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Apple to Collect 27% Commission on Third-Party App Payment Systems in the Netherlands
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I see it similar & have proposed it to Tim Cook & Apple numerous times in the past, where Apple's Marketing is used as the key decision factor.
Specifically, if Apple recommended OR promoted your app, then Apple's cut is justified.
But, if Apple never recommended your app, their cut should be set @ ZERO !
And, here's the kicker, if your app had been in the App Store for three years BEFORE Apple recommended it, that App is entitled to a half-rate from the time Apple BEGINS TO recommend OR promote it for three years.
It's that last part that I think Apple doesn't like.
Anyway, it provides incentive for Apple to get its act together WRT recommending OR promoting the best apps, NOT simply the ones hand-picked by Tim, Phil, & Matt, & labeled "Editors Choice," which is, IMO, precisely what they do now !
Along that line, I personally do NOT believe Apple has any real so-called "App Store Editors" ... simply Tim, Phil, & Matt selecting Apps based-upon Marketing, NOT technology, & certainly NOT innovation.
The team of Tim, Phil, & Matt, outside of Game Apps, Apps for Little Kids, & Streaming Media Sub Apps, gets an F-- grade from this App Developer !
The other categories of the App Store will blossom ONLY AFTER Tim, Phil, & Matt, are completely removed from the picture !
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I don't smoke either, but it may not necessarily stop me from being a victim of second-hand smoke.
I may not care for an app that needs to be side loaded if I don't use it, but what happens if say, Facebook decides that WhatsApp is popular enough that they can afford to pull the app from the App Store and get users to install it from say, the Facebook App Store, while stuffing it full of trackers that would otherwise have never passed muster in the iOS App Store?
Likewise, a side loaded app presumably wouldn't need to support features like ATT or Sign In with Apple, resulting in less choice for me, the end user.
So to me, whether a system is open or closed is immaterial; what matters is that being open / closed ultimately means for me as the end user.
Take this article on sales of the monument valley app for example. We see that majority of sales come from iOS (80%), while only 5% of android users actually paid for it (meaning 95% of android users pirated the app, compared to 40% on iOS).
Guess who bought more copies of Monument Valley: iOS or Android gamers?
London-based developer Ustwo has revealed all on Monument Valley's sales and budget, in a fancy infographic. We now know that the game shifted 2.4 million copies, though the game was downloaded onto more than 10 million devices due to downloads onto multiple d...
[Update] Ustwo: 95 percent of Android players didn't pay for Monument Valley
Updated on January 7th, at 10:12: Whoops, we mistakenly quoted Butterscotch Shenanigans as saying it saw a five percent piracy rate on iOS. The actual number is 50. Updated story follows… Monument Valley creator Ustwo has revealed that its innovative puzzler...
I like to see things more as cause and effect, and we already have a pretty good idea of what side loading would look like thanks to the google play store. It's not as lucrative, and Google pays less attention to it as a result. Everything on iOS is interconnected. We get good things on the iOS App Store because Apple has aggregated the best customers (thanks to the iPhone), who have a higher propensity to spend because of the security of iTunes, the ease afforded by biometric payments, and people generally having to actually purchase apps because piracy is flat out harder on iOS (in part because it's so difficult to side load third party apps). It's a virtuous cycle that works because every stakeholder, from Apple to customer to developer, plays their part and pays their share.
And the only reason why developers want to use third party payments is so they don't have to pay Apple their 30% (or 15%), while continuing to ride on the App Store infrastructure for free. That's really all there is to it.
Given the choice, I would prefer to continue getting all my apps from within the iOS App Store, and this only works if the apps stay in the App Store, and one way of ensuring this is to make sure that developers have no where else to go.
So I disagree that side loading will have zero impact on people who don't plan on using said feature. Everything is interconnected, for better and for worse.
I’m going to let the ip specialists and lawyers figure this out.
Who is to say they shouldn’t? Why should Costco get a cut out of products they sell but didn’t manufacture?
I am just surprised that it took this long for Apple to come up with this 27%. Even at 27%, Apple is losing as now Apple will have to spend that much more in RD to secure its SF & HD from possible security breaches and attacks. I hope the app store will show which app offers alternate payment methods - So that I know what NOT to download.
Apple says it will take 27% commission on purchases made in dating apps through third-party payment options in the Netherlands, in compliance with a Dutch regulatory ruling.
In an update on its developer support site, Apple said it would collect 27% commission instead of its usual 30% on transactions made in dating apps that use alternative payment methods. Apple says the decreased commission excludes the value for collection and remittance of taxes that the company carries out.
The details follow Apple's announcement last month that it will comply with a Netherlands Authority for Consumers and Markets (ACM) ruling that compels the company to allow third-party payment services to pay for in-app purchases in dating apps.
Apple has warned that it will not be directly aware of purchases made using alternative methods, and will not be able to assist users with refunds, purchase history, subscription management, and other issues that it usually takes care of as part of its own in-app payments system.
As a result, developers who use the new entitlements will have to take on these additional responsibilities, and will be required to provide Apple with a monthly record of each sale of digital goods and content through the App Store within 15 calendar days of the end of Apple's fiscal month.
Apple's concessions came following a December ruling from the ACM that, by restricting dating apps from using third-party payment methods, Apple is engaging in an "abuse of market power." The ACM threatened to fine Apple up to a maximum of 50 million euros per week ($57 million) if it did not allow dating apps to offer alternative payment options.
Despite agreeing to offer the entitlements, Apple is still appealing the ACM ruling, which it argues is not in the best interests of App Store users. Apple says it is "concerned these changes could compromise the user experience, and create new threats to user privacy and data security."
Article Link: Apple to Collect 27% Commission on Third-Party App Payment Systems in the Netherlands
I think your comment was too deep to follow, the other person likely will not get it. ???
Ah ha ha ha… you are right, my error, Apple likely did the math and know it is enough. ?Oh yes.
“Apple is losing”
Your maths are fine if using gross income as the base but I’m not convinced that’s where it should start.My napkin math made a few years ago suggested that Apple needs to charge around 20% to break even.
Minnesota and Arizona Bills Aim to Let Developers Skirt Apple's In-App Purchase Rules
Here's my thinking. App Store profits is derived from two areas. The cost of running the App Store (which doesn't change, because the number of developers is assumed to be fairly constant), and the revenue from games and IAPs (which is variable in nature). We also know that about 85% of...forums.macrumors.com
Granted, it's totally my own estimates, so make of it what you will.
At least you substantiated your workings, though. So fair play to you for that.
How many third-party App Developers does Apple claim they have ?
Take that number & multiply by $10 USD.
That gets, IMO, Apple's budget for running the App Store.
So, 1/10th of what they charge third-party App Developers on an annual basis.
I see NO part of Apple's 30% cut being needed to run the App Stores around the world !
I've been monitoring the U.S. App Store daily for well over a year, & I'd say Apple probably ONLY has 2-3 people running it here in the States; mostly for the today Tab of their App Store App.
I'm naturally NOT including their App Review Team in this assessment; for that, take another $10 from each App Developers' annual fee.
Take that number & multiply by $10 USD.
That gets, IMO, Apple's budget for running the App Store.
So, 1/10th of what they charge third-party App Developers on an annual basis.
I see NO part of Apple's 30% cut being needed to run the App Stores around the world !
I've been monitoring the U.S. App Store daily for well over a year, & I'd say Apple probably ONLY has 2-3 people running it here in the States; mostly for the today Tab of their App Store App.
I'm naturally NOT including their App Review Team in this assessment; for that, take another $10 from each App Developers' annual fee.
I found this post from a user on AppleInsider:
Folks who thought the 30% commission is merely for collecting and processing payment are now learning the truth. Only 3% of that commission was related to payment processing. The other 27% is an implicit agreement that covers Apple’s costs of maintaining all the infrastructure and technology, but also access to users.
People somehow believed that by putting their apps in the App Store priced as free grandfathered them into to free access to Apple’s user base thereafter. They figure that since they were granted access to that user base for no charge that they could later, via in-app purchases, exploit that free access they believe they were granted. But that was never the deal. The deal is more like, you pay a commission whenever you sell to the Apple user base, even if that day doesn’t come immediately upon downloading your app. This is fair because there’s a lot of value in being granted access to such a huge user base that the developers didn’t have to build themselves.
Maybe now the conversation can become more rational, now that people are being shown a glimpse under the hood as to how much of the commission applies to each component of value Apple provides.
Folks who thought the 30% commission is merely for collecting and processing payment are now learning the truth. Only 3% of that commission was related to payment processing. The other 27% is an implicit agreement that covers Apple’s costs of maintaining all the infrastructure and technology, but also access to users.
People somehow believed that by putting their apps in the App Store priced as free grandfathered them into to free access to Apple’s user base thereafter. They figure that since they were granted access to that user base for no charge that they could later, via in-app purchases, exploit that free access they believe they were granted. But that was never the deal. The deal is more like, you pay a commission whenever you sell to the Apple user base, even if that day doesn’t come immediately upon downloading your app. This is fair because there’s a lot of value in being granted access to such a huge user base that the developers didn’t have to build themselves.
Maybe now the conversation can become more rational, now that people are being shown a glimpse under the hood as to how much of the commission applies to each component of value Apple provides.
Apple wants 27% commission for Dutch apps using third-party payments - iOS Discussions on AppleInsider Forums
It's only right.
forums.appleinsider.com
I feel it's common knowledge that Apple's 30% commission has always been about more than just payment processing. The critics just chose to bury their heads in the sand and act like the rest of the App Store doesn't cost any money to operate, or that Apple is somehow obligated to subsidise it using hardware profits.
It's also pretty apparent that the clamouring for use of third party payment options has always been more about allowing developers to circumvent this 30% commission, and less about giving users "choice". I already have the choice of what credit card I want to link to iTunes with, and I really don't need another option like PayPal or Stripe which does nothing to change the game.
It's open to debate about what a fair amount Apple should charge, but the moment lawmakers made it an all-or-nothing proposition (either 0 or 30%), which position did they think Apple would take?
This is mostly all Apple's fault
If they'd adjust to reasonable terms, at least for game apps, very little if any regulatory heat would be coming down on them.
They have no business dipping into IAP revenue (as one example)
The store is old and things have changed so much from first conception
Apple needs to also change (or will be forced to)
If they'd adjust to reasonable terms, at least for game apps, very little if any regulatory heat would be coming down on them.
They have no business dipping into IAP revenue (as one example)
The store is old and things have changed so much from first conception
Apple needs to also change (or will be forced to)
If it's apples' fault then they will pay. But nowhere on the face of this earth does a government tell a consumer oriented for profit organization: "you are going to provide your services for free". (and I'm not discussing warranty services, free learning classes, etc)
I would propose the opposite.
Waive the 30% altogether for non-gaming apps (since they make up only about 2% of overall App Store revenue), while continuing to charge 30% for games. Since the App Store is infested with freemium crap anyways, I doubt there is anyone here who would shed a tear over this. Heck, tax them 50% if possible!
I heard someone talking about Amazon Kindle books on another forum.
Amazon charges a 30% commission on ebooks priced between $2.99 and $9.99
And they charge a 65% (!) commission on ebooks priced below $2.99 and above $9.99
I guess that's why most Kindle ebooks are $9.99... that way the authors pays the smallest commission to Amazon.
You are allowed to sell your ebook on your own website and you don't have to pay a commission at all. But it then becomes a challenge to get people to download your ebook and manually transfer it to their device. Most people won't want the hassle. This is similar to the reason why sideloading on Android isn't very popular... it adds complexity.
So an author would be better off to sell their ebook in the giant Kindle store. It's easier.
And... the Kindle store has a huge audience. Your ebook is in front of millions of people in the Kindle store. So you can make the argument that Amazon's 30% commission is a fee to reach a wide audience.
Hmmm... that sounds familiar.
The App Store also has a huge audience. And it's easy for people to download and pay for apps. So I can see why Apple charges a commission.
Now... do I think 30% should be the commission on everything forever? Absolutely not. But Apple should be compensated for the service and value they are providing.
A couple comments have come in since I started typing this comment. I've heard that the App Store should change their terms, particularly for non-gaming apps. I support that.
I've also heard that the commission for recurring monthly subscriptions should be lowered as well.
Even though Apple already reduces their commission to 15% after the first year... that's still far too high in my opinion.
We know Apple is paying someone 3% to process credit cards. So I don't see why Apple needs 12% every time my credit card gets automatically charged every month. It's literally an automated computerized process. So I think recurring monthly subscription commissions need to be drastically reduced.
Anyway... sorry for the ramble. I got inspired by the Kindle 30% discussion.
Amazon charges a 30% commission on ebooks priced between $2.99 and $9.99
And they charge a 65% (!) commission on ebooks priced below $2.99 and above $9.99
I guess that's why most Kindle ebooks are $9.99... that way the authors pays the smallest commission to Amazon.
You are allowed to sell your ebook on your own website and you don't have to pay a commission at all. But it then becomes a challenge to get people to download your ebook and manually transfer it to their device. Most people won't want the hassle. This is similar to the reason why sideloading on Android isn't very popular... it adds complexity.
So an author would be better off to sell their ebook in the giant Kindle store. It's easier.
And... the Kindle store has a huge audience. Your ebook is in front of millions of people in the Kindle store. So you can make the argument that Amazon's 30% commission is a fee to reach a wide audience.
Hmmm... that sounds familiar.
The App Store also has a huge audience. And it's easy for people to download and pay for apps. So I can see why Apple charges a commission.
Now... do I think 30% should be the commission on everything forever? Absolutely not. But Apple should be compensated for the service and value they are providing.
A couple comments have come in since I started typing this comment. I've heard that the App Store should change their terms, particularly for non-gaming apps. I support that.
I've also heard that the commission for recurring monthly subscriptions should be lowered as well.
Even though Apple already reduces their commission to 15% after the first year... that's still far too high in my opinion.
We know Apple is paying someone 3% to process credit cards. So I don't see why Apple needs 12% every time my credit card gets automatically charged every month. It's literally an automated computerized process. So I think recurring monthly subscription commissions need to be drastically reduced.
Anyway... sorry for the ramble. I got inspired by the Kindle 30% discussion.
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I see it as the price Apple charges for their role on customer acquisition. For example, an app can either choose to charge you one lump sump or as an annual subscription. For example, Halide either lets you pay $70 as a one-time payment to unlock it or pay $17 a year (in Sing dollars; divide by 1.5 to get US pricing).
So I could either pay upfront (and Apple gets 30% or $21 right off the bat), or subscribe for as long as I use said app (and Apple gets 30% for the first year or $5, and $2.50 from the second year onwards). So I would need to remain a subscriber for at least 7 years to make it worthwhile in the latter case.
I do acknowledge that this is a separate case from say, Netflix where their business model is a steady stream of content in exchange for a monthly fee. I am in favour of Apple cutting their cut to say 5% from the third year onwards (basically to cover payment processing fees), but perhaps the issue comes in distinguishing between the two scenarios I illustrated above. A traditional subscription model vs an app breaking down a lump sum into multiple smaller payments.
Yeah I agree with the customer-acquisition argument. Apple should be compensated for connecting the customer and the app for the initial download and the first month's fee.
But since we know Apple's cost to provide credit card processing is 3%... and everything from month two and beyond is just automated swipes of the credit card each month... that's why I think the 30% or even 15% each month is a little high.
Apple's commission from each month is paying for app updates and app review... so I agree that Apple should get something each month. Don't get me wrong.
And I appreciate Apple lowering the monthly commission from 30% to 15% after the first year. That was nice.
But it should be lower than 15% and quicker than one year, in my opinion.
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I'd rather see lower commission fees than alternative payment systems. It's win-win for both developers and consumers, and apple really.