Apple slashes affiliate commission rate on apps from 7 to 2.5%

Posted:
in iPod + iTunes + AppleTV
Apple on Monday alerted members of its link affiliate program to a sharp reduction in their take from apps and in-app purchases, down from 7 percent to just 2.5.




The change will take effect May 1 around the world, Apple explained. The rate will stay at 7 percent for all other Apple media, including music, movies, books, and TV shows.

"We will also continue to pay affiliate commissions on Apple Music memberships so there are many ways to earn commissions with the program," the company noted.

It's not clear why Apple made the change other than to retain more profit from App Store sales. Under the program, websites -- including AppleInsider -- can claim a small percentage of the proceeds from linked apps without affecting how much developers earn.

The lower rate could impact the bottom line of small- to mid-sized websites, particularly those focused on app news and reviews. While in most cases a site will only earn a few cents per download even with the 7 percent rate, that can still translate into hundreds of dollars with enough readers.

In June 2016 Apple announced a switch to a new revenue model, through which it would take only 15 percent from App Store subscriptions instead of its normal 30 in the case of customers subscribed for over a year. It could be that the company is looking to shore up lost revenue.

Apple may also be less worried about attracting outside publicity, given the overall success of the iPhone and the App Store, and an improved review system introduced alongside iOS 10.3.
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Comments

  • Reply 1 of 31
    SpamSandwichSpamSandwich Posts: 30,734member
    sog35 said:
    Its time to charge Uber 0.5% of all sales on the app.

    Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

    While struggling app designers have to pay Apple 30% on every App sale.
    That's not a completely unreasonable demand.
    watto_cobra
  • Reply 2 of 31
    carnegiecarnegie Posts: 623member
    Does anyone know whether the 7% (soon to be 2.5%) commission comes entirely out of Apple's share of App Store proceeds or comes out of developers' shares as well?

    In other words, is Apple paying 23.3% of its 30% for these commissions while what developers get from App Store sales is unaffected? Or, is Apple paying 7% of its 30% while developers are paying 7% of their 70%?

    I suspect it's the former. But if anyone knows for sure, I'd appreciate their sharing their knowledge of the situation.
  • Reply 3 of 31
    SpamSandwichSpamSandwich Posts: 30,734member
    sog35 said:
    sog35 said:
    Its time to charge Uber 0.5% of all sales on the app.

    Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

    While struggling app designers have to pay Apple 30% on every App sale.
    That's not a completely unreasonable demand.
    It really isn't.

    Apple can afford to play hardball. Uber can't.  Not having Uber on the iPhone would be a minor inconvience for about 1% of the iPhone base. But Uber not having iOS customers would destroy 80% of their sales.

    Frankly I'm shocked Cook has not played this card yet.
    As long as he also did it to Lyft and any other cab-style services.
    jbdragon
  • Reply 4 of 31
    Mike WuertheleMike Wuerthele Posts: 4,197administrator
    carnegie said:
    Does anyone know whether the 7% (soon to be 2.5%) commission comes entirely out of Apple's share of App Store proceeds or comes out of developers' shares as well?

    In other words, is Apple paying 23.3% of its 30% for these commissions while what developers get from App Store sales is unaffected? Or, is Apple paying 7% of its 30% while developers are paying 7% of their 70%?

    I suspect it's the former. But if anyone knows for sure, I'd appreciate their sharing their knowledge of the situation.
    It comes out of the 30%. 

    Related: It doesn't really affect us much at AI, but it potentially makes a hard situation of identifying garbage apps and discovering good ones worse, as there's no real way for places like TouchArcade and other focused venues to make a living anymore.
    edited April 2017 gatorguyronn
  • Reply 5 of 31
    SpamSandwichSpamSandwich Posts: 30,734member
    carnegie said:
    Does anyone know whether the 7% (soon to be 2.5%) commission comes entirely out of Apple's share of App Store proceeds or comes out of developers' shares as well?

    In other words, is Apple paying 23.3% of its 30% for these commissions while what developers get from App Store sales is unaffected? Or, is Apple paying 7% of its 30% while developers are paying 7% of their 70%?

    I suspect it's the former. But if anyone knows for sure, I'd appreciate their sharing their knowledge of the situation.
    It comes out of the 30%. 

    Related: It doesn't really affect us much at AI, but it potentially makes a hard situation of identifying garbage apps and discovering good ones worse, as there's no real way for places like TouchArcade and other focused venues to make a living anymore.
    Judging by the panicked tweets coming from other sites, I take it quite a few were depending on app links for revenue.
  • Reply 6 of 31
    sergiozsergioz Posts: 221member
    Apple can definitely play that card; "Uber geofenced Apple's Cupertino head- quarters to hide that it was tracking iPhone. Apple CEO Tim Cook threatened to have Uber's iPhone app removed from App Store in 2015, when it learned that ride-sharing company secretly found way to identify individual iPhones, even once the app was deleted from the phone."
    watto_cobra
  • Reply 7 of 31
    ronnronn Posts: 313member
    How nice of them to give an entire week's notice.
  • Reply 8 of 31
    SpamSandwichSpamSandwich Posts: 30,734member
    ronn said:
    How nice of them to give an entire week's notice.
    Does this change affect you?
    watto_cobra
  • Reply 9 of 31
    SoliSoli Posts: 8,550member
    ronn said:
    How nice of them to give an entire week's notice.
    Does this change affect you?
    Why does a change have to directly affect you for you to be concerned by it. Imagine if said I cared about women's right and you sugested I shouldn't because I'm male.
    edited April 2017 revenantradarthekatfastasleepsingularitybestkeptsecret
  • Reply 10 of 31
    SoliSoli Posts: 8,550member
    This abrupt change with only a week's warning is atypical for Apple and I can't think of s single good reason why it would happen now, this quickly, and with such a large drop. Usually these are planned out and stepped. Even if Apple was lowering their App Store take in the near future, I'm still surprised by this move now and so abruptly.
    iqatedo
  • Reply 11 of 31
    ronn said:
    How nice of them to give an entire week's notice.
    Does this change affect you?
    I would surmise that as much as, oh, I don't know, Apple versus Microsoft/Samsung/Google/Android/Amazon/Dell/Lenovo etc. affects anyone ...
  • Reply 12 of 31
    macguimacgui Posts: 1,116member
    ronn said:
    How nice of them to give an entire week's notice.
    Does this change affect you?
    How is that even relevant and why do you care?
  • Reply 13 of 31
    Rayz2016Rayz2016 Posts: 4,556member
    sog35 said:
    Its time to charge Uber 0.5% of all sales on the app.

    Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

    While struggling app designers have to pay Apple 30% on every App sale.
    That's not a completely unreasonable demand.
    Yes, I was surprised too. 
    radarthekat
  • Reply 14 of 31
    macguimacgui Posts: 1,116member

    sog35 said:
    It really isn't.
    It really is. Unless and until Apple is going to revamp from where it collects it's money along with the ELUA etc., so it's fair to everyone. I'm no fan of Uber, but fair is fair.

    Not to mention to just charge Uber would be seen a greedy cash grab by 'evil' Apple can't objectively be justified. Revenge/punishment wouldn't satisfy a court.
    cali
  • Reply 15 of 31
    SpamSandwichSpamSandwich Posts: 30,734member
    macgui said:
    ronn said:
    How nice of them to give an entire week's notice.
    Does this change affect you?
    How is that even relevant and why do you care?
    Who the hell asked you?
  • Reply 16 of 31
    SoliSoli Posts: 8,550member
    sog35 said:
    Its time to charge Uber 0.5% of all sales on the app.

    Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

    While struggling app designers have to pay Apple 30% on every App sale.
    1) Why is Uber a part of this converstion?

    2a) Just Uber? How is that fair?

    2b) if you don't like, say, Amazon, should 0.5% of their revenue go to Apple, too? How about other services, like, say, DirectTV that also offers an app to watch shows with your all-you-can-eat monthly subscription?
    gatorguyfastasleepbigpics
  • Reply 17 of 31
    SoliSoli Posts: 8,550member
    macgui said:
    ronn said:
    How nice of them to give an entire week's notice.
    Does this change affect you?
    How is that even relevant and why do you care?
    Who the hell asked you?
    You asked him.
    coolfactorronn
  • Reply 18 of 31
    Mike WuertheleMike Wuerthele Posts: 4,197administrator
    carnegie said:
    Does anyone know whether the 7% (soon to be 2.5%) commission comes entirely out of Apple's share of App Store proceeds or comes out of developers' shares as well?

    In other words, is Apple paying 23.3% of its 30% for these commissions while what developers get from App Store sales is unaffected? Or, is Apple paying 7% of its 30% while developers are paying 7% of their 70%?

    I suspect it's the former. But if anyone knows for sure, I'd appreciate their sharing their knowledge of the situation.
    It comes out of the 30%. 

    Related: It doesn't really affect us much at AI, but it potentially makes a hard situation of identifying garbage apps and discovering good ones worse, as there's no real way for places like TouchArcade and other focused venues to make a living anymore.
    Judging by the panicked tweets coming from other sites, I take it quite a few were depending on app links for revenue.
    Yes, there are many.
  • Reply 19 of 31
    rogifan_newrogifan_new Posts: 3,774member
    sog35 said:
    sog35 said:
    Its time to charge Uber 0.5% of all sales on the app.

    Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

    While struggling app designers have to pay Apple 30% on every App sale.
    That's not a completely unreasonable demand.
    It really isn't.

    Apple can afford to play hardball. Uber can't.  Not having Uber on the iPhone would be a minor inconvience for about 1% of the iPhone base. But Uber not having iOS customers would destroy 80% of their sales.

    Frankly I'm shocked Cook has not played this card yet.
    Basically what you're saying is any profit generating business that has an app on the App Store should be required to give Apple a percentage of their revenue. Why are you singling out Uber? Should AT&T have to pay Apple a percentage of my monthly DirecTV subscription because I often watch things on my iPhone and iPad using their app?
    Solicali
  • Reply 20 of 31
    rogifan_newrogifan_new Posts: 3,774member

    sog35 said:
    Its time to charge Uber 0.5% of all sales on the app.

    Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

    While struggling app designers have to pay Apple 30% on every App sale.
    So if you went to Uber.com in Safari to hail your ride would it still be a crime that Apple doesn't get a cut of their revenue? Should Apple get a cut every time I buy something from Target using their iPhone app?
    gatorguy
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