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Apple halved app store fee to get Amazon Prime video on devices (bloomberg.com)
264 points by gumby 15 days ago | hide | past | favorite | 191 comments



Bloomberg itself reported in 2016 that fees were halved for all video streaming services: https://www.bloomberg.com/news/articles/2016-11-17/apple-is-... . You could take this to mean that rather than negotiate a special rate for Amazon, they changed App Store rules for a whole category on the store, informed by discussions with Amazon.

Hard to know if that's actually how it went down based on the info that's out there right now though.


A more recent change (April 2020) is that Amazon lets you buy/rent movies in their apps, and if you have billing info set up through Amazon it goes through that instead of Apple, presumably bypassing Apple's cut. If you don't, payment goes through Apple's system, probably at the reduced 15% cut.

Apple commented to 9to5mac that this is part of a "program for premium subscription video entertainment providers," and it has some strings attached - integration with the TV app, AirPlay 2, universal search and single sign-on integration.

https://9to5mac.com/2020/04/01/purchases-amazon-prime-video/

From a business perspective I can see why they'd offer this, integration with the TV app and universal search means that users access content through that, so you're putting in extra work in order to mix your content in with everyone else's and give up the chance to upsell whatever else is on offer through your own app. When they first launched the new Apple TV system with its TV app, streaming providers didn't seem very keen on the idea of integrating. Cutting to 15% in exchange lets the providers keep more of their revenue, and lets Apple create the integrated experience that they want to offer.


I wish those restrictions would include forcing providers to support AirPlay. Amazon Prime recently cut off airplay support (last year). ”Due to technical limitations and to improve the user experience“ but we all know it’s for business reasons or possibly DRM reasons. Netflix and other video apps followed shortly thereafter once they saw Apple didn’t retaliate. Now they all say you should use their official smart TV apps, but that doesn’t work with older Apple TV set-top boxes and it’s a worse experience all around regardless (at least in my opinion, I know some people disagree or don’t care one way or the other, but now it’s no longer an option for people like me who do prefer the AirPlay experience). AirPlay used to be one of the major selling points of iPhones for me, but now it’s only useful on pirated media where you have the .mp4 file...

(and to preempt the counterargument about just using Chromecast, for whatever reason in my experience across a multitude of devices Chromecast has always been extremely unstable, and often is more hassle than it’s worth. Nowadays I just put an iPad on my coffee table and watch that even though I have a huge TV sitting on the wall a few feet away)


Trade vape tobacco juice with your teenagers for pirate downloads, and give them an MBA when they cut you out.


netflix is even more wierd. you need to have an account to use it on iphone/ipad, because with that they can go around the apple fee.

the problem here is that they are big enough to do it, if you are small apple might not like it.


That’s how Amazon was until recently. You could rent a movie in your web browser and then watch it on device, or watch anything with your prime subscription, but otherwise it just told you videos weren’t available on the device.


It might not have been Amazon but HBO. This story related to the Apple TV was in 2015.

https://www.vox.com/2015/4/13/11561392/how-to-beat-apples-30...


My reading of the Vox story you linked is that Apple started Apple TV apps off at 15%, then the 2016 change standardized this rate to all video streaming apps (which makes it seem like it could have been a simplification of the rules overall, though that's not clear from either story).


interesting how bigger players are able to negotiate discounts/preference when arguably they are more suited to not need the discount - whereas 15% could be the difference between bankruptcy and breakeven or ramen profitability for a small startup/business.


In a system where money is power, and the economy encourages its concentration, you always end up with such unbalances.

The invisible hand cannot help here: demand will ask for cheaper prices (the 99% have a big stack of cash as a group, but a small one individually, so they seek savings), which the economy of scale will only make happen for the bigger players.

At some point, fair competition is not possible anymore.

Not to mention the ability to negotiate is driven by who you can afford to hire, who you know, how sustainable you are, etc.


> In a system where money is power, and the economy encourages its concentration, you always end up with such unbalances.

Is money really the only power? For all I know these companies depend on consumers’ attention and consumption. Not only that, the people who run them depend on continuous growth of those to keep their positions.

To the extent consumer interests can organize (which includes democratic, legal, informational organization and organizing consumption behavior) there are always ways out.

> The invisible hand cannot help here

Maybe invisible hand was never there to help. Maybe that is the origin of such a defeatist perspective.

Companies are not gods, markets are not forces of nature. They are more like semi-useful entities and processes that can also parasitize our stone age psychology for their own ends. It is on to us to realize our own part in that equation.


>Is money really the only power? For all I know these companies depend on consumers’ attention and consumption.

Which doesn't translate to any great power for smaller developers, who don't command much of consumers attention anyway. Try getting Amazon Prime, or Spotify out of the App Store and there will be a riot. Some smaller app few care about? Not so much...

>Not only that, the people who run them depend on continuous growth of those to keep their positions.

The people who run them will get their bonuses and golden parachutes even if they burn the companies to the ground. And after that they can retire or easily find other positions in different companies soon enough.

It's lesser employees that depend on growth to keep their jobs...


> Try getting Amazon Prime, or Spotify out of the App Store and there will be a riot. Some smaller app few care about? Not so much...

Which was my point. Their power doesn’t come from their money but the fact that their products are found useful by all those who would riot. I’m not saying it is necessarily fair, but it is not like that they are rent seeking in the app store, their apps are found widely valuable. If anything, app store was the rent seeker and now it is conceding due proceeds. Tough luck for the small developers who can’t band together for a lawsuit or a mass app-strike against that discrimination.

> The people who run them will get their bonuses and golden parachutes even if they burn the companies to the ground. And after that they can retire or easily find other positions in different companies soon enough.

Again, the point was the power is not in the money itself, it is in the growth obligation.

And you are wrong that growth is only a lesser employee concern, if anything having more captial means the opportunity cost of not growing the capital is much higher, so they are even more bound by the normativity of growth. Not necessarily growth of their immediate company, but any other investment instrument that eventually ties to the economy at large.


>Which was my point. Their power doesn’t come from their money but the fact that their products are found useful by all those who would riot.

That translates to money pooured though. Without huge VC investments there wouldn't be any Netflix or Amazon. And their huge followers mean more money, more resilience to Apple's demands (they don't depend on it 100%) etc. Whereas for a smaller developer house not of these are true.


>ability to negotiate is driven by who you can afford to hire, who you know, how sustainable you are

This is a good point, often subtly overlooked when discussing similar topics.


You mention economy of scale - that's why quantity discounts exist. It definitely is the invisible hand at work.


Isn't this pretty average business? Amazon (and the others) are bringing more business and get a discount.

AWS does this. So does monoprice (volume pricing). My local landscaping place does this (contractors buying more tons of rock get a better price). Home depot has "contractor pricing" when you buy multiples of things.


The examples you give are driven by competition forcing the suppliers to share their economies of scale. Those deals are available to everyone and the pricing is also upfront.

This Apple-Amazon situation on the other hand is a secret deal between two monopolistic powers, that's why it's coming up in hearings on anticompetitive behaviour. Such a deal is not available to everyone equally, it's not at all similar to Monoline / homedepot pricing.


Yes, but it's relevant because Steve Jobs seemed to claim otherwise in his testimony yesterday:

> During a hearing before the House antitrust subcommittee on Wednesday, Apple CEO Tim Cook testified that “we apply the rules to all developers evenly” when it comes to the App Store. But documents revealed by the subcommittee’s investigation show Apple senior vice president Eddy Cue offered Amazon a unique deal in 2016: Apple would only take a 15 percent fee on subscriptions that signed up through the app, compared to the standard 30 percent that most developers must hand over.[1]

[1] https://www.theverge.com/2020/7/30/21348108/apple-amazon-pri...


> Yes, but it's relevant because Steve Jobs seemed to claim otherwise in his testimony yesterday:

You have a unfortunate typo in your first sentence (since your excerpted text mentions the correct person: Tim Cook).


Steve Jobs passed away nine years ago.


But from that booth in the basement he dictated the testimony last week.

(To make this marginally relevant: apparently Amazon prime is producing a Foundation series)


I think you mean Tim Apple.


Yes, everyone has the same rules. If you generate tens of millions in revenue you get a discount.


Steve Jobs rose from the grave to attend a Congressional committee hearing?


He taught Hari Seldon how!


I think it definitely is pretty standard. What's not standard is, when you are buying physical goods like that, you have competition. You can source better rates.

With Apple, you have no competition. It is accept the pricing model, or leave.


You leave as in going to Lowes? Or going to Android?


Talking about mobile devices, you can't simply "go to Android". What you are purchasing when you pay Apple's fees are access to a userbase (among other things like the ecosystem). If you switch to Android, you are no longer buying the same product.

Talking about things like bricks, it would be more like if Home Depot was the only brick seller, and if you didn't like their brick terms, you could leave and buy instead 2x4s elsewhere.


The analogy that seems to make the most sense is a regional monopoly. You want to sell your bricks, Home Depot is the only retailer in the state of California but Lowes has a store in New York.

Somebody says "just sell them to Lowes" but in fact you already sell them to Lowes and Home Depot and Lowes is not going to buy any more than they already do if you stop selling to Home Depot, because the customers who can no longer find your bricks at Home Depot would have to move house to another state in order to buy them from Lowes.


I like that analogy.


Makes sense when monoprice can use one box, probably the same box, for 15 cables rather than one. Or drop ship you a case.

Hard to see the real economy of scale in this case though.


Passing savings onto the customer because someone got to use fewer packaging peanuts isn't the right way to look at bulk/scale/term pricing.

You don't get a better deal from AWS by committing to yearly billing over monthly billing because you saving them transaction fees.

You get a better deal because they benefit more from enticing a bigger commitment.


Value based pricing isn't based on cost, so discounts aren't either.


The question is, what do you bring to the table? Maybe the App Store runs on AWS and Amazon gives Apple a discount on AWS so Apple reciprocates for Amazon’s apps.

I don’t think their working relationship is all roses or anything—they were feuding a few years back—but agreements like this are negotiated because they leave everyone who agrees to them better off in some way. It could even be as simple as your app being so important that people won’t buy the phone if it can’t run it. Ultimately it doesn’t matter because for a new startup, you’re more focused on creating value from scratch than on optimizing your margins.


Interestingly you also can't purchase kindle ebooks on Apple devices at all, which I beleive is to skip the apple tax.


Yeah, that’s one of the ways that it’s not all roses between them. Amazon has played hardball with Apple too, sometimes refusing to sell their products.


I alone don't bring much to the table. But multiply it by thousands of developer and that "not much" starts to add up.

Apple should want to encourage a vibrant app ecosystem, no? Who knows how many cool or useful apps just never get made because the developers can't deal with the App Store.


Oh come on, the App Store is overflowing with Apps. The amount of options on there is overwhelming. If anything there’s too much competition and too many apps, driving down the prices companies can charge for premium products due to oversupply.

And don’t tell me that’s Apples fault as well, because the 30% on low prices makes businesses unsustainable. Which is it, does the 30% discourage companies from participating, or does the App Store 30% and all enable too much competition for premium apps. It can’t be both.


> Which is it, does the 30% discourage companies from participating, or does the App Store 30% and all enable too much competition for premium apps. It can’t be both.

Why are you phrasing this like a gotcha? "Too much competition" is your argument here, not mine. I think it's the former: the 30% discourages people (not necessarily companies) from participating.


But simultaneously the App Store is overflowing with apps made by solo devs and small teams. I'm sure you can find someone it discourages but en masse sharecropping on Apple's farm for most people seems to be good business.


It's all different markets. There are some apps which cost only $10,000 to develop but there is demand from a billion users at a price of $1. Those markets would still be saturated with apps even if Apple kept 99% of the money.

Then there are apps which cost more to develop but have demand from a smaller number of users. There the 30% can easily be the difference between viability and not.

More than that, it takes 30% of the revenue away from the developer, so even if the app exists, the developer has fewer resources to improve it, so it's not as good. Or then that market can't support as many developers and the customer is deprived of the benefits of competition.


Perhaps that app doesn't deserve to live. If the 30% forces you out you were pretty close to losing money regardless.


If you can't afford to lose basically a third of your income, you were pretty close to losing money?


Developers do like anyone else - they are free to charge 43% more to make up the difference. If you can’t get someone to pay $1.49 instead of $0.99 was your app that innovative?


And then 60% as many people pay $1.49 instead of $0.99 just to get you back what Apple took, so now you're down 40% of your original revenue instead of 30%. Not really an improvement, is it? If developers could actually increase overall revenue by raising prices this way they'd have done it regardless.

> If you can’t get someone to pay $1.49 instead of $0.99 was your app that innovative?

Well yes, because you had a large number of people -- enough to keep you in business -- willing to pay $0.99, or to pay $99 but not $149, and now all of the value of your entire business to both you and the customer is destroyed.


So if you had a large number of people, you could support a lower cost. The software and game market survived selling games at retail only getting a 40% cut.

Apple customers are by definition not price sensitive. If they were they wouldn’t be Apple customers.


> So if you had a large number of people, you could support a lower cost.

Everybody already knows that which is why the original price was the expected profit-maximizing price. There is a price which is optimal because above it you lose more customers than you make in unit margins and below it you lose more unit margins than you gain in additional customers. If Apple then takes 30% of that, you can't get any more by changing the price up or down or you'd have already done that from the start.

> The software and game market survived selling games at retail only getting a 40% cut.

Only the ones that did. Others didn't.

> Apple customers are by definition not price sensitive. If they were they wouldn’t be Apple customers.

Then why do any apps in Apple's store cost $1 and not $100 or $100,000? If the customers were actually totally insensitive to price that would surely be more profitable.


Because there are free and cheap alternatives. People are more than willing to pay for subscriptions to streaming services and productivity apps from Microsoft and Adobe.

Even services like Hey that are mostly used on phones are doing well.


Or more realistically for that category of app, ask them to pay $14.99 instead of $9.99.


"Overflowing" is a relative term. There are something like a billion websites in the world; compared to that, a million iOS apps seems downright paltry.


The Appstore is like big-cable packages: a billion channels, and nothing to watch. 90% of those apps are shovelware and addiction machines, because that’s what the Apple-imposed model effectively incentives.

It’s very likely that breaking up the appstore would change that, and we could get a software market closer to what we see in other segments, free to innovate and generating more winners.


Have you seen literally any other software segment? This isn't just the app store, this is also the play store, webpages, windows store apps, playstation games, ...

The most successful apps are the ones that make the most money: skinner box slot machines with a credit card system attached. Your idea that software should have things like "intrinsic quality" or "benefit to the user" is not as important as how much money it makes, and if you put more effort into mechanics or gameplay instead of additional monetization techniques, you're losing out.


Don’t put words in my mouth. Every sector has winners and losers, that’s not the point. The point is that free platforms allow people to ALSO build different stuff and redefine what we use machines for; the appstore does not.

On the desktop, one can invent p2p or a new type of browser or a magic app that makes unicorns out of tcp packets. On the appstore, entire areas of development are forbidden, in order to guarantee a constant stream of cash to Apple and Google.

On the desktop, if you make a life-changing app, you get competition. On the appstore, if you threaten Apple/Google dominance, you get banned.

Appstores make a mockery of the free market; anybody who lived through the 80s/90s “wild west” of computing should see them for the obscene freedom-destroying schemes that they are.


The consumer market has had plenty of chances to buy into open platforms and choose phones with multiple stores and the ability to side load whatever they wanted. Those options have always been there from before the iPhone even. I was side loading apps on to my Palm Tungsten E.

The fact is the App Store offers the best experience and the best apps. Side loading apps outside stores isn’t a viable business beyond very narrow niches, we’ve seen this happen.

App stores offer a scale alternatives just can’t reach, which brings investment and therefore options in the consumer space that open platforms cannot match. We’ve been running the experiment for over a decade now and the results are in.

App,Stores have crated staggeringly huge markets. That has enormous value for developers take that away, and how are customers and developers going to get connected? We’ve seen how that works out. The resulting markets aren’t 10 time smaller, or a 100 times smaller, they’re thousands of times smaller. I was going to say 30% is peanuts. It’s not, but I do think it’s a reasonable price.


> The consumer market has had plenty of chances to buy into open platforms

No, post-iPhone it did not. Android is just an inferior experience in the fundamentals, and that's geared towards the Play Store too anyway. There is no decent alternative on the market that offers a truly open platform - none. And of course by now it's also a chicken-and-egg situation, because the mainstream has been thoroughly locked-in, so even if such a platform appeared, users and developers wouldn't give it a chance.

I should be able to choose my appstore, my browser, my programs, on any platform.

> The fact is the App Store offers the best experience and the best apps

Then Apple and Google should not be afraid of allowing interoperability and replaceability of their appstore and their fundamental apps. You cannot objectively decide what is "best" when alternatives are banned or handicapped.

As somebody who went through the browser wars, I find it really depressing to see the battles that were won then are now being thrown away so carelessly.


There is precisely zero stopping you from distributing through F-Droid or Amazon Apps or another third-party app store, or even sideloading... Except there's no customers. There's no market. The user's took their freedom of choice, and chose app stores, because freedom is scary and the wild west doesn't get stuff done.


On iOS, which is by far the most lucrative market since Apple captured the high end with a superior experience in the fundamentals (the phones are better, the OS is smoother, etc etc), there is no third-party appstore. None. Will people trade UX for freedom? Absolutely, in the same way they eat at McDonalds because it's better value for money. It doesn't mean McDonalds is the be-all of food, or that we should accept all other restaurants will die and allow McDonalds to run a racket whereby nobody can serve a burger in the whole city.

On Android, half the system is geared towards integration with the Play Store. It's like your fridge only had McDonalds-shaped holes and was preconfigured to order McDonalds for you in a flash. If you wanted to cook, you'd need to order a stove somewhere, sometimes you'd have to learn how to install gas pipes too. Are you ever going to learn to cook, in those circumstances? Fuck no, you're going to click a button and order McD.

There is no market because the platform owners actively ensure that would be the case. They looked at the 90s and thought "Microsoft didn't make enough money, they were too liberal". That's just shameful greed.


> captured the high end with a superior experience in the fundamentals (the phones are better, the OS is smoother, etc etc),

And many it is a superior experience because of the restriction to one App Store. Everywhere else seems to have tons of malware.


Or it could be that shovelware and addiction machines are exactly the most cost-effective form of phone apps regardless.


And if you had the potential to bring in as much business as Amazon, as an individual, you probably get preferential treatment. But those thousands of developers operate under thousands of brands in regards to the App Store, not one brand, like Amazon does. An app like Prime Video brings in millions immediately, enough to guarantee a volume discount, while an individual could just wind up being a drain on Apple’s time and infrastructure for quite some time.


Yeah, if it turns out that a standard rate of 25% would work out better for them than 30%, they should lower the rate to 25%. Is the current app ecosystem not vibrant enough? I think they’re doing fine as it is but it’s very literally not my business :)


The worse case of this is with medical billing in the US. Health insurance companies get discounts while individuals do not...


If you do not have insurance, then most medical bills will be discounted. However if you have insurance, they won't give you a discount beyond what the insurance company negotiated.

I'm part of a healthshare, which isn't considered insurance, so whenever I have a health care bill, I ask for a "self insured discount", and most places give anywhere from 10-50% discounts (the more common in my experience being closer to the 50%). In my experience labs (blood work) tend to have smaller discounts (10%) compared to hospitals (35-50%).


I think your parent is referring to the fact that most medical bills are not discounted until the individual haggles after the bill is already sent. The sticker shock[1] can be quite something.

You seem to already know how what to tell the billing department but I'd wager most Americans don't.

Example: some hospitals have tried taking their debt collections against low income individuals/families to court and have gotten wages garnished. Those same class of defendants have won something close to 100% of cases with the help of pro bono lawyers who help get those bills adjusted to something reasonable. The list price for medical services in the US is ridiculous, but that's because not everyone knows that hospitals don't expect almost anyone to pay list price -- and also because those hospitals get to write off the discounts as losses for tax purposes.

[1] https://www.vox.com/policy-and-politics/2019/1/7/18137967/er...


Yeah, but the negotiating position is "if you don't discount this significantly I won't (and probably can't) pay it and you'll get pennies when you sell my bill to a debt collection agency." It's not "I think x,y,z should are overpriced."


> and also because those hospitals get to write off the discounts as losses for tax purposes.

If they're following accrual accounting, they earned income (at list price) when they performed thr procedure. If later it turns out they accept less money for it, the discount should be subtracted from their taxable income to reconcile. Most business don't use cash accounting.

It's not rational to be excited to write off a discount; yes, it reduces your taxable income, but only because it reduced your actual income.


> It's not rational to be excited to write off a discount; yes, it reduces your taxable income, but only because it reduced your actual income.

You seem to be approaching this from a purely accounting technicals perspective.

My complaints have more to do with the massive distortions that make medical goods/services a very opaque market and creates the ability for profitable businesses to write off fake losses for tax advantages.


> My complaints have more to do with the massive distortions that make medical goods/services a very opaque market

I agree it's a mess. I didn't comment on that, because I agree with it.

> creates the ability for profitable businesses to write off fake losses for tax advantages

I disagree with this part. It's not a fake loss. It's reconciling projected (fake if you want) income with real income. Any business filing taxes with accrual accounting that invoices with full price and accepts a discounted price on payment (or sends to collections at a discount) is going to have the same thing: recognizing the full invoice as income, and then taking a deduction for the discount when settled.

Why am I picking on this technical detail? For one, this is a technical forum (I'll show myself out). But importantly, a comment lamenting a real issue (opaque market) and normal accounting practices makes a confusing argument. Switching hospitals to cash accounting isn't going to make the market less opaque.


Sure they do. I’ve negotiated discounts on medical bills a few times.


It’s not the same to discount a bill (that you legally owe) compared to an insurance company having pre negotiated prices.

If a healthcare provider decides to lower the amount they claim you owe because they believe it will cost them more to pursue you more than they will receive, that’s different than agreeing to a price before the services or products are exchanged.


I don't know about your insurer, but whenever I get an EOB, I see the price the doctor charged and the price the insurance paid. The provider agrees to accept the lower payment, not the price they charged. Individual negotiation is the same! At a 10k foot level, insurance companies are just an outsourcing of that negotiation process.

It feels different, but it's really not. It's perverse that our system's incentives are such that doctors are incentivized to overcharge and that there's an expectation that the price will be negotiated down to the actually-desired price, but that is how it works. It's frustrating, but if you're letting them tell you the sticker price and then pay full sticker price, you're not being lawful good, you're being played for a sucker.


Sick people are expected to fight? Not sure many could fight.


Sure, and that’s exactly what I’ve done, too. I have agreed to discounted prices, with surgeons, before the surgery was performed. I am not an insurance company. It only requires asking.


I haven’t had success with that. It’s hard enough to just get procedure codes out of them so that I can ask the insurance company how much something will cost.


I never asked for procedure codes and it’s possible that since Obamacare, health care has gotten so bureaucratic and regulated that it’s no longer possible to do what I did.

I never dealt with “procedure codes” and we didn’t have insurance. I just called the doctors office after finding out surgery was needed but before it was scheduled to get a cash estimate for the procedure and negotiate the price, and we made a deal, and then during one of the pre-op consults the doctor herself gave us a new written estimate with even more of a discount.

For a different procedure, a different surgeon just gave us an estimate based on the insurance rate and when I asked if he could do more, he just said, “well if you do XYZ for the rest of your life you could just not have the surgery” and walked away like a rock star. Which is fine, hilarious in retrospect, but the insurance rate was enough of a discount and his point was valid.


That might happen with elective stuff like LASIK, but nowadays, I doubt any healthcare providers that are part of larger groups would play ball.

As far as I can see, all the hospital systems are combining, doctor groups are combining, and you never negotiate with a doctor directly at these places. The doctor sells their labor to the company, the company sells healthcare to the public, and you deal with the billing department about any money issues.

I know the doctors are monitored for how much revenue they are generating which corresponds to the CPT codes and whatnot they use, so everything is billed based on that.


Yeah, it seems like the landscape has changed a lot unless you opt out of the system entirely like Surgery Center of Oklahoma.


Billing has been screwed up long before the ACA. Source: I used to write billing code calculation software.


My experience has been the CPT codes change a lot once the procedure is complete. I even had an estimate for a surgery at $1800, but the final bill (including everything like anesthesia), heavily discounted because I'm in a healthshare (not considered insurance), came out to ~$10k (instead of ~$18k without the discount). Nothing went wrong/crazy in the surgery--and it was a fairly standard one. Once I paid the 10k, several months later I got ~$600 back saying I'd over paid, but they didn't include an explanation.

Hospital pricing is a strange beast.


Yikes. Stories like this make me increasingly think about options like Surgery Center of Oklahoma if I ever need a procedure done and I have crappy or nonexistent insurance. (https://surgerycenterok.com/)


From 1000% markup to 500% markup?


I’ve gotten the exact same price the insurance company pays pretty consistently, and sometimes even less.


I've attempted to negotiate medical bills and gotten no where in the past, so that's another anecdote.


Did you have insurance? If you do not, they're a lot more willing to negotiate.


Yeah, to clarify, all of my successes were before Obamacare.


Welcome to earth. You get what you can take, not what you "deserve."


Isn't the old line that you deserve whatever you can convince people to give you?


The Amazon deal appears to buttress lawmakers’ claims that not all apps are treated equally, a contention Cook rejected during the hearing.

“That is not correct,” Cook said when asked if some developers are treated differently. “We treat every developer the same.”


"We treat everyone the same. Everyone is equally allowed to use their position as a trillion dollar business to negotiate a deal."


I mean you don't have to be a trillion dollar business. Your ability to negotiate a deal is mostly how valuable you are to Apple, or at least how valuable you're perceived. If Apple doesn't need your business you're gonna be stuck paying full price.


I think this is in essence the problem. Well put.


It's the economic version of "those who need love/affection the most are the least likely to receive it".


Would you give the same prices to someone who is buying a lot from you versus someone who is buying a little?

I’ve never seen a seller (of product or services) not give volume discounts. If they didn’t, they would be out of businesses quickly, as I’m sure other sellers would be more than happy to discount.


Celebrities get free gift bags full of stuff they could easily afford, in order to promote their brand.

Frequent flier programs give out more bonuses to people who fly a lot and are probably rich, to incentivize them to fly more.

Companies give price breaks to huge volume buyers.

Is this behavior, in concept at least, not familiar?


Bigger players don't necessarily have bigger margins.


It's monopolistic behaviour on both sides.

Apple gets away with charging a flat rate of 30% on the App Store because there are no reasonable alternatives (Apple has worked hard to ensure that there are none)

Amazon gets away with negotiating this down because there is no reasonable alternative.

In my opinion this provides evidence that the App Store cut should be regulated.


The ancient rule of "them that gots is them that gets".


For content distributors whose margins are far less than 15%, it's a death sentence that means only Apple is allowed to distribute content.


There is an existence proof that isn’t true. All of the streaming providers have apps for the AppleTV - even those that don’t allow in app subscriptions.


And that seems like an equal competitive footing to you?


What other competition do you want? Any app gets a placement on the AppleTV once it is installed and any app can but is not required to integrate with the TV app.

Netflix doesn’t integrate with the TV app completely (Netflix’s choice) but when you search for a TV show or movie, if the app is installed , Apple tells you when it’s available for free with one of your third party subscriptions instead of steering you to buy it from them.

I can say “watch DareDevil on Netflix” from the AppleTV and it launches Netflix. If I do it on my phone there is an “open in” button and it lets me choose Netflix.


Quantity discounts are normal. The reason is pretty simple - your costs to deliver a quantity product is lower than an individual one.


“... there are many rivals trying to woo mobile developers and consumers.”

Wow. Many? There are only two platforms, Android and iOS. Android barely has any competition with Play and iOS has no competition for the App Store. So who are the rivals?

The Play Store and the App Store do not compete as they cater to distinct audiences.


Cook said this defensively in regards to a question during the anti trust hearings. The context makes it even worse, because his additional examples were the play station and Xbox platforms, which obviously aren't mobile app competitors.

It was a prepared canned response that barely addressed the question, but since each rep only gets 5 minutes to ask questions, Cook (and others) could basically answer however they wanted because there's no time for follow up.

The anti trust laws were designed to prevent exactly this type of action the article is talking about, but we've given big business so much political sway I don't have much faith the laws are enforceable at this point.


Even Cook underplayed the mentality these guys are working with. Yesterday, Zuckerberg essentially said that his definition of Facebook's competition includes running into a friend at the grocery store.

The wider they can cast the net, the easier it is to fend off antitrust controls, or at least the threat of them, as far as their stockholders are concerned.


Apple's market share when it comes to streaming video is not as dominant as it is for mobile apps. Samsung, Android, and WebOS platforms out-share them by quite a bit, Amazon had already established their app in those markets, along with the success of the firestick.

This was all about subscriptions, and the customers weren't watching or had stopped watching on apple devices in 2016/17, so Apple was willing to concede the rev share % to retain subscriptions that started on their platform. Now Apple gets to count those numbers as subs, even if they aren't watching on Apple devices anymore.


I think in practice the web provides the biggest competition to any native app development, but of course that’s not really a commercial entity trying to “woo” developers.


In this case, Amazon does run its own app store. And as far as streaming platforms go, it sells its own devices (that use Amazon's app store).


This could be the nail in the coffin for Apple with regards to Spotify's antitrust complaint in Europe.


Spotify reportedly got the same deal.

Spotify hasn’t allowed in app purchases for years.

Spotify’s complaint was that Apple gave Apple Music special treatment when it came to its platform like how Siri integrates with it and how it was Spotify couldn’t stream directly over the Apple Watch.

Apple opened up both to third parties over a year ago - and Spotify supports neither.


Spotify supports siri. "Play AC/DC on Spotify" works just fine.


But "Play AC/DC" plays them in Apple Music, not your preferred (or currently used) music player app.

There is no way to set that I prefer Spotify, and I've seen a few occasions when CarPlay showed Apple Music when I started a car (might be related to not having Spotify app in the background, but I never digged deeper).


This also came up yesterday in the antitrust hearing, wrgt Alexa and Amazon Basics defaulting.


For comparison, both Amazon Alexa and Google Assistant allow you to specify different default music services from their own offerings.


That’s very recent...and still no standalone Watch support at least as of April.

https://community.spotify.com/t5/iOS-iPhone-iPad/Apple-Watch...


Spotify’s Apple Watch app terrible because Spotify wants it’s that way. Other music streaming apps did build really good Apple Watch apps already[1].

I believe that Spotify just don’t want to integrate well with the system so that they can use it as a leverage.

[1]: https://9to5mac.com/2020/04/29/pandora-shows-spotify-how-to-...


That's because of iOS was never good at inter app communication (Android's version of intents) and that made Siri a worse experience for users and ultimately doomed it in the assistant wars.

I don't think Apple management sat down and thought, right, how do we kneecap competing music streaming providers? Okay lets build Apple Music support for Siri but not Spotify.

It was just that no iOS apps had deep Siri integration and they've been one-offing implementations for common usecases like timers, alarms etc. for the longest time. I assume someone got a project funded by the Music org to go one off the Apple Music usecase as well and here we are.


Someone just posted that Spotify does work with Siri on the iPhone and Siri on the watch uses the same system so that kind of throws the argument that Siri doesn’t support it out the Window.

Apple also has been adding third party intents for years.

With Shortcuts users can add their own Siri actions and third party apps can exposes programming actions.


Yes - the historical context was my point. Things are fine now, Spotify gets the same capabilities as Apple music, so there's no issue.

The thing they (Spotify) are complaining about now with the EU antitrust case is the 30% gate keeping toll Apple charges which is an entirely different thing.


Spotify doesn’t allow in app purchases. So Apple isn’t getting any cut.

Spotify complained that Apple wouldn’t allow them on the watch. But they still aren’t taking advantage of it even though Pandora has.


That's very new. Until recently all you got was an excuse that it doesn't work and a suggestion to use Apple Music instead. It doesn't work on my HomePod yet.


HomePod support for third party music services was just announced this year.


In my mind, this is basically a form of network peering, but on a biz-dev level. These two tech giants are peers in many ways, such as customer reach, developer footprint, company size, global stature, etc. Amazon wasn't able to get a zero-fee arrangement, but half off is pretty good.


I wonder if that was before or after they banned AppleTVs from amazon.com


Something I'd like to know about antitrust laws around the world:

Suppose two major companies work together, such that their collaborative effort is monopolistic. Is such a collaboration subject to antitrust intervention?


That’s called a cartel. https://en.wikipedia.org/wiki/Cartel: “Most jurisdictions consider it anti-competitive behavior”


Most antitrust laws are binary "is it or isn't it a monopoly". They're usually concerned with abuse of market power.

In the US, we have much more stringent antitrust laws than actually get enforced by the DOJ. So the answer is, yes they're subject to antitrust intervention, but only if the people responsible for antitrust intervention choose to intervene.


That act (verb/adjective) would be “collusion”, “fixing” (like prices), etc., and the companies called a cartel (noun). It is anti-competitive behavior because it reduces or eliminates free market competition, and is illegal (or at least subject to government scrutiny) in most countries.


That would typically be known as a cartel and would typically be illegal. Typically.


You are describing a trust.


A trust is a group of companies on the same business. But what about an agreement between a provider and a supplier that gives one of them a huge advantage to the point of crushing competitors? Would it be also covered by antitrust laws?


They don't have to be in the same business, just organized to suppress competition. The original trusts were groups of different companies that shared board members (trustees).


The takeaway for me was this:

"The deal, announced in December 2017, also allowed Amazon’s video service to integrate with Apple’s voice-activated digital assistant, Siri, and the iPhone maker’s TV app, which launched in 2016."

To me this means that development for Siri is partly bound to whoever's willing to pay Apple enough money. This is really disappointing from the accessibility side.


It's the other way around. Amazon didn't want to be integrated since that means you're just in a bucket of content that Apple controls and Amazon has no opportunity to control the user experience or offer additional upsells.

Part of the deal for the reduced cut was that Amazon _had to_ do these integrations, not that they were allowed to.


Amazon didn’t have to. Netflix doesn’t. Apple is a lot more lenient about which apps can get on the AppleTV than Roku. Roku wants a cut of ad revenue and forces each provider to make special deals.


Amazon agreed to do it in in exchange for a lower revenue share with Apple. This is in the article. All I did was summarize what was said in the emails.


It was a mutual deal. Netflix chose not to. Other streaming providers choose not to have in app purchases at all and still integrate. Either way it’s the provider’s choice.

Apple really wanted Prime so it made a deal.


Apple has publicly available intents that any developer can take advantage of.


The crazy thing is that Apple not only gets a 30% cut of app revenue, but the development work comes at essentially no cost to them.

Would be interesting if a bunch of powerful app makers banded together and threatened to pull their apps. If there's a way to impact iPhone sales, which is typically the entry point to buying other Apple products and services), maybe Apple would lower fees.


Clones would immediately take their place. If done publicly, Apple would not capitulate. iOS users are still the premium ARPUs


It’s an open secret that they did the same for Netflix, Hulu and Spotify.


And Amazon, I’m pretty sure, gives AWS discounts to Netflix despite directly competing with them. And Apple gives a lot of these companies discounts to buy Macs for their employees.


Why is everyone acting like Apple's App Store is this democratic place that should abide by some arbitrary rule of equality? They own the thing _and_ they make the rules that govern it. They can do whatever they like and really don't have to answer to anyone.


Because antitrust laws are a thing.

If you make a new phone OS tomorrow and lock it down to a single store with a 99.99% cut, no one cares and it's not illegal. You don't have oligopoly.

When Apple or Google get a little too strict with their app stores, things get a lot more ambiguous.


But the 30% cut by Apple has been standard from the beginning. Why does that suddenly come into question once they have been successful? Serious question, I'm not an expert in antitrust laws.


It isn't the size of the cut that's the problem. Focusing on that is misdirection.

The problem is that Apple require vendors not to advertise, link to, or even mention that other payment methods are available outside of the walled garden.

That's the stunning uppercut. The size of the fee is merely a follow-up kick to the nuts.

No doubt Apple's PR team have been feeding Bloomberg background that pulls them towards only thinking about percentages, because "high prices bad" is an much easier story for lazy hacks to write than "Apple's T&Cs are distorting a marketplace and forcing vendors to mislead consumers", and much easier for Apple to leak about and subsequently respond to without addressing the core problem, especially when they're eventually forced to sit down and haggle with consumer/anti-trust regulators.


> Why does that suddenly come into question once they have been successful

Because people don't have a choice. If you want to build a successful software as a service offering in 2020, chances are you need to offer apps for it. Those apps have to be available for iOS and Android else they're dead on arrival, especially for iOS.

While Android lets you easily sideload apps (but even that is rarely enough as most users won't deal with that), iOS is a very strict walled garden. You have to play by the rules, and the rules are finicky and vague.

Like in the Hey mail saga, Apple's whim can make or break an entire business. That's not okay.


Abuse of market power is illegal in many jurisdictions because it places the consumer at a significant disadvantage.

By obliging merchants to mislead the consumer about pricing, Apple have very likely distorted the marketplace. Which is why half the competition regulators on the planet have a file open on Apple right now.

So no, corporations do not have carte blanche to do whatever the fuck they want. See also: Uber.


It isn't, but it should be more democratic.


Context for those who missed yesterday's anti-trust hearings:

Tim Cook, the CEO of Apple said that Apple treats developers equally - under oath. The problem is that Amazon got a special deal. Baidu (the Chinese Google) got a special deal where Apple fast tracks App Store approval for them and have special assigned Apple employees for their app(s). This might be one of the evidence that Apple's CEO lied under oath.


Does Apple treat other video streamers differently than Amazon?


Have they publicly announced the availability of the special deal Amazon got, and the criteria for qualifying for it? Are they proactively notifying everyone who might qualify for it? Are the rules written broadly enough that a wide variety of smaller developers might easily qualify, rather than just the behemoths? If not, then these secret negotiations are not treating all developers equally.


> Does Apple treat other video streamers differently than Amazon?

Apple changed it's rules for everyone in this category to get Amazon onboard with their video service.

Why should it take another Amazon in another industry to change rules for that industry? Why did Apple change it's rules in an entire category so that they can get Amazon onboard? Because Amazon is too big and has leverage over Apple? Isn't it?

Well this is precisely why good democracies and competitive countries have anti trust laws.

This also shows that for some arbitrary categories to please companies that have leverage over Apple, Apple will change rules at whim. This also indirectly indicates that Apple does not treat all developers equally - if you look at this in good faith.


Probably because there are other, more popular app stores. You can draw a line around anything --- the icon that appears when you boot a Macbook, for instance --- and claim that Apple has a "monopoly" over it. You have to persuasively connect it to harm to consumers, which is difficult given the vibrancy of competition in mobile apps.


Tim Cook specifically mentioned the 15% yesterday at the hearing for a certain type of subscription app, which Amazon Prime falls under. Not sure about the Baidu case.


There was even a followup question about it, and Cook's response came down to (paraphrased) "if another developer could meet the conditions Amazon met, they'd have access to the same deal".


I wonder how much of this is the mode being based around low value one time purchases, that have now been replaced with subscription models.

.30 cents on a single purchase makes sense from a marketing cost perspective, it just seems like apple isn’t bringing enough to the table to justify the 30% cut after the initial sign up.


Edit: Users below have helped provide context, thanks.

Maybe I'm missing the news here -- I'd be happy if someone could correct me or point out what I'm missing for why this is a big headline.

If you replace the company names with "Ma & Pa's Pizza" making a deal with "Dad & Sons Grocery", but keep the article the same (Ma & Pa pay 50% less of a fee for shelf space, Dad & Sons Grocery benefits from the great pizza Ma & Pa make), I don't see it being a Bloomberg story. My analogy might not quite line up (I have 0 clue how grocery shelf space is allocated), but the sentiment remains. Two companies negotiated, they had things to offer in lieu of the standard monetary compensation, and they came to an agreement.

If I am able to leverage assets other than money (intangibles like reach, brand, etc.) to lower the cost of something I am purchasing/becoming involved with, and the other company agrees to lower their cost because they will reap the benefits of the intangibles I offer, why is that wrong? Is it because of the scale involved here?

Two companies negotiated fees. What am I missing here?


That yesterday Tim Cook stated a bunch of times under oath that they treat every company the same with regards to App Store policy and fees. Except Jeff Bezos got a special deal directly from Tim Cook.

So this is potentially evidence of perjury.


That's fair, he probably shouldn't lie under oath I agree.

The article has a very small paragraph about that, and the remaining 95% was just discussing that a deal was made. I guess since Bloomberg gave much more weight to the fact a deal was struck (rather than weighting the fact that Cook potentially lied under oath), I was focusing on the wrong thing.


It's pretty risky for a news organization to directly accuse one of the most powerful men in America of a crime. It's much easier for them to present facts and let people read that out of it. (And I nearly guarantee you the Congresspeople who spoke with him yesterday will see this article.)


Agree. Thanks for providing the context, I have not been watching the hearings live.


Unless, of course, the same deal was offered to all video streaming companies.


I hope this amounts to something. Apple and others need to be held accountable, especially when there is blatant evidence. But I honestly think nothing will come of it, since Apple is America's golden boy, investors love Apple because of it's growth and consumers love their products, bordering near fanaticsm of the brand.

Just look at HN and read the comments regarding Apple. Any thread which speaks something positive about Apple (even when it is fake news, like today's false claim about the App store refunds) gets upvoted to the sky, but dare say something negative about Apple and people will hunt you out of the woods.

Devs sure love their Macs. P.S. Windows all the way


I have my doubts Apple (or Tim Cook) is going to end up being taken down for committing perjury. But these Congresspeople will be making recommendations and/or introducing bills on regulating these companies, and my guess is that their distaste for being lied to may tinge their attitudes as they legislate.


> I have my doubts Apple (or Tim Cook) is going to end up being taken down for committing perjury. But these Congresspeople will be making recommendations and/or introducing bills on regulating these companies, and my guess is that their distaste for being lied to may tinge their attitudes as they legislate.

Based on what’s happened with Facebook and Mark Zuckerberg so far, which is nothing substantial for the company or him, I wouldn’t worry about Apple or Tim Cook.

I do believe that Apple has arbitrary policies with too many twists and turns on the App Store and that it’s high time it cleans up that part sooner though.


There's a big grey area between two family businesses doing deals to help each other out and two dominant market players tipping the scales in their own mutual favor to keep out other players.

Problems ensue when the behavior is anticompetitive, and when one or more of the parties engaged in the behavior have a dominant position in their market.

This played out with Microsoft's abuse of its dominant position in the operating systems space to advance their browser ambitions.

Apple presents a really interesting case here, since they pointedly do not have a monopoly on mobile app stores -- Apple's mobile business is a minority player measured by device count, and a majority player by revenue. IANAL, and not even really an armchair one, so I really have no idea if their majority-revenue position matters, or is sufficiently dominant, etc.


Definitely agree that my analogy is on the opposite side of the spectrum, but it was the best I could come up with to try and establish where I was coming from with my question.

As another user helped me understand with the context of this is there is a bit of an issue with Cook's denials to Congress vs. what's actually happening. And your point regarding scale is certainly understood.

I suppose I'm just having trouble with where the line gets drawn, so to speak.



Amazon could say 30% commission on selling all Apple products on Amazon!

Or reduce the app store cut.


Apple don’t sell their products on Amazon. Third party distributors do, but Apple couldn’t care two hoots about that. Chances are it would hit Amazon’s revenue more than Apple’s.


But they didn't say that. I don't understand why you are making up fantasies.


I said "could say" not "did say".


Wow so all I need to do to make the app store viable is have a brand worth more than anything else on the app store.



[flagged]



And Cook is being honest: everyone can negotiate with Apple about their fees.

Don't be shocked if Apple doesn't budge, because you actually have to offer something to make it worthwhile.


This is really, really bad for Apple.


How is this different than volume discounts for anything else?


It's not, it's just how negotiating works!


Giving a discount to a big spender is normal, but lying about it to Congress and elsewhere is not.


Cook didn't lie about it at all. People who didn't watch the whole session are taking one line of his out of context, and ignoring the followup that dealt specifically with this issue.

That, of course, is the problem with these open testimony sessions. Legislators get 5 minutes to pursue random agendas, and everyone knows that the sole purpose of the enterprise is to generate sound bites for people to argue about later on. The real fact-finding is done in writing, and by staffers, not legislators themselves.


That's not always true; sometimes the Q/A periods are used to establish an evidentiary record, unless that falls under your definition of 'sound bite'. The chance to ask unrehearsed questions of a tech company CEO who has to answer on the spot is valuable, even if seldom used to its full potential.


Worth watching the scenes from The Aviator: https://www.youtube.com/watch?v=KMYSaImuIgo

The real hearing of Mr. Hughes: https://www.youtube.com/watch?v=GDkTkpoyfL0

I'd be very surprised if Tim Cook lied in his testimony. Politicians seem to have a major problem with big tech,. They just don't understand any of this and hopefully they don't make the same mistakes they made with Bell, that basically fragmented the OS stack and caused more problems than it solved.


Not worth.


Uh, just be certain that the congresspeople already knew the answers to each question before they asked it and the purpose was to be able to tick a box saying "..and even in light of these FACTS, the company denied it on 7/30/2020 before this Committee" thus making it easier to condemn them and garner support for remedies/penalties already under consideration.


Lying to Congress is (I assume) illegal. But when it's done by a powerful entity, is there really much practical risk to the liar?

Perhaps I'm being overly cynical, but my impression was that high-profile Congressional hearings are mostly a form of political theater.


I'm pretty sure these hearing are almost entirely theater and there's basically no chance Tim Cook gets personally charged with a crime. But, these statements can have large second and third order effects. The worse the tech CEOs and their companies look, the more political will there will be for passing significant legislation that affects them.


They are under oath with the potential for a perjury charge if they are caught knowingly misleading the lawmakers asking them questions.... The only reason that people such as those who were speaking yesterday would ever "correct" themselves.


> lying about it to Congress

When did Cook lie about it to Congress?




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