Apple to halve commission for developers turning over up to $1m in sales via App Store

Apple has overhauled commissions charged to small developers that turn over up to $1m on paid apps and in-app purchases sold via the App Store as the spotlight shines on its policies amid ongoing litigation. SME devs that qualify for the App Store Small Business Programme will be charged a 15 per cent commission as long as the …

[itzumee]

"It can't be a coincidence that Apple's gesture also comes as myriad large developers make forceful complaints about the practises of Apple and the 30 per cent commission it charges devs."

So refreshing to see the correct use of "myriad" rather than the all too common and incorrect use such as "a myriad of".

Aside from that, I can't see how Apple can justify taking a 30% cut of App Store purchases when said store hasn't changed much in years and so ongoing development costs would be either very low or close to zero, unless Apple employs huge numbers of dedicated App Store-related staff?

They're just a greedy company who are willing to shaft both customers and developers, and they mostly get away with it because of the lock-in to their walled garden.

[Snake]

RE: walls

And it just goes to prove how many people will willingly walk into those restrictive walls of their own accord. Being thankful, actually, that someone else can make the claim that their interests are being 'looked after', washing their hands of the [personal] responsibility whilst getting their fix of Shiny.

[SW10]

unless Apple employs huge numbers of dedicated App Store-related staff

I’m not a specialist, neither am I going to try to justify the tax take, but presumably verifying all the apps takes more than a couple of PFYs?

[Richard 12]

It's wholly automated

If the dice roll is a double six, your app is rejected and it's very nearly impossible to find a human to ask why and what you should change.

The marginal running cost of the apple app store is very close to zero - their only real cost is the payment processing, which is probably less than 5 cents per payment transaction.

[fidodogbreath]

Aside from that, I can't see how Apple can justify taking a 30% cut of App Store purchases when said store hasn't changed much in years

They're not charging for the app store itself. They're charging for access to an upscale audience that spends significantly more money on apps than Android users.

[AMBxx]

Ready for downvotes, but 30% sounds pretty good to me. How much do you think is made on software sold through retail via the distribution network.

If I could get access to millions of potential customers for a cost of just 30% and no additional overheads on my part, I'd leap at the chance.

The problem isn't the percentage, it's the forced nature of the payments and lack of alternative app stores.

[gobaskof]

Well yeah. Charge what you want if you allow competition. If you are going to monopolise access then you should be made to bend over backwards to show you are not abusing this monopoly. Transparency and benevolently good value would be the only way to show you are not abusing it. Monopolies are bad, I think they made a board game about that.

[Anonymous Coward]

As per our brick and mortar analogy, for the first app sale take a cut. But for on going activity within the app - why. Apple and the app store has nothing to do with that. Offer Apple pay as a an option, but not force it as the only option.

As people have indicated a finder's fee for the magical apple audience sure. But perpetual royalties is what is in question here.

Apple is adding no value after that app sale - the app is now on the user phone not on the apple store anymore. Their apple pay is not special except for being awfully expensive for a payment provider vs the typical 3%.

Their services revenue margin is ridiculous - if there was competition fine. But there isn't. That means that margin is sustained by a monopoly construct.

[fidodogbreath]

for the first app sale take a cut. But for on going activity within the app - why

The commission on subscription renewals already dropped to 15% in year two even prior to this announcement.

[Potemkine!]

how Apple can justify taking a 30% cut of App Store purchases when said store hasn't changed much in years and so ongoing development costs would be either very low or close to zero

Value is not related to cost. Benefit is the link between value and cost. You cannot claim the value is low because the cost is, nor the opposite.

[Anonymous Coward]

Still need to kill the walled garden, die lock-in die.

[Social Ambulator]

We don’t want the likes of you pissing on our fliers, thank you.

[Gene Cash]

"the typical fortnight grace period"

I see what you did there.

[Anonymous Coward]

A bearded twat in a cafe in Hoxton writes...

I love Apple and I have volunteered to pay a commission of 157% and I don’t even have an app on the store because I work in ‘social’.

[Anonymous Coward]

Re: A bearded twat in a cafe in Hoxton writes...

With their Macbook full on show, shoes with no socks, and with a half-decaf skinny light mocha chocca latte and a T-Shirt from RedBubble/Qwertee/Tee Fury.

[Simon Booth]

What about Google?

They still charge 30% Same goes for Steam

[katrinab]

Re: What about Google?

I guess with Google, you can sideload, though apparently normal people find it really difficult and scary. I guess those are the same people who ask us for help to install Windows software.

[needmorehare]

Windows has signed binariee

...and makes it very clear if a binary has been tampered with, whether the cert has been revoked and if the app isn't commonly installed it gets blocked by either SmartScreen, Windows Defender or flagged as untrustworthy by Cryptographic Services. This is the norm and macOS takes a similar approsch.

By comparison, Android treats all sideloads the same, meaning that every single install feels like a scary game of Russian roulette. Similar is true with Linux, as packages in repos are always signed but your typical distro-agnostic installers are unsigned because mainline Linux doesn't still doesn't do signed userland ELF binaries in the year 2020.

[Dan 55]

Re: Windows has signed binariee

Play Protect will also scan sideloaded apps if you allow it (and also probably if you don't too, this is Google obvs).

[lglethal]

Re: What about Google?

Having Steam and trying to install games from somewhere else, doesnt lead to risking bricking your PC. There are also at least a half dozens other game stores available on PC (e.g. Epic Games Store, GoG, Uplay, Origin, Xbox Game Store, Playstation Network, etc.) You can also buy Steam keys from other retailers (Fanatical, Green man gaming, humble, etc.) at prices that undercut Steam significantly.

Any of that sound remotely similar to Apple? Didnt think so...

[Dan 55]

Re: What about Google?

Valve makes it cheaper for smaller developers to sell on Steam and developers can generate as many keys as they like in Steam and give them away or sell them elsewhere and Valve doesn't get any cut of that.

[Anonymous Coward]

The good old days

Remember the good old days, just before (or at the very start of) the commercial Internet? Software devs had to ship their products on disk in boxes that they themselves paid to have made. They then sold those at 40%-60% (or more) 'off retail' to distributors who handled global logistics via their expensive warehouses and in turn sold them on at a margin to dealers who made 20%-30% or more to put those boxes on their expensive shop shelves for the punters to buy 'at full retail'. The software devs were probably making 30%-50% gross if they were very lucky, many a lot less. Most of that then went on production costs and expensive print marketing. Those were the days.

Then someone came along and said "hey, you can keep 70% instead and we'll take all the distribution and selling pain away." The software devs, naturally, bit their arm off. The rest is history.

Two sides to every tale. Devil's advocate there, I know, and there are nuances (free updates, anyone?) but for many losing just 30% for easy and reliable global distribution is pretty small, even for subscription products/services?

A/C because, etc.

[Mxm]

Re: The good old days

As a shareware author myself, I remember the good old days when I sold digitally, directly to customers and only paid a 10-20% fee to a payment processing service. Now with Android, I pay 30% to Google and on top of that the price of my app is inflated maybe 20% further because of sales tax even though I myself am below the limit of needing to be VAT-registered.

[Dan 55]

Re: The good old days

There speaks someone who can't remember how shareware was sold and how id software made it.

[Falmari]

Re: The good old days

The good old days when you could purchase software online. You do know there where online stores for software operated by the software publishers and some independent like Steam before the IPhone was released in 2007.

The only reason companies that already have stores or other online distribution methods use Apple's store for the IPhone is that they are forced to.

[Roland6]

Re: The good old days

>The good old days when you could purchase software online.

I think the original AC was referring to the norms of the 80's and early 90's.

But yes, back when companies ran their own store, direct sales were much sought after as they could mean you actually got circa 80% of RRP to maintain the development team, compared to 20~30% via third-party retailers...

[Dr.Flay]

Re: The good old days

Your comparison does not work as you are comparing sales of a physical product to a totally digital one.

Developers could save that expense you mention by doing exactly the same and only selling digital copies.

If indeed Steam etc. sent out DVDs and Bluray discs then yes it would warrant a decent cut.

[ForthIsNotDead]

As someone who has never bought an apple* product...

...please allow me to sit here in the corner with an excruciatingly annoying and smug look on my face. :-)

Thanks.

* lower-case because apparently it really pisses them off.

[Fogcat]

I can understand the commission on selling an app through the app store. It's the commission on all future purchases related to the app that raises my eyebrows. Lets say for example you sell an app that lets you select pictures and request a hard copy is mailed to you at home. And let's say the initial price includes printing 10 pictures. If you want to print more pictures you have to buy more credit. As I understand it (and correct me if I'm wrong) Apples says that you can only buy that credit in the app (with 30% commission), if you have a website and let people buy credit there your app will be banned from the app store. That's what seems outrageous to me.

[Ozan]

Actual problem is not Apple getting 30% commusion. Problem is that you can't use any other payment system with lower fees or alternative app store with better commusion. That's the real monoboly. Apple does not let anyone else to run any app store or payment system.

[Brewster's Angle Grinder]

If there was real competition, their cut would be in single figures. Still, I'm not going to turn down a 20% increase in revenue from Apple. I'd read the headlines and thought it was a cut for companies with more than a million.

[Roland6]

Re: Still, I'm not going to turn down a 20% increase in revenue from Apple.

I suspect part of Apple's reasoning is to ensure developers and especially hobbist/pre-startup and startup/small developers to continue to develop for the Apple ecosystem, first.

We can expect similar inducements from MS and Google in the near future.

[gnasher729]

Some people have tricked you into thinking that Apple is a payment processor.

What you pay for is: Storage. Downloads. For your current version and for older versions. Quality control. Advertising. Access to 100s of millions of customers. Services, like maps and notifications. Cloud storage for your users. Handling app distribution laws and taxes in 150 countries. Plus the payment processor fee.

In addition, the developer is free to sell commission free through their own website. Netflix doesn’t pay a penny in commissions to Apple.

[Steve Todd]

“ Apple then kicked Epic out of the App Store with immediate effect – instead of the typical fortnight grace period – and revoked the Unreal Engine dev tool.”

Erm, no. There isn’t a grace period if you release code through the App Store which is found to be deliberately breaking the terms of service (Epic activated a feature post release that broke TOS). Neither was the Unreal Engine pulled. Epic made a fuss about UE, but it was never an App Store product and was developed under a different account.

[lglethal]

Sorry but you're wrong...

Actually Apple did pull Epic's developer licence for the Unreal Engine as well, until a judge smacked them down and said they had to reinstates the keys.

Reporting right here on El reg...

https://www.theregister.com/2020/08/25/epic_vs_apple/

Unreal engine is not an app store product but its used in dozens of App store Apps. Removing developer keys meant Epic would not be able to update Unreal Engine for Apple products thus meaning any developers already using it would be up the creek without a security fix.

[Steve Todd]

Re: Sorry but you're wrong...

You’re only partially right also. Apple threatened to revoke the developer keys for UE, but was restrained from doing so. See https://cdn.vox-cdn.com/uploads/chorus_asset/file/21949772/gov.uscourts.cand.364265.118.0.pdf

The UE was never in the App Store, and revoking its keys would not have blocked any app that was currently using it. The problem would have been releasing fixes/patches to it.

[Fr. Ted Crilly]

I never noticed before

Tim Beaker...

https://3.bp.blogspot.com/-QFQLyWxOII8/T0JvlO4VEiI/AAAAAAAAAXI/9mz1euiWNQk/s1600/whitebeaker.jpg

[Dr.Flay]

Apple Board room discussion.

"How can we make it look like we are being less like leeches without it affecting revenue ?"

"hmmm, who do we make the least money from anyway ?"

"What if we just take a smaller cut from the small pie ?"

"great idea the plebs will be on our side if we make it look like we care about them."