while Apple copies it (calling private APIs with more power & access, fewer barriers), then get out-competed in the App Store as there's no way to distribute the apps anywhere else. That dev is always at a disadvantage revenue-wise and search ranking-wise. Tile has a point. If the only way to get their app is through the App Store, then nothing (right now) is preventing Apple from copying their app's core functionality, making a 1st party Apple version (*cough* Find My + Apple Tags *cough*), ranking it higher in the App Store (again, no competing store/distribution channel to provide choice or competition), and using more powerful private APIs to skirt things like asking for location permission, privacy opt-out, etc. Tile would get out-competed out of no fault of its own!
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If you compare Apple to Stripe, then yeah the cut is ridiculous. However, you're not only paying for the payment service, you're paying for all of Apple's services they offer to developers. The entire business model is built around Apple providing very good tools for you as a developer to use for free. Those tools, however, aren't free. They obviously cost Apple money. So whenever you start earning money with your app, Apple takes a cut that goes towards paying for those tools (yes, obviously it also goes into the pockets of Apple's shareholders... it is a business after all).
The apps that make money on the app store, and subsequently pay a cut to Apple, are paying for all of the free apps on the app store to be free. It's not just for the payment.
I'm not saying the 30% cut is okay, but I do feel it's important that people know where that money is going and why Apple takes a cut in the first place.
Right?
Eddy Cue‘s “I think we‘re leaving money on the table” flies in the face of everyone justifying the rates as barely covering necessary costs, Cook‘s congressional whining included.
It's a negotiation maxim for a perceived boundary of when you cross over into taking more than the other person's cut when 50/50 would be absolutely ludicrous.