
Apple and Google Face Growing Revolt Over App Store ‘Tax’ - tareqak
https://www.bloomberg.com/news/articles/2018-08-22/apple-and-google-face-growing-revolt-over-app-store-tax
======
cptaj
And they should. We are fast approaching a world where all markets are walled-
in by a few international companies. I've had clients of mine go under because
Amazon decided to close their accounts and they depend on the platform to sell
their wares. Imagine how hard it is to sell stuff online if you're barred from
ebay and amazon... and there is no legal recourse to appeal those bans.

Same goes for app stores, what happens if google and apple ban you for
whatever reason? Your company is screwed and you have no appeal or legal
safeguards.

I'm scared shitless of "gig economy" platforms. I see a future where one or
two platforms rise to the top and all jobs are handled through them. A bad
rating can destroy your entire career. The platform will never forget, there
will be no second chances.

Scary stuff. We as a society need to start thinking about how we rate people.
Right now we all shop for that 5-star rating and punish anyone with 4. We need
to mature beyond that as it grows increasingly impossible to maintain perfect
ratings.

Regulation is a very very touchy subject, but if millions of people depend on
your platform for their livelihood, you can't pretend to still exert arbitrary
power of life and death over them with some $5/hr customer service drone
trying to go over your case swiftly to meet a daily quota. We need real due
process.

~~~
avar
It's really screwed up even as a consumer. E.g. for things like Uber I've
taken to always rating 5 stars regardless of my experience, because even if I
have something bad to say do I really want to so nonchalantly be a cog in the
machine of potentially robbing someone of their livelyhood?

~~~
imgabe
Yeah, the way Uber ratings work it seems like there are only two ratings: "I
had an acceptable experience" or "This person should lose their job".

~~~
rashomon
It's the same for restaurants in low-volume areas. That under-4-star death
knell is a killer for sales.

On the other hand, I love perusing those 3-star restaurants as I find so many
hidden gems covered in the tears of LLC owners and bored hostesses.

If I were a lesser man, I totally am, I would write a book concerning that
social theory called the Star Divide.

~~~
pferde
Hopefully it would be better than the related Black Mirror episode (Nosedive),
which started with an interesting premise, but handled it in a very crass and
immature way, more reminiscent of stupid Hollywood teen comedies (e.g.
American Pie).

------
bangonkeyboard
"App Store fees got you down? Meanwhile at Epic, they lowered their take on
the Unreal Marketplace from 30% to 12% and retroactively paid back years of
fees.

"Epic said this is due to the success of Fortnite. If only Apple and Google
had successful products to rely on for income."

—
[https://twitter.com/agilethumbs/status/1029804861477412865](https://twitter.com/agilethumbs/status/1029804861477412865)

~~~
WilliamEdward
I really like that. I think the first thing people should do when making a
startup is finding a consistent revenue stream and business model. Most
companies are actually more about the model than the idea. Hell, even Nike
only makes about 6% of profit on their $100 shoes. They can do this because
they have a consistent and reliable business model (aka not advertisement
income). It's not even the shoes anymore. it's the idea of the shoes.

~~~
scarface74
Just to provide a reference on the $6/Nike shoes, because I didn't believe
it....

[https://solecollector.com/news/2014/12/how-much-it-costs-
nik...](https://solecollector.com/news/2014/12/how-much-it-costs-nike-to-
make-a-100-shoe)

~~~
WilliamEdward
Thank you for that. I believe the source i read included marketing in the
expenses, but that was long ago.

------
ObsoleteNerd
Doesn't Valve take 30% from games on Steam? But they're complaining Apple
taking 30% is too much?

I also don't really think the Apple/Google fee is that unreasonable.
Considering the resources, tools, marketplaces, tutorials, payment processing,
all the other All dev stuff they provide in general. Yes if your app goes big,
they make a lot of money. But for every big app there's something like 9 that
fail completely (it's murky due to how many apps aren't intended to profit in
the first place, and are just made to attract customers to a brand).

I don't know the numbers though. Maybe they could charge lots less. But just
from my single viewpoint, it doesn't "feel" unreasonable.

~~~
cgriswald
Steam does not sell me a locked down hardware platform preventing me from
buying the software directly from the publisher. Nor does Steam force me to
buy DLC through Steam, I am free to buy the DLC directly from the publisher.
Steam gets a cut of what I buy _from Steam_ and I am not locked into buying
from Steam in order to make my PC useful.

Apple sells me a locked down hardware platform that requires me to go through
them for all software purchases _and_ all data purchases made with that
software.

> But just from my single viewpoint, it doesn't "feel" unreasonable.

It seems unreasonable to me that Apple should get a cut of my Amazon Video
purchases. Apple adds no value there; they just get in the way and try to take
a cut. I _already have_ a relationship with Amazon and when I download a video
from Amazon, it costs Apple nothing.

The entire thing where I have to make a purchase through the Amazon website
rather than the Amazon or Amazon Video app and then download it with Amazon
Video app is just stupid.

~~~
rlanday
> Apple adds no value there

Other than inventing the modern phone, writing the operating system and
developer tools, running the store, manufacturing the phones people are
consuming Amazon's product on and convincing people to buy them...you can
argue about what's "fair," but Apple's certainly adding value.

~~~
kartan
> but Apple's certainly adding value.

Do roads add value? Should trucks pay a 30% of their cargo retail price in
road tolls?

I agree with your point that Apple adds value. I just do not see that as a
justification to take a 30% share of all apps that run on their devices.

~~~
greedo
Trucks pay fees based on the load they're carrying...

~~~
fjsolwmv
The weight, not the price.

------
scarface74
For perspective....

In traditional retail, the publisher only gets 45% as opposed to 70% for the
app stores.

[https://kotaku.com/5479698/what-your-60-really-
buys](https://kotaku.com/5479698/what-your-60-really-buys)

~~~
blihp
That's true for retail but that hasn't been a thing for most developers since
the 90's. And traditional retail includes things like physical shelf space in
a real store with real boxes etc. Since the late 90's/early 00's developers
have been selling and distributing (PC/Mac) software online where the typical
processing fees are usually reported as no more than ~10-15%.

The app store narrative has been 'look at how much better developers have it
than the old days of retail' when the reality is most of the smaller
developers could never realistically sell through the traditional retail
channel anyways. (there was a lot more to it than the larger cut involved) The
other reality is that mobile devices are locked down in ways that PCs
historically have not been (i.e. difficult to impossible for most end users to
install software outside of the app store) and the only realistic option they
had was to go through the platform owner. (i.e. Apple/Google/Amazon/Microsoft)

I'm all for the app stores getting a cut but the 30% number represents more
the fact that the platform owners are gatekeepers rather than any real value
being offered.

~~~
scarface74
_That 's true for retail but that hasn't been a thing for most developers
since the 90's. And traditional retail includes things like physical shelf
space in a real store with real boxes etc. Since the late 90's/early 00's
developers have been selling and distributing (PC/Mac) software online where
the typical processing fees are usually reported as no more than ~10-15%._

Most console games are _still_ sold retail because people want the ability to
trade them in. In the early 2000's high speed internet wasn't ubiquitous and
most software was still being sold in retail.

 _The app store narrative has been 'look at how much better developers have it
than the old days of retail' when the reality is most of the smaller
developers could never realistically sell through the traditional retail
channel anyways. (there was a lot more to it than the larger cut involved) The
other reality is that mobile devices are locked down in ways that PCs
historically have not been (i.e. difficult to impossible for most end users to
install software outside of the app store) and the only realistic option they
had was to go through the platform owner. (i.e.
Apple/Google/Amazon/Microsoft)_

So the app stores have been a net positive for small developers? How many
people are (or should be) paranoid about downloading software from a random
site and then putting their credit card information on the same random site?
How many that are willing would even go through the trouble of entering their
credit card number as opposed to just authorizing the payment through
Apple/Google?

Console manufacturers have also demanded a cut of software sold on their
platform since the mid 80s. You couldn't sell a game on a console without
having signed code on the cartridge/disk and I believe most of the console
makers forced you to use them for manufacturering..

------
MBCook
I think Apple’s fee is more than fair for many developers. Free hosting, they
do all sorts of payment compliance/fraud/tax stuff for you.

To a small developer I think it’s a huge boon.

But once you become BIG (Candy Crush, Fortnight, Netflix, Amazon) that
advantage no longer applies. Those companies are all capable of doing all the
payment stuff on their own.

And when you’re doing Fortnight business that 30% is a TON of money.

I seems like Apple should offer a sliding scale based on transaction volume.
Starts at 30% and goes down to a bit above credit card fees (say 5% or 7.5%)
once you are taking in enough money.

There are still big benefits to the App Store handling payment, like
centralized billing, already having card information entered, their
‘allowance’ features, etc.

That would probably help a lot of the big indie applications too.

I suppose they could let you use your own billing system for a flat fee. Say
$5-10 million a year. If your volume is high enough it’s worth it you could
opt out. They could use that money to ensure quality/compliance.

Unfortunately services revenue has been the one bright spot in Apple’s numbers
recently. And a big cut there wouldn’t look good. So I don’t expect Apple to
do anything out of charity.

The only plus is some of these groups are big enough they can push back on
Apple and it would do something. Now that Fortnight is on Android, can you
imagine the power they’d have over Apple if they said they were leaving the
platform over this?

Some BIG properties are going to have to shun iOS and get users mad to make a
real change. I have a hard time seeing that happen since iOS is just too
profitable.

~~~
taurath
30% is a TON of money regardless. Its the difference between being in business
and not if you are a niche product, profit vs loss for a small medium sized
company. You're giving up 30% of your revenue.

Payments? Stripe fees are like 3-4%. Distribution? Free/non-IAP apps don't pay
for this other than some licensing fees. I don't think there is a benefit that
IOS/Gplay provide that even approaches being worth a 10% revenue hit, except
in extreme cases.

~~~
maym86
> You're giving up 30% of your revenue.

Only if people would find and download your app somewhere else. This works for
fortnite because they have the brand recognition and fanbase who will seek it
out elsewhere. Even then it might be a barrier.

For smaller apps there's little chance they'd be making as much money or ever
even be found if they weren't on the app store so the 30% maybe a fair price
to pay vs nothing at all.

Seems like a trade-off where any app developer can self-publish yet there are
still a lot of apps available on the play store.

------
adrian_mrd
Three thoughts.

There is a certain irony at play here, given both Apple and Google's own
fights with tax authorities in many jurisdictions (eg the double Irish and the
EU, Australian complaints about tax avoidance, agreements about their use of
shell companies in the Cayman Islands or other tax havens, etc.).

I have always wondered what the real cost is to both Google and Apple in
running their App Stores? The 30% figure has been a constant - with a few
exceptions like the in-app subscriptions after 1 year on iOS down to 15% - for
10 years now but what are the actual revenue vs cost figures involved in
running these [billing] stores? What would be a fairer cut... 10%? 15%? 17.8%
in large economies and 22.6% in smaller countries (as semi-random numbers),
etc.

Currency fluctuations are also important. Apple more so than Google, also seem
to make quite some revenue from pegging their prices against the USD and only
updating these once or twice a year - and generally only at very favourable
forex conversions in Apple's favour. An unintended side effect here is that
many non-USA consumers are subsidising USA consumers purchases of both Apple
and Google products (because the USD is the benchmark price). Given the
reliance on China as the hardware manufacturer, maybe the Yuan would be
'fairer' in many instances? (It won't happen of course due to how Cupertino
and Mountain View centric both companies, and by extension, how pro-USA many
of their pricing decisions are).

~~~
bskap
Calculating costs here is tricky. Do you only include the cost for Google
running running the Play Store infrastructure itself, or do you also include
the costs of developing and running Google Play Services? What about the costs
Google has developing Android itself, which is otherwise given away for free?

~~~
adrian_mrd
Good points. Part of the problem with the debate at this point is that there
is little to no transparency about any of those costs.

Android is obviously a larger ‘strategic’ play so I would argue that should be
excluded and Google Play Services are also likely to either be ‘strategic’
plays (ie Apple offers music, so do we; Customers want movies, let’s offer
them too, etc) or potentially revenue positive.

If Google’s and Apple’s accountants can setup magical tax systems across the
world - they could also provide some useful data points about the true costs
of running their App stores.

As a specific example, I’d be interested to know, what the hosting and
bandwidth costs are for the App Stores (likely heavily subsidised given both
Apple and Google run cloud platforms including hosting).

At the moment, there is next to no transparency except the “30%” cut and some
high-level info in their quarterly financial reports.

------
forty
I read that Apple recently (June) added this to their rules: "Multiplatform
Services: Apps that operate across multiple platforms may allow users to
access content, subscriptions, or features they have acquired elsewhere,
provided those items are also available as in-app purchases within the app.
You must not directly or indirectly target iOS users to use a purchasing
method other than in-app purchase, and your general communications about other
purchasing methods must not discourage use of in-app purchase."

Now you don't even have the choice not to sell your subscription products on
iOS...

~~~
singularity2001
Hopefully that's the last straw for anti-trust agencies to chime in.

------
makecheck
The 30% cut _would_ have been reasonable after all this time if the platforms
were doing anything useful with the money.

Instead, we got:

\- Store APIs that to this day are stupidly complex to get right in all cases,
making you wonder why it’s so hard

\- No support for very common, decades-old pricing schemes like “free demo,
then buy” (except through convoluted means)

\- Stagnant app store designs (esp. Mac, for YEARS)

\- Absolutely _terrible_ search

\- Stupid same-apps-on-list-every-week “categories”

\- A strong preference to reward obvious overpriced scams/gambling games, etc.
instead of rewarding development of apps that are hard

~~~
kristofferR
The iOS App Store design is pretty awesome actually. It got a total design
revamp last year in iOS 11 [1], and it's coming to macOS Mojave in a couple of
months, so to claim the design is stagnant is incorrect.

It's fluid, and has great use of typography, spacing and colors. I don't see
how it is criticize the design of it, the design is the best part. The missing
features (like demo versions not being possible) etc and bad policies are the
issues, not the design.

An annoying thing with the new design is that the Today content only is saved
for a week, past articles and selections gets lost (archiving the editorial
content would actually be a smart website idea, if you disregard the copyright
issues), ideally it should be indefinitely scrollable.

Edit: It's frustrating that people don't bother explaining what is wrong with
the design of the App Store instead of just downvoting me.

[1] [https://www.apple.com/ios/app-store/](https://www.apple.com/ios/app-
store/)

~~~
chooseaname
I didn't (and won't) vote on your comment, however I think the down votes are
due to the fact that you praised the App store while saying something negative
about the Play store. Even HN is not without it's fanboys.

------
gergles
Maybe this will make Apple reconsider their entire "software development tax"
revenue stream. It is abhorrent that I have to pay them $99 a year to run my
own apps on my own device.

(Yes, I know you can install your own app through XCode. That runs for 7 days.
Then must be re-signed. It also can't use tons of features including things
like App Groups. Not acceptable.)

(Further yes, I know that if you have _ever_ had a paid account, apparently
some of the restrictions are relaxed - for example, you apparently get 90 days
on your provisioning profiles. This appears to be Noblesse Oblige on the part
of Apple and is not a documented policy, so I'm not willing to rely on it.)

------
ksec
I don't have a problem Apple charging game developers 30%, I have a problem
with Apple not caring about the gaming development and has comparatively
speaking, almost zero contribution to the gaming communities. From improving
drivers, middle wares, to that idiotic Game Center.

I don't have a problem with Apple charging Netflix 30% for access, I have a
problem with these subscription tax every month that Apple collect and offer
absolutely zero value to me as an user. And they then may have use that money
to create a show called Planet of the Apps.

I don't have a problem with Apple charging Spotify 30% access, I have a
problem with Apple Music being complete piece of crap outside possibly English
speaking countries, and some Apple Music features are tied to OS not available
to Spotify.

Basically as a user I could care less about where those money goes, as most
users don't. But when they discovered they are paying more while being offered
an inferior solution, that pill is hard to swallow. And it makes it so much
harder coming from Apple, because they keep bragging about how only Apple
could do it, how they _care_.

~~~
yayana
As an end user you feel like you don't care only since you can't see that you
are always paying more for worse services due to the 30% gardens.

It is similar to the hard fought American Express tax. Vendors needing to pay
2% if the customer is using Amex and not being allowed to pass it on to the
specific user meant raising their prices 2% (or spending 2% less on content)
for all users.

------
jamesholden
" They’re very aggressive about making sure companies aren’t trying to work
around their billing," said Alex Austin, co-founder of mobile company Branch.
"They have whole teams reviewing these flows to ensure they get their tax." "

Funny, Apple has similar teams working in the same company, who work at
finding ways to SUBVERT paying taxes to governments, etc. Seems ironic that
they are so strict about developers paying this 'tax' and then simultaneously
trying to avoid paying taxes themselves.

~~~
lotsofpulp
That's not ironic, it is exactly what one should expect from a team of people
whose goal it is to make money.

People do it in their personal lives too, try to get away with paying the
least that they can, and earn as much as they can.

------
dangjc
Maybe Apple and Google should be paying app makers instead considering how
much more valuable their phones become BECAUSE of apps. If there was perfect
competition between more than two OS makers, I'd predict the charge would be
closer to 0. Without it, we can only stab into the air to guess what the real
clearing price would be.

~~~
mrep
For IOS, that would make sense but the play store is basically the only way
(with the recent EU fine) that google can make money on android.

~~~
maym86
Android is a platform that allows Google to target advertising and collects
user data. The original intent was to make sure mobile users use Google
products. They can and do make money from that.

------
ballenf
This article ignores that Apple nor Google charge a tax on ad revenue in apps,
leading to the perverse outcome we have where there is an inexorable pressure
to monetize via ads even in paid apps.

I really would really like to see the tax lowered, but expanded to include
_all_ advertising revenue, with the idea that the "power to tax is the power
to kill".

Small apps will rebel forcefully and understandably from this idea, but I
don't think it will really harm them in the long run.

Unfortunately, the idea is fundamentally flawed and couldn't work with regard
to apps that run their own ad network like Facebook, Amazon or maybe Netflix
eventually. Those companies probably don't currently track revenue on any
basis that would allow allocation in any way suitable for application of such
a tax.

But if Apple had done this originally, I think we would be in a very different
world app-wise. And a better one.

------
safar
Then there's the "developer tax" too - Apple squeezes money from the
developers too for the "privilege" of even making an app (for public
distribution) for the ios platform. And you need to buy a Mac too ...

~~~
Fnoord
Luckily you can run macOS in VirtualBox, KVM, Qemu, ESXi, etc.

~~~
enitihas
Legally?

~~~
Fnoord
On ESXi, yes. On the other ones: supposedly only if the host is a Mac.

------
jakelarkin
If the app is a singular product that only exists on mobile, then fine you
bake the Apple/Google tax into your price.

for content subscription businesses that are multi-platform its a bit of an
absurd situation. You can't really charge 50% more on mobile platforms.
Depending on where your user randomly decides to sign up your revenue and
lifetime value of that user is suddenly 2/3rds of what it otherwise would be,
despite costs being the same.

~~~
pvg
The cut is 15% so even if you passed it on to your consumers, which nobody
does, you wouldn't charge 50% more.

~~~
opencl
Apple's subscription cut is 15% after the subscription has been active for a
year, it's 30% for the first year.

~~~
pvg
Not for Netflix, who is doing most of the complaining here.

~~~
MBCook
It should apply to anyone doing subscription billing through the App Store.

------
ZeljkoS
In my modest opinion, progressive app store fee would make much more sense:
[https://svedic.org/philosophy/why-app-stores-need-
progressiv...](https://svedic.org/philosophy/why-app-stores-need-progressive-
pricing)

~~~
iainmerrick
This is a great idea, exactly what I was trying to get at in my comment
elsewhere:
[https://news.ycombinator.com/item?id=17821945](https://news.ycombinator.com/item?id=17821945)

------
antonyme
Good grief, what a loaded headline. It's not a "tax" for a start. It's a fee.
And what does the fee cover? PCI DSS Credit card processing services, secure
web hosting, worldwide CDN-cached downloads, sales and download analytics,
listing in the premier app catalog with many millions of users, marketing
exposure for popular/successful apps, and more.

How much would it cost for developers to do all this themselves? Every single
individual developer? People seem to forget what things were like before the
App Store.

Now one could question the percentage itself, and ask if it is a reasonable
number, but when you consider the time and effort and investment that would
otherwise be required,

------
sonnyblarney
The limitation that Apple imposes whereby people can't really sideload or
download elsewhere is even more problematic.

The 30% tax is one thing - but grey, inconclusive, inconsistent and possibly
nefarious decisions made as to 'what can stay and what cannot' in the AppStore
is even worse.

It's tantamount to a kind of politico/economic censorship in the name of
security.

------
gameswithgo
I dislike App Stores and not because of fees. I feel they have made the
discovery of good software harder, and reduced the average quality and safety
of software that is available, the exact opposite of what they claim is the
benefit of an app store.

Having the single portal where you search for things, leads to immense gaming
of the system by bad actors. You search for "Chess game" and the good ones are
not to be found. Instead you get 100 ad infested, crap. It is a race to the
bottom. Everything ends up "free' with ads or dlc or privacy invasion tactics
to make money.

------
elektor
To avoid the app store tax, companies can look to Audible as an example. On
iOS, I can only add books to my wishlist and have to make the purchase on my
computer.

~~~
stickydink
And the experience is pretty awful. There's little explanation of what's going
on or how to actually make the purchase. There's a flow that works for Kindle
without leaving your phone.

------
sonnyblarney
There needs to be some kind of class-action or power play movement otherwise -
like all the top vendors removing their apps at the same time for a while. No
one entity is powerful enough to stand up to them alone. It may take some kind
of non-market intervention like legislation which is unlikely to happen in
America and I'm not sure that's the fairest avenue either.

Though it may not seem like it - this is related to 'network neutrality' \-
it's about monopoly/control of one area that's used to monopolize control an
adjacent market.

Apple and Google don't want Verizon to charge based on content ... so that
Apple and Google can monopolize the entire experience for themselves!

Antitrust is not a new idea, and it's foggy but it may come into play here.
It'd be one thing for companies to use their OS control to try to dominate
other parts of the experience, but a 'bridge too far' to limit choice. Apple
literally wants a 30% cut of the entire digital universe on their platform.
This requirement and the limitation that people can't install apps 'not
approved' by Apple I think should be addressed by legislation.

------
ectospheno
I neither need nor want every service I use to have my credit card details.
They can use the apple store or they can just do without my money. I'm fine
either way.

~~~
shade
Yes, I prefer not having my card details stored across so many different
services. Even though I trust Netflix to be competent on security, it's one
more place I have to remember to update/manage it every time I get a new card.

A friend of mine noted something I'd forgotten while we were discussing this:
that cancelling a subscription through the App Store is just a few clicks.
Doing it through other channels can be a tremendous pain.

------
Nasrudith
Really the only reason they can charge their percentage is their critical mass
- they have a high degree of customer volume that rolling their own won't
match unless they are already big names.

It is a bit of an ironic "meet the new boss" with publication considering
there isn't a high capital requirement in itself. Technically marketing can
help but reputation is far more fundamental - look at bing failing to be a
Google rival despite subsidies from Microsoft. It isn't quite like the XBox
where throwing money at the problem can establish a big name niche.

Tech serms to have a strange habit of winding up in technically easy to enter
but hard to compete markets.

------
whatever1
Microsoft was crucified for having internet explorer as default browser (not
banning other browsers).

Apple with 45% market share in the US smartphone market faces no issues with
banning app store competition (even html5 based stores)

Sounds fair

~~~
kalleboo
Microsoft had a market share around 95%. Quite a difference there.

------
da_murvel
I'd like to compare the situation to the record industry, where artists
usually get something around a measly 10% of the income generated by record
sales. Artists are busting their asses of while the record companies are
cashing in like never before. And yes, there are some artists that make more
money than others, but they still only get a percentage of what their fans
really pay them. I understand that they, being record companies or Google
Play/App Store, need and rightfully should demand a fee for helping their
content providers with a platform for their product. But at the same time,
without the content providers, they would be nothing. The music industry has
already seen the rise of various indie labels, artists starting their own
record companies and such. And although I realize the difficulty in doing
something equivalent within the mobile app industry, Google or Apple are
already saying that you as a user should only download apps from approved and
reliable sources, i.e. Google Play and App Store, I think we will see some
sort of similar development. Perhaps companies will start providing app
downloads on their own, create their own app store platform etc. Especially
since the companies themselves get so little out of making their apps
available on Google Play and App Store. They still need to market their apps
for example.

------
majani
Funny how the same developers will cheer for Apple when they post incredible
profits every quarter. At such levels of profit, there's always someone in the
supply chain getting screwed

------
notafraudster
I think the focus on "30%" is a little mis-statement. You can pretty easily
argue that 30% is too high, but clearly they aren't going to pass along the
12-15% or whatever it actually costs them (assuming 5-7% for payment, a few
more % for server costs and bandwidth, a few more % for customer support and
developer support) -- clearly they're going to value their monopoly audience
attention at some non-zero number. So what does that bring us to? 20%? 25%?

The real issue isn't the few percentage points the devs would like to claw
back, it's with applications that have recurring billing and would prefer not
to give a percentage at all. Netflix doesn't want to cut Apple in on
subscribers. Neither does Amazon with Kindle. Any percentage based system is
going to be unfair to someone: if they take a percentage on upfront purchase
cost, Apple/Google will get nothing. If they take a percentage on subsequent
revenue or subscription revenue, it'll seem disproportionate on an ongoing
basis to the value the companies supply.

Making matters worse, it is not especially feasible to come up with a
different rate on a case-per-case basis without grossly distorting the market
and magnifying existing first-to-market advantages in an undesireable way.

~~~
iainmerrick
I'm not sure trying to figure out the "correct" percentage to cover Apple's
costs really makes sense.

All those factors you mention are probably better measured as a flat fee per
user rather than a percentage of the sale cost. Free apps cost Apple just as
much to host and support as paid apps, so why don't they get charged?

The 30% is essentially arbitrary. They're making a healthy profit from the App
Store, so 30% must be on the high side. And the amount different apps are
paying must vary a huge amount, only loosely correlated with their hosting
costs.

------
fipple
To me, the worst consequence of the App Store tax is that it aligns the
interests of Apple with app developers rather than users (who ultimately
provide Apple with much more revenue). Apple promotes things like “Top
Grossing” because it makes tons of money off those dumbfuck apps that turn
users into broke zombies. If they only got 5%, they’d create an App Store that
encouraged and promoted apps that delivered great entertainment at low cost.

------
nickjj
Look at platforms like Udemy (selling online courses).

They take 50% of your revenue and not only that, they also control the prices
of your course by selling them for $10 year round (of which you'll get $5 for
a ~5-10 hour video course that takes 4 months to make and it's also expected
you offer 24/7/365 support).

Yes I know you can opt out of these things but then you're hidden from search
results by default which defeats the entire purpose of using a marketplace.

As a content creator I despise marketplaces because you lose control over your
business. You don't even get to contact your customers directly since details
like emails are hidden from you and you either make or it fail based on their
search engine's ranking algorithm.

As a content consumer, marketplaces make it pretty easy to find good things,
but at the same time I feel like if you have good content, people would find
you without a marketplace.

I can't wait until these marketplaces eventually bust from content creators
just picking up and selling stuff on their own.

------
siruncledrew
There's some full-circle irony in Apple and Google complaining about taxes
being too high and using ways to avoid them, then they get served with the
same tactics by companies in their ecosystems. Without passing judgement, it's
just one of those classical examples of "what goes around comes around".

------
bonestamp2
Don't get me wrong, it is bad... but it also could be worse. Amazon takes 70%
of the revenue from my kindle blog subscriptions! I have more subscriptions
than some really big publications too. It's nearly criminal, but it's an easy
way to monetize a blog so it's better than nothing in a way.

------
franzwong
I have no idea why I need to pay Apple even I just want to put a App created
by myself to my own phone.

------
teekert
I used to have a Moto G, the fist one with 8GB of memory. This forces you into
a strict app diet... And hey, it turns out that many services have nice
websites, some even more functional that their app counterparts (i.e.
Facebook) and without the tracking (if you so choose) and weird permissions.

By the way, Netflix may complain but they are the most horrible app I known
when it comes to requiring Play services and a "normal" Android rom. Oh you
have rootless LineageOS with all play services? Still no app for you. Funny
thing is it was very easy to get is from apk mirror. Why not from
netflix.com/apk? Hmm, perhaps this was their intent thinking about it now...

Anyway, the tax is only a part of the locked ecosystem problem imo.

------
ulfw
Very few businesses have 50%+ margins so they can afford to waste 30% paying
Apple or Google for hosting a few MBs of a file. I can imagine that App Store
'tax' to go down to 15-20% in the near future and stay at that level for the
next decade.

------
walterbell
The problem is less the fee than the lack of value being provided to
developers and consumers, e.g. improved app discovery, more flexible business
models for app monetization. If app stores unbundled their 30% fee into
separate fees for services provided to developers, there would be internal
competition among services to win developer adoption.

Market-based developer feedback would improve the services being offered by
app stores. Google/Apple made a feature change and developer revenue from that
feature dropped by 25%? Time to revisit the decision. At the moment,
developers pay the same fee independently of the quality of the “product” they
are purchasing.

------
skunkworker
With Apple shuttering their affiliate program for iOS I hope this means the
fee will drop to 15% or even 10%. Otherwise I can't see them dropping that
affiliate program unless a change was in the future that could affect it.

~~~
MBCook
Ha. As an Apple fan, I can’t see them doing that. They wanted the money to
make their services revenue look better.

I imagine it wasn’t close to 10-15% of purchase on average anyway. And I’m
guessing it didn’t apply to IAP, where the real money is.

------
john-doherty
It is a heafty price to pay, I could understand 30% in the early days, but the
volume they’re dealing with now does make it feel unfair.

Surely the solution to this is Progressive Web Apps, WebGL etc? At some point,
they’ll distrust themselves

~~~
binomialxenon
I'd rather see alternate avenues of distribution for mobile applications, but
this might not ever happen on iOS.

------
pascalxus
I think it's a legitimate complaint considering how terrible the app store
search is. On android, I can never find the app I"m looking for with their
search. I always end up using Google search to find the apps I want. And even
then, it takes many many searches to find what i want.

Consider the following need: "I want a free running app that can track my
weekly mileage". Quite a simple request right? Search through all the top apps
on Android app store, it took me a long time to find a good one that met my
needs and had this feature.

And, I'm seeing that the top apps aren't always the best ones.

------
justonepost
Ok, this doesn't make sense. Maybe APPL, but there is no way Google is that
dependent on app store fees.

"If app store commissions fell to a blended rate of 5 percent to 15 percent,
that would knock up to 21 percent off Apple’s earnings, before interest and
tax, by fiscal 2020, Macquarie estimated. Google could lose up to 20 percent
by the same measure, according to the brokerage firm. The technology giants
are expected to earn more than $50 billion each, before interest and tax, in
2020, according to analyst forecast data compiled by Bloomberg.

------
snarfybarfy
I think this is a classic market failure due to network effects/monopoly; one
of those cases that could be resolved(?) by looking at the earnings of the
company in question.

Are they making a loss. Break even. Small profit. Large profit?

If, after all the creative accounting, they still show a large profit then it
certainly must be a monopoly.

Otherwise someone else would come in and offer the same service for less.

------
baybal2
Well, see once an app becomes more important than its platform, the platform
has reasons to worry.

Recent exodus from apple app store over in app purchases began with Tencent
strongarming Apple to let them run their own in app payments under a threat of
them quitting.

It doesn't require one to be a brilliant thinker to ask "if Tencent was
allowed to, why can't I?"

~~~
enitihas
I think this point can't be emphasized enough. I read somewhere that Apple
wouldn't want to go back to those days when some applications were more
important than their platform, and when they were at the mercy of Adobe or
Microsoft to continue providing software for the Mac. If an app becomes bigger
than the platform, the platform loses it's strong lock in, and becomes
dependent on the application. Like WeChat has become a platform in itself, and
in China basically is the de facto platform a phone must support to be usable.

------
sundvor
"A recent European Union antitrust ruling requires the company to stop
automatically installing its app store on Android phones in Europe. (Google is
fighting the charges.)"

Wait, are they going after Apple too? Or are they ok because they've locked
down their platform 99.999% (assuming there's still some jailbroken ones out
there)?

------
CharlesW
Is this any different than the same non-story we've been reading since
2011?[1]

Don't want to give Apple their cut? Do what Amazon does, and don't sell
through the App Store.

[1] [https://www.businessinsider.com/apple-
kindle-2011-2](https://www.businessinsider.com/apple-kindle-2011-2)

~~~
adorable
And so how do you sell iOS apps or in-app content then?

~~~
ihuman
Release a free app that requires a user to log in. In order to access the
content in the app, the user has to log into a web browser with that account
and pay directly via the developer's website. Amazon Kindle and Netflix kind
of do this. With Kindle, you have to buy the books with a separate app instead
of a website, and Netflix has the option to buy inside the app as well as
outside.

~~~
MBCook
Apple has rules against circumventing their billing system. Netflix gets to do
it because the service works if you don’t have any iOS devices.

I’m not sure someone like Fortnight could get away with bypassing it. If they
did it would only be due to being a special case due to pull. No normal app
could get away with it, you’d get pulled fast.

~~~
ihuman
IIRC you're just not allowed to programmatically open a web browser; you have
to tell the user to do it themselves.

------
arendtio
For everybody who doesn't want to participate in the whole App-Store-Tax
economy, I suggest taking a look at Progressive Web Apps which do not need any
App Store and work cross-platform. Just be aware that they do not support all
APIs, so for some use-cases, they can't compete with the native apps.

------
vtange
I'm interested in this issue in the realm of gaming.

The way I see it Apple and Google tax mobile games for using Apple and Android
phones as gaming consoles. How does Nintendo, Sony, and Microsoft(Xbox) handle
revenue share and developer licenses?

------
tyrex2017
In the past I supported the Google and Apple tax, because they kind of created
this opportunity.

Now I believe they have gotten their money from this innovation, and the tax
should be reduced to sth like 8%

It is a monopoly now (inside Android or iOS phones).

------
Mikho
Eagerly wait for any big brand to refuse to release on iOS at all due to the
tax and being unable to bypass it by an app installation via a web-site. This
tyranny that takes the whole margin should definitely end. It's especially
painful for any media business where a piece of content has only so many views
and stores just take all the margin while adding absolutely zero to
distribution, hosting, developing, promoting or engaging with users. It's like
Samsung would start demanding a cut from anything used on an iPhone where
there is a Samsung display. Stores do not even add value in app discovery and
getting new users. They just demand even more money to promote an app in a
store to later take yet another cut. Insane situation.

------
lancewiggs
70% of,the retail price is extraordinary in any market for physical goods,
where they pass through layers of resellers, distributors and wholesalers,
each taking their clip. Meanwhile there is no other cost of goods sold. Yes
Apple take a lot, but the deal developers get, simply because of the lack of
other parties, is superb. For example, Apple makes it trivial to sell to every
country, whereas for physical goods, or even for online goods, it is very
difficult and ex-endive to understand pricing, language, tax and other
compliance - even if you could get permission to sell there. But yes it is
well over-time for the removal of practices that have lowered out trust in the
ecosystem - in particular iap systems targeted at whales, and pseudo gambling.

------
kraig911
Maybe the internet has made the world crappier :(. I mean anti-vaxxers, wall-
gardens, tax-frauding, election gaming... the list goes on. Seems like
everyday we as dev's suck more and more.

------
l5870uoo9y
Does any of the many app stores in China charge a percentage? Can't find any
number on its largest one, MyApp Tencent, which has ~10% of the app market.

------
Fifer82
I noticed this the other day, I had seen on my desktop that YouTube was £11.99
per month. When I was out, i had forgotten to sync my songs but I wanted music
for the day so I went to try YouTube Premium.

£15.99 per month. I could have sworn it was £11.99.....

I deleted my YouTube app, and signed up for £11.99. Reinstalled my YouTube app
and it was Premium.

I am being told to "get the app as it is better" and yet evidence suggests
that having the app cost me £48 a year in this situation.

That is ridiculous surely?

~~~
kristofferR
The price increase has nothing to do with if the app is installed or not, just
wether you sign up through the app (where Apple takes a cut, usually leading
to a price increase) or not.

It's the same with most other multi-platform services, never subscribe using
iOS apps if signing up through their website is possible.

~~~
Fifer82
What is the difference? You have the app, and safari opens up all links in the
YouTube app. You get rid of the app, and safari opens the youtube website.

Getting the App costs you a 33% tax over not having the app in this
circumstance.

------
zepto
The App Store tax is irrelevant compared to the lack of flexibility around
things like paid upgrades.

------
wemdyjreichert
"Around the world, everyone is looking for ways to push back against American
tech,".

Why?

------
cm2187
And between PWA and WebAssembly, it is going to be even more difficult in the
future to force developers to use the store when they can access most of the
functionalities they need without paying a penny or having to bend in front a
capricious app review policy.

~~~
merpnderp
Not when Apple refuses to implement web Push API. Without Push, webapps can't
compete.

------
dawhizkid
Is there a SaaS opportunity here? Helping developers create a frictionless
experience redirecting customers to an optimized web view to complete payment
and then back to the app in a seamless way?

~~~
monocularvision
Not on iOS at least. You can’t directly take them to a payment web form. You
will see that most apps that bypass App Store payments give some text about
how they need to go to a website (which is not clickable) to perform the
action. Opening up a browser for them will get you rejected.

------
valuearb
I remember when software developers enjoyed free markets to sell their
products in.

First we’d spend hundreds of thousands of dollars printing manuals and boxes,
and duplicating disks. If the release sold well, that would end up costing us
less than $10 per unit. If it didn’t sell well, that cost would approach 100%
of revenues.

Next, we would neec need to find a way to get our boxes of software into
actual stores. The easiest way was to convince someone like Ingram MicroD to
distribute our software. Once stocked with Ingram, any store could order our
product! That doesn’t mean they did though.

So the next step is to convince stores to stock us. We could hire and send
sales staff, or we could pay Ingram to advertise us prominently in their
catalogs, or we could even pay big chains to stock us in prominent locations
called “end caps”!

Now all we had to do was wait for the money to roll in! And wait was the key
phrase, cause even though our contract said 30 day terms, Ingram days were
kind of like their version of dog years, or better yet Elon schedules, where
everything takes at least twice as long. After 45 days you’d call one Monday,
and they’d say oh we don’t cut checks on mondays, only on Fridays. So you call
on Friday to find they only cut checks in Wednesdays! Then the next time the
darn CFO would be out of town, you can’t get checks signed without the CFO you
know. But no worries, Ingram always paid, never in thirty days but usually
within 6 months or so.

And they did all of that for “only” a 50% cut of our revenues!

Developers today don’t know how good they have it. For only 30% of revenues
(and a $99 annual dev fee) Apple will give you as many marketing pages as you
want in their store, will host your apps, and no matter how big they are or
how often you update them, and irregardkess of how many download them, Apple
pays for all storage and bandwidth costs.

And you not only have access to North American customers, but Apple has
international stores localized in dozens of languages you get free access to
at the click of a mouse. Do a Spanish version of your app and it’s in dozens
of stores for Spanish speaking countries in hours.

And on top of that, Apple provides probably the best payment processing system
known to man. It’s easy to sell for one time chatgesmp, subscriptions, by
feature, etc. and customers are super comfortable with the App Store because
it makes managing their subscriptions or canceling unwanted purchases is super
easy.

And even better, Apple tightly vets every app and every update before
releasing, which is a big reason why it’s the biggest selling App Store in the
world. Customers feel safe downloading your apps from the Apple App Store,
which helps sell more if them.

Apple paid developers over $20B the last year. There hasn’t been a software
market this lucrative and this easy to get into in the history of the world.

------
dijit
If steam can charge 30%, why can’t Apple/Google?

~~~
cjoelrun
You can release an executable that can run on Windows, Linux, or OS X without
Steam. You can't release an executable that can run on iOS or Android without
going through the App Stores.

~~~
tryptophan
Yes you can(on android at least). Amazon store exits. F-Droid exists.
Sideloading exists.

The issue is that the play store is shipped as the default and many people do
not know there are other options.

~~~
richdougherty
I think the Android market is large enough that it could support a healthy
second app market. The 30% pricing that Google is currently able to charge
indicates the complexity of creating a new market - a successful market
requires that consumers, app makers and phone manufacturers all act together.

This can be difficult since in the short term it's easiest for every market
participant to just use the Play store. Creating a new market takes upfront $
and is a risky business.

------
sergiotapia
Despite having literally hundreds of thousands of apps, I can't think of a
single app that is really "good" in mobile platforms, either ios and android.

Betterment maybe, polished.

Brave Browser looks like chrome so that's good.

But other than that, it's a race to first to market and they are all mediocre
to me. Should the barrier of entry be higher?

------
Theodores
'Fortnite' is an allegedly very popular game, the biggest thing since sliced
bread. This is going to be distributed without the app being in the app store,
not sure if that is just Android, but you get the idea. If the app (or game)
is as big as 'Fortnite' then people will just seek it out and get it from
source. The app store can be completely bypassed.

For everything else then the 30% app store publisher fee is the level playing
field you are dealing with. I do wonder if the realities of the 'Fortnite' way
of publishing is what is making people question the app store.

~~~
enitihas
It's just Android though. On iOS you don't really have a choice of
distributing outside the App Store, whether you are fortnite or even facebook.

