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Original poster
Apr 12, 2001
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App developers in the European Union who choose to opt in to Apple's new business terms must pay an €0.50 "Core Technology Fee" or CTF for every app install over one million installs, a model that has the potential to bankrupt free or freemium app developers.

app-store-fees-eu.jpg

Apple does not charge for the first one million "first annual installs" per iOS account each year, but after that, developers will begin racking up charges. A free or freemium app that goes "viral" and is downloaded more than one million times could be forced to pay astronomical fees, as demonstrated in estimates shared by developer Steve Troughton-Smith.


Under Apple's new business terms, a free or freemium app that gets two million annual "first installs" would need to pay an estimated $45,290 in fees per month according to Apple's fee calculator, or more than half a million dollars per year, even if no money is earned.

That's an unsustainable model for free apps, and freemium apps would need to be earning at least €0.50 per user to break even with the fee. A freemium app with thousands of installs from non-paying users could end up owing far more than is made. Developers will likely need to charge up front to ensure their apps make enough money to pay the CTF, as offering a free-to-download app could be risky if downloads exceed 1 million.

Free and freemium app developers can, however, choose to stick with Apple's current App Store business terms instead of opting for the new terms. In that situation, nothing would change, and app developers would continue to pay a 15 to 30 percent commission to Apple.

The €0.50 CTF applies to apps distributed both through the App Store and through alternative app stores if developers choose the new business terms. With the App Store, developers are charged the €0.50 fee and must pay a 10 to 17 percent commission to Apple. With an alternative app store, there is no commission. Fees can be estimated for the existing terms and the new terms through a dedicated calculator that Apple has provided to developers.

Here's a breakdown of the available options:
  • Current App Store Agreement - Developers pay Apple a 15 to 30 percent commission. Under one million in revenue is a 15 percent commission through the App Store Small Business Program, over $1 million results in a 30 percent commission. Subscriptions require a 30 percent commission for the first year, and a 15 percent commission for the second year and beyond.
  • New terms, App Store distribution - Commission drops to 17 percent from 30 percent, and 10 percent from 15 percent. There is an additional fee of 3 percent for using Apple's payment system, so the commission would be between 13 and 20 percent for a developer that opts for the new rules and uses in-app purchases. The 3 percent fee does not apply for developers who use alternative payment systems. Developers must also pay €0.50 per app install per user each year after 1 million app installs.
  • New terms, alternative app store distribution - No commission, but developers must pay €0.50 per app install per user annually after 1 million app installs.
According to Apple, the CTF is applied for the first annual install, which is the first time an app is installed by an account in the EU in a 12-month period. After the first annual install, the app can be installed any number of times by the same account for the next 12 months with no charge.

Apple is waiving the fee for nonprofit organizations, accredited educational institutions, and government entities that are approved for a fee waiver.

Apple's Core Technology Fee could also be prohibitively expensive for apps like Spotify that have millions of users. An app that makes $10 million in sales through the App Store with 10 million "first installs" (aka, a 0.99 price) will need to pay Apple over $500k per month.


The EU app ecosystem changes are included in iOS 17.4, and developers who opt for Apple's new system will need to start paying fees starting in March when the update launches to the public.

Article Link: Apple's EU Core Technology Fee Could Bankrupt Freemium App Developers
 

BC2009

macrumors 68020
Jul 1, 2009
2,250
1,446
We all know that the new terms will be mandatory at the point of your annual account renewal.
I am pretty sure the new terms are there to deter people from using alternative app stores. Apple is telling the EU that the work they do to support app developers is not a charity and that adding value to the App Store (and revenue for non-free apps) is where Apple recuperates the costs of the investment they make into Xcode and all the API's (xxxKit's) they provide to developers.

I still recall when game consoles would take like 60% in licensing fees for every cartridge sold. Nobody cried about Nintendo or Sony or Microsoft doing that. How about when Amazon was taking like 95% from independent authors selling books through them and only paid them after they sold a minimum number of books? Yet Apple was the one who DOJ went after in eBooks.

There is nothing wrong with Apple taking the fees they do to provide development tools and distribution. The problem with the App Store that needs fixing is the horribly inconsistent and seemingly arbitrary review process for apps -- you would think Apple's executives would have fixed that by now.
 

Shirasaki

macrumors P6
May 16, 2015
15,866
11,236
There we go. Talking about malicious compliance, but worse. Who on earth can easily rack up $48k/mo as freemium app? Does that mean freemium microtransaction model will end as we know it?

The worst part is, iOS devs have no choice but to pay this fee, or suffer being pulled from App Store. And again, Apple doesn’t have to pay this fee themselves while racking up millions of individual install. Who knows how long the “current terms” will last?

If this is not anticompetitive behaviour, I don’t know what it is.
 

klasma

macrumors 603
Jun 8, 2017
6,263
17,612
If you’re app is free, why the hell would you list it in a side loaded store knowing the fees.
Because of Apple’s content and other restrictions. One reason developers (and users) want side-loading is to not be subject to what Apple thinks are appropriate apps or not. For example, a retro-gaming emulator app.

Haven’t we seen enough cases of apps being arbitrarily rejected by Apple’s review process? And that’s only the cases that were prominent enough to go viral. (Though it looks like that won’t be stopping with Apple’s new third-party-app-store review process.)
 
Last edited:

aidler

macrumors 6502
Jun 18, 2009
478
1,115
Even a freemium app should easily be able to make 45k per month with clever advertisement if it has 2 million installations.
Or if you operate a freemium app, there really is no reason for you to use the new model, and you simply stay in the Apple App Store.
1706228819964.png
 
Last edited:

Seoras

macrumors 6502a
Oct 25, 2007
767
2,019
Scotsman in New Zealand
I'm a one person app developer, no longer in the EU thankfully, who wants nothing other than the status quo.
15% is fine by me. 30% was greedy.
I've been through the pain of having to re-spin an App for Amazon's app store and long since dropping it.
It's just more overhead and not much in the way of sales or exposure.
From my perspective 2 app stores is plenty and adequate. (Play & Apple App Store).
The only person who wanted this is Sweeny at Epic. Oh and probably the Gov spooks for a side door into our digital lives..
 

ender78

macrumors 6502a
Jan 9, 2005
604
356
There we go. Talking about malicious compliance, but worse. Who on earth can easily rack up $48k/mo as freemium app? Does that mean freemium microtransaction model will end as we know it?

The worst part is, iOS devs have no choice but to pay this fee, or suffer being pulled from App Store. And again, Apple doesn’t have to pay this fee themselves while racking up millions of individual install. Who knows how long the “current terms” will last?

The 30% fee comes into play around the million dollar in annual revenue so about $80K/month. If you're not pulling in that much revenue every month you pay 15%. The significant majority of all revenue in the App Store comes from Fremium Games.
 

GrzMik

macrumors newbie
Oct 30, 2019
8
66
There we go. Talking about malicious compliance, but worse. Who on earth can easily rack up $48k/mo as freemium app? Does that mean freemium microtransaction model will end as we know it?

The worst part is, iOS devs have no choice but to pay this fee, or suffer being pulled from App Store. And again, Apple doesn’t have to pay this fee themselves while racking up millions of individual install. Who knows how long the “current terms” will last?

If this is not anticompetitive behaviour, I don’t know what it is.
Well you clearly don’t know. What were devs expecting? To pay nothing? It was obvious from the start there will be some kind of fee, like for Xcode or something else.
 

Magnus81

macrumors newbie
Oct 23, 2021
29
70


App developers in the European Union who choose to opt in to Apple's new business terms must pay an €0.50 "Core Technology Fee" or CTF for every app install over one million installs, a model that has the potential to bankrupt free or freemium app developers.

app-store-fees-eu.jpg

Apple does not charge for the first one million "first annual installs" per iOS account each year, but after that, developers will begin racking up charges. A free or freemium app that goes "viral" and is downloaded more than one million times could be forced to pay astronomical fees, as demonstrated in estimates shared by developer Steve Troughton-Smith.


Under Apple's new business terms, a free or freemium app that gets two million annual "first installs" would need to pay an estimated $45,290 in fees per month according to Apple's fee calculator, or more than half a million dollars per year, even if no money is earned.

That's an unsustainable model for free apps, and freemium apps would need to be earning at least €0.50 per user to break even with the fee. A freemium app with thousands of installs from non-paying users could end up owing far more than is made. Developers will likely need to charge up front to ensure their apps make enough money to pay the CTF, as offering a free-to-download app could be risky if downloads exceed 1 million.

Free and freemium app developers can, however, choose to stick with Apple's current App Store business terms instead of opting for the new terms. In that situation, nothing would change, and app developers would continue to pay a 15 to 30 percent commission to Apple.

The €0.50 CTF applies to apps distributed both through the App Store and through alternative app stores if developers choose the new business terms. With the App Store, developers are charged the €0.50 fee and must pay a 10 to 17 percent commission to Apple. With an alternative app store, there is no commission. Fees can be estimated for the existing terms and the new terms through a dedicated calculator that Apple has provided to developers.

Here's a breakdown of the available options:
  • Current App Store Agreement - Developers pay Apple a 15 to 30 percent commission. Under one million in revenue is a 15 percent commission through the App Store Small Business Program, over $1 million results in a 30 percent commission. Subscriptions require a 30 percent commission for the first year, and a 15 percent commission for the second year and beyond.
  • New terms, App Store distribution - Commission drops to 17 percent from 30 percent, and 10 percent from 15 percent. There is an additional fee of 3 percent for using Apple's payment system, so the commission would be between 13 and 20 percent for a developer that opts for the new rules and uses in-app purchases. The 3 percent fee does not apply for developers who use alternative payment systems. Developers must also pay €0.50 per app install per user each year after 1 million app installs.
  • New terms, alternative app store distribution - No commission, but developers must pay €0.50 per app install per user annually after 1 million app installs.
According to Apple, the CTF is applied for the first annual install, which is the first time an app is installed by an account in the EU in a 12-month period. After the first annual install, the app can be installed any number of times by the same account for the next 12 months with no charge.

Apple is waiving the fee for nonprofit organizations, accredited educational institutions, and government entities that are approved for a fee waiver.

Apple's Core Technology Fee could also be prohibitively expensive for apps like Spotify that have millions of users. An app that makes $10 million in sales through the App Store with 10 million "first installs" (aka, a 0.99 price) will need to pay Apple over $500k per month.


The EU app ecosystem changes are included in iOS 17.4, and developers who opt for Apple's new system will need to start paying fees starting in March when the update launches to the public.

Article Link: Apple's EU Core Technology Fee Could Bankrupt Freemium App Developers
This is good, it means it will be more economical to just use the default app store. I would like Apple to win this va. EU so they give up.
 
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