
Apple cuts App Store affiliate commission from 7% to 2.5% - petergatsby
https://techcrunch.com/2017/04/24/apple-cuts-app-store-affiliate-commission-from-7-to-25/
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coupdejarnac
For my apps, I used the affiliate program to get back some of the Apple tax.

So from my perspective, this is just the latest in a long line of developer
hostile developments from Apple.

Sidenote- I tried deploying an app to testers on Testflight for the first
time, and the app was rejected. What a complete waste of time. It was rejected
for not running on iPad properly and not working with ipv6. Not exactly too
frickin helpful when I needed to get the app out to testers/stakeholders asap.
Fortunately Tryouts.io don't want to waste my time.

~~~
RandomInteger4
What is the "Apple tax"?

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komodo
Apple takes 30% of the purchase price for app sales on the app store.

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s73ver
Which, in the days before the Apple App Store, when one had to contact Verizon
or AT&T to get your app available to cell phones, was the other way around.
They would take 70%, and give you 30%.

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stevefeinstein
How quickly people forget this. It went quickly from Apple is changing the
game, and giving developers an unprecedented cut of the sale of their apps.
And for their 30% they host it, they process the credit cards, they provide
the iCloud infrastructure and notifications for free, they make it searchable
in their store. No one said it wasn't a good deal.

But a few years pass, and now it's the Apple Tax? Some people could promote
and sell it themselves for less. A lot less? Maybe, maybe not. But most of us
could never ever do it for the 30%. Why does everyone think they're the
smartest one in the room these days? Odds are, you're really not. Sorry.
You're just not.

~~~
nojvek
Well appstore is a walled monopoly and has pretty awful discovery. There's a
huge tail and only the top 10 really make it.

They are using their monopolistic stance to kill others. But then it's their
platform and they can do as they please. They gotta make the $$$ to keep
shareholders happy with ever expanding profits.

Welcome to America.

~~~
Tanegashima
Just look at Android, despite having 85% or more of the smartphone market...

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bastawhiz
> If Apple drastically cuts this revenue stream, the company could end up
> alienating people writing for those sites.

Isn't this, in some ways, good for the consumer? While some legitimate review
sites may be impacted, this would imaginably help cut down on the number of
illegitimate spammy review sites that are pushing ad-ridden and malware-ish
apps.

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downandout
Nope. It will just cut down on the number independent apps being written
about. In their place, spammy apps that are paying affiliate networks - whose
creators can only afford to pay large per-install commissions though
aggressive revenue techniques (malware etc) - will be reviewed and pushed.
This cut will make things infinitely worse. The only apps you will see being
talked about on thousands of blogs/social media/review sites/etc. will be "ad-
ridden and malware-ish".

~~~
shostack
It may do so in the big picture, but number of reviews != number of quality
reviews.

I'd much rather read reviews from people not incentivized to write them, and
I'd rather not have to wade through all of the organic results from those that
are affiliates to find the ones that are not.

Spammy review sites are also Google's problem, and they do a lot to keep them
out of rankings. This won't hurt forums though where people candidly share
their feedback on apps.

I'm not clear how people using CPI installs through shady tactics like malware
will suddenly rise to prominence. I can't see an honest reviewer who is
reviewing for the sake of it (vs. the paltry affiliate commission) saying
"yes, I should review this scummy app that forced its way onto my device."

Instead, I think we'll see the rise of reviews from sites that monetize in
other ways such as traditional display advertising, email sponsorships, other
products, subscriptions, etc. Forums and social will also hopefully have less
spam as it becomes less financially viable for the spammers in question.

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zeteo
"The rent of land, therefore, considered as the price paid for the use of the
land, is naturally a monopoly price. It is not at all proportioned to what the
landlord may have laid out upon the improvement of the land, or to what he can
afford to take; but to what the farmer can afford to give." \- _Adam Smith_

The App Store developers are now farmers on Apple's domain, and their landlord
has figured out they can pay more.

~~~
babuskov
> The App Store developers are now farmers on Apple's domain

What do you mean by "now"? As far as I can tell, it has always been like that.

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greghatch
In a sense, yes. However, I think the farmers in this analogy were more
willing/able to be nomadic in the earlier days of osx and ios apps, where now
they are much more likely to make the land their permanent home.

This could be because the app store is more stable or reliable as a source of
income or from a realization that the Mac App store is the best/only way to
present information to a sufficiently wide audience - that wasn't really
something developers knew to be true in the earlier years I imagine - maybe
the thoughtful ones knew but the rest were still warming up their feet.

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mcast
As a consumer, I strongly dislike the direction Apple has taken since Tim Cook
assumed CEO. When I bought the new iPhone 7, the previous plastic headphones
case was changed to be made of disposable, thin paper. You could argue it was
an environmental move, but Apple now seems to care more about maximizing
profit and cutting costs in every possible area than providing a good customer
experience. I mean, the original iPhone even included a microfiber cloth to
clean the screen. And iPhone's seriously still come in 32GB for the base
model?

The company has an excess of over $250B in liquid cash but it decides to
stiffen its products to revolve around pleasing shareholders, not consumers.
Let's not even get started on the disaster of catering to professionals using
their MacBook "Pro" or Mac Pro line.

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DINKDINK
>the previous plastic headphones case was changed to be made of disposable,
thin paper

As a consumer, changing from a plastic headphone-delivery container to a paper
one was a positive. Such a large amount of plastic that was never used after
delivering the headphones to me and, I'd assume, other customers.

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coryfklein
I use the case every day, it's what keeps my headphones from getting tangled
and protects the cable from being pinched or cut.

However I think I'm the exception, I understand that most never use the
plastic case for regular storage/transport.

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caiob
Affiliate commissions generate a lot of fake reviews. I think this is a good
move by Apple; although I believe they should simply shut down the entire
program.

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Operyl
Ok, I've sat and thought about it for a bit but have yet to figure it out. How
would this cause fake reviews in the specific case of the App Store?

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porpoisemonkey
Write a fake or cookie cutter review about popular app X, link to app X in
your article and then collect commissions on people who buy it through the
link.

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Operyl
Ah I see. I was considering reviews only in the context of a purchaser on the
App Store writing a review on the App Store.

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protomyth
_Starting on May 1st 2017, commissions for all app and in-app content will be
reduced from 7% to 2.5% globally. All other content types (music, movies,
books, and TV) will remain at the current 7% commission rate in all markets._

So, the sites promoting Hollywood get to keep the 7%, but the sites promoting
Apple's developers get tanked?

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aczerepinski
Different rates make sense to me because if you're going to buy a movie or a
song, you can go to Amazon, Spotify, etc. Apple doesn't have a monopoly on
those sales. If you want to buy an app for your iPhone the App Store is
literally the only place you can get it.

~~~
accountyaccount
It makes sense from Apple's perspective, but kind of sucks for everyone else.

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jordansmithnz
A lot of comments seem to think this effects developers. It doesn't - just the
many sub par app review sites that make money with affiliate links. As an iOS
developer I wouldn't be sad to see these die out.

Some comments have mentioned the 30% cut that Apple takes. From my point of
view, I'd be making $0 without the App Store, so a 30% cut I was aware of from
square one doesn't seem unreasonable. Apple have never raised the figure, and
I don't think they're likely to in the near future.

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prawn
It effects developers who use the affiliate code on links from their
site/social to the App Store as a way of knocking the 30% down a bit.

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zackmorris
Is it time for a developer's guild?

Like if most iOS developers were part of the guild, and if Apple made too
drastic a cut like this, the guild would disable all of the apps in the store
for some number of days until a compromise could be reached between Apple and
the guild. Not to single Apple out - we seem to be seeing a lot of these
unilateral decisions in tech lately.

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spbaar
This does not affect developers, only marketing and blog sites that promote
apps and link to the app store.

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qzervaas
This is not true. Many app developers use the affiliate program from their
app's web site to claw back some of the 30% commission.

Minimise the house take, so to speak.

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notadoc
Who would want to promote something for $0.025 commission on a $1 sale?

The volume needed for that to be any sort of business model seems
extraordinarily high.

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TheRealDunkirk
Even at the original (3x higher) rate, the volume required seems pretty high
to make ant real money.

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lucaspiller
I imagine a lot of these sites are setup by people in developing countries.
Spending a few hours a week for an extra $10/month is good money for some
people.

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gressquel
The 30% fee robbery is the reason I quit app development, im actually happy I
ended up in SaaS business, so thank you Apple

~~~
qzervaas
What do you think is a fair price, given what you get from Apple for that 30%?

I'd be more than happy for it to be 0%, but you do get a few things for that
cut:

* Credit card processing

* Handling refunds (you need to do this manually on refund, just another thing to deal with)

* Some level of app discovery

* Distribution of app and files

My biggest problem with the 30% is that it is now the de-facto amount that
other similar services charge developers for everything now (Google Play -
there are others too that escape me now).

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tyingq
House commission can be compared.

Amazon charges 15% for most things. eBay is 9%. Etsy is 3.5%.

Software house commission is definitely on the high side. Interesting that
Steam, Apple, and Google are all at the same rough figure.

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scarlac
Some things don't compare well. Unfortunately, fee systems are some of those
things. I just looked up Etsy because 3.5% commission seems unrealistically
low (credit card fees are easily higher):
[https://www.etsy.com/help/article/136](https://www.etsy.com/help/article/136)

Turns out, they have several other fees on top. So it's not only 3.5%, it's
actually $2.4 a year per item. Add to that the credit card fees of minimum
3-4.4% + $0.25 per sale. On top of this, you need to add the shipping fees,
currency conversion fees and each platform have their own particular setup.

This all goes to show that you can't just randomly pick fees out like that.
The total cost to the user needs to be considered.

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wand3r
IDK. I feel bad for the devs but I hate being punted from safari to the app
store. If this cuts it down 66percent that would be awesome ux. Really sick of
the huge green button that says "proceed" and the tiny "no thanks" that takes
you to the actual site. Reddit is a perfect example

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elsonrodriguez
Does this means I'll get fewer random redirects to the App Store from crappy
advertising networks?

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johansch
It does fit the pattern. When in lack of product innovation, milk the existing
reveneue stream harder.

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blurrywh
OT: Imagine a web without affiliate sites. Would we miss any of their content?

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pascalxus
Also, you can look forward to the day when apple raises it's tax from 30% to
50%. I suspect this is coming. They're certainly powerful enough to pull it
off. Developers won't like it but there's nothing devs can really do about it.

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return0
Who used this?

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baldfat
Review sites good and bad. I feel like the good ones will be the first one's
out.

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astrodust
They can probably make more money through a YouTube channel than via affiliate
fees. That way you can capitalize on people who watched your review but didn't
buy it, or the app was free and you weren't going to get money anyway.

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benguild
This may mean that they’ll decrease the commission charged to developers to as
little as 10-15% this summer?

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phoenix3200
It's just greed. They're likely to do the reverse.

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bbcbasic
Capitalism

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killin_dan
And I suddenly don't feel the need to support iOS anymore

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CharlesW
Do you have a product/service built on affiliate commissions?

