When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
Yep and I’ve never bought the customer acquisition argument either. Right now I watch the majority of my Netflix content on my Roku enabled smart TV. In what way is Apple responsible for Netflix acquiring me as a customer? None.
The App Store is like a high-end mall, with standards and safety for the merchants and the consumers. There are fees and regulations. Regarding App Store, anyone can jail break and lose all their protections. Anyone can go Android.
But the most important thing is the the amount of business done through Apps where Apple has no cut is more than 10x the App Revenue - ride sharing, nearly all fintech, travel sites, etc.
Calling App Store a monopoly is a tough case.
That’s why still taking a cut of digital goods makes no sense IMO. And I think Apple is doing it because it can not because there is good justification for it. Being on a mobile platform is the equivalent of being on the internet. Of course everyone focuses on Netflix and Spotify but what about all the games with IAP? All these games where you have to pay to advance or pay to win or you’re just paying to remove ads...that’s not a business I’d be proud of taking a cut of and growing revenues from. I guess it’s a service, but I wouldn’t consider it a healthy one.
The App Store is like a high-end mall, with standards and safety for the merchants and the consumers. There are fees and regulations. Regarding App Store, anyone can jail break and lose all their protections. Anyone can go Android.
But the most important thing is the the amount of business done through Apps where Apple has no cut is more than 10x the App Revenue - ride sharing, nearly all fintech, travel sites, etc.
Calling App Store a monopoly is a tough case.
No, not anyone can jailbreak AFAIK. Apple doesn’t want iOS 12 to be jailbroken. In fact, Apple doesn’t want iOS jailbroken period no matter the version, and does everything in their power to make sure you cannot. While Apple may or may not have a technical monopoly on iOS apps, saying that jailbreaking is a factor to consider is silly stuff. It's not.
Whether they want it or not is not the issue. They acknowledge it is legal to do so at your own risk. They choose not to be responsible for exposing their customers to the dangers of the open market on a device that by its very nature contains a multitude of personal data. They also recognize the cost of supporting that is not conducive to a positive relationship with customers they have to face in their stores or the resources needed to keep ahead of the rogue players would increase exponentially. Considering jail breaking is done by exploiting a vulnerability found in the software Apple is of course going to address and correct it immediately. if I decide to flash the computer in my car to increase its output the manufacturer is not responsible for the outcome. My warranty will not cover any resulting engine or transmission damage I cause. It’s on them to find out though. On the other hand, they are not going to provide a mechanism to allow me to do so knowing the consequences. To do so even as a lure because it looks like you are helping is problematic in its own right.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
It has everything to do with where people sign up, why they signed up and who manages the subscription. These companies pay nothing to host their App on the Apple store. If they have the marketing pull to sign them up themselves and not have Apple manage this relationship, then they could have always done as they are doing now. If Apple was concerned about that the free App option would not exist. So, bring your own customers for free or uses our customer base and we manage the subscription and share revenue. I fail to see the issue. Also, if the service provided under the subscription is good enough to maintain the relationship for a year the cut goes down to 15% as the initial acquisition cost which I’m sure factors in the App Store advertising budget has been adequately recouped. So, it’s not because the host the App. It’s because the App is leveraging their platform and consumer trust and goodwill to get them to signup and stay signed up. For instance I would never give my credit card info to Microsoft, Google, Netflix or any company who could be easily bought and policies highjacked by the new company. The request for my credit card usually ends with me hitting the cancel button. These companies knew this and used Apple to have access to their customers during their growth phase. Now that they have a significant base of their own, they want to cry foul. That to me is foul.
You would never give your credit card info to Microsoft? I highly doubt another company is going to be buying Microsoft or Google anytime soon. That’s just FUD. The majority of my monthly bills are on my credit card. Not once has it been compromised. I’m not worried.
Backlash means nothing unless developers stopped making apps. And even if they did, that means nothing unless it was going to be a top selling app because like many media businesses, the App Store is a hit-driven business and below the top 200 titles, there's almost no sales.
The developers might have an argument when it comes to subscriptions, but what these developers refuse to realize, probably because they have no experience selling off-the-shelf software is that if they were selling packaged software via large software distributors like Ingram Micro-D, they wouldn't be giving away 30%, they'd be giving away 48 to 52% and in some cases up to 55 to 60%. Now it's true that without the Apple restrictions, they could sell software off of their own websites and keep it all, but they'd still have to pay credit card fees, absorb fraud losses, deal with the costs of building, maintaining and operating an e-commerce site, deal with sales taxes and spend money on marketing to make people aware of their products and come to their site in the first place, etc. As far as I can see, the App Store is a bargain for them.
If the App Store tax was 15% rather than 30% would develops stop complaining?
It wouldn't stop the antitrust lawsuit, and that's where the threat to the services model lies.
The only "threat" to the service model is that big companies like Netflix (that represent a good chunk of the App Store revenue) have options for collecting that revenue directly from consumers. Big deal. Sure Apple likes making tens of millions of dollars from those "outlier" in-app-purchases, but that has zero impact on the billions of dollars of true in-app purchases. If I paid my insurance bill via the USAA app, would I expect/want Apple to get 30% or 15% of that? Of course not. So how is Netflix much different when half the time I'm watching Netflix on my laptop (admittedly an Apple one in my case) through a browser rather than a custom iOS app?
The antitrust lawsuit is unlikely (in my opinion) to either cost Apple material damages or require significant changes to its business practices.
The App Store is like a high-end mall, with standards and safety for the merchants and the consumers. There are fees and regulations. Regarding App Store, anyone can jail break and lose all their protections. Anyone can go Android.
But the most important thing is the the amount of business done through Apps where Apple has no cut is more than 10x the App Revenue - ride sharing, nearly all fintech, travel sites, etc.
Calling App Store a monopoly is a tough case.
No, not anyone can jailbreak AFAIK. Apple doesn’t want iOS 12 to be jailbroken. In fact, Apple doesn’t want iOS jailbroken period no matter the version, and does everything in their power to make sure you cannot. While Apple may or may not have a technical monopoly on iOS apps, saying that jailbreaking is a factor to consider is silly stuff. It's not.
Whether they want it or not is not the issue. They acknowledge it is legal to do so at your own risk.
Yes it is legal but I don't believe that Apple has ever agreed that it is even after the courts ruled against them. They argued vehemently that it is not
The App Store is a big commercial for resellers. Not in the since of a newspaper or radio ad, but instead a frictionless way to get new customers. A couple of clicks and the money starts rolling in. No forms to fill out or CC info to give out. Netflix and others would not be the size they now are without the App Store. It is the way of business to screw over those who helped you grow.
Yeah, an App Store is inherently problematic when it comes to business models. It's too easy for those realizing value from it to get around compensating you for that value. And, as you suggest, they often will avoid compensating you for the value you represent to them if they can.
It's a classic business problem, being a middle man where the nature of what you are a middle man for means that you connect the parties on the respective sides of an arrangement (rather than just buy from one and sell to the other). Neither would be able to do or get what they want without the service you provide, but once you've started providing it they often enough can cut you out of the loop. It's often not practical to charge a large up front fee for the service you provide, one that would reflect the value of the connection you help make over the lifetime of the relationship which is created. And your ability to collect ongoing fees (rather than a large up front fee) which reflect the value of the role you played in making the connection depends on their unwillingness or inability to cut you out of the loop - which is something they, often enough, are eager to do.
Actually App Store is more like a consignment business model, for virtual goods. NOTE many goods and services sales are facilitated by Apps but do NOT result in payment to Apple.
That's not exactly the way Apple's Luca Maestri framed it, and his statements to that effect are being used by the opposition IIRC. He says the sale is Apple's, who then shares a portion of it with developers, rather than devs paying Apple.
FWIW if Apple were a consignment shop they would claim the entire sale, and record the portion paid out to the consignee as a business expense AFAIK. I don't believe Apple does the same with the App Store accounting-wise but I don't know for certain. If they do then it seems to me it would be proof enough of standing for SCOTUS to allow the lawsuit to proceed. Even if they don't I think that's going to be the decision anyway. That doesn't mean the plaintiffs will win their class-action case tho.
Apple's position is that the App Store is a two-sided marketplace. It acts as a principal in selling distribution services to app developers. It also acts as an agent in selling apps to end users for app developers. In the later regard, the app developers are the principals. As for the accounting issue you refer to, Apple only counts as revenue the portion of an app sale which it keeps.
If the App Store tax was 15% rather than 30% would develops stop complaining?
No doubt some developers have complained. But, as demonstrated by amici filings in Apple v Pepper, they largely support Apple on this issue (i.e. the legality and/or propriety of Apple's App Store model).
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
I’m quite comfortable with Apple taking a reasonable cut for allowing a developer to use software Apple created on a device Apple created and available to billions of customers in a store Apple created. That’s a fair trade for people who are reaping the benefits of Apple’s considerable risk and investment.
I can understand that for Apps. The only question is if 30% is still a reasonable amount. It might be. I don't know.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
It has everything to do with where people sign up, why they signed up and who manages the subscription. These companies pay nothing to host their App on the Apple store. If they have the marketing pull to sign them up themselves and not have Apple manage this relationship, then they could have always done as they are doing now. If Apple was concerned about that the free App option would not exist. So, bring your own customers for free or uses our customer base and we manage the subscription and share revenue. I fail to see the issue. Also, if the service provided under the subscription is good enough to maintain the relationship for a year the cut goes down to 15% as the initial acquisition cost which I’m sure factors in the App Store advertising budget has been adequately recouped. So, it’s not because the host the App. It’s because the App is leveraging their platform and consumer trust and goodwill to get them to signup and stay signed up. For instance I would never give my credit card info to Microsoft, Google, Netflix or any company who could be easily bought and policies highjacked by the new company. The request for my credit card usually ends with me hitting the cancel button. These companies knew this and used Apple to have access to their customers during their growth phase. Now that they have a significant base of their own, they want to cry foul. That to me is foul.
Maybe Apple should have a cut of the first month of the subscription, or the first six months. Or maybe no free subscription Apps. I don't know. but Apple getting a cut from Spotify forever because three years ago they hosted an app that someone downloaded just feels iffy.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
Yep and I’ve never bought the customer acquisition argument either. Right now I watch the majority of my Netflix content on my Roku enabled smart TV. In what way is Apple responsible for Netflix acquiring me as a customer? None.
That may be the case with you. But when it comes to some of Netflix's customers, they are only customers because they can watch Netflix through various mobile devices. If they couldn't watch Netflix on, e.g, their iPhone or iPad, they wouldn't be Netflix customers. The service wouldn't have much value to them. For others, the service would still have value if they couldn't watch on their mobile devices, but not as much value. For others still, the value doesn't depend at all on being able to use mobile devices.
Actually App Store is more like a consignment business model, for virtual goods. NOTE many goods and services sales are facilitated by Apps but do NOT result in payment to Apple.
That's not exactly the way Apple's Luca Maestri framed it, and his statements to that effect are being used by the opposition IIRC. He says the sale is Apple's, who then shares a portion of it with developers, rather than devs paying Apple.
FWIW if Apple were a consignment shop they would claim the entire sale, and record the portion paid out to the consignee as a business expense AFAIK. I don't believe Apple does the same with the App Store accounting-wise but I don't know for certain. If they do then it seems to me it would be proof enough of standing for SCOTUS to allow the lawsuit to proceed. Even if they don't I think that's going to be the decision anyway. That doesn't mean the plaintiffs will win their class-action case tho.
Apple's position is that the App Store is a two-sided marketplace. It acts as a principal in selling distribution services to app developers.
Not according to Maestri when addressing stockholders, and that's why it's being included as evidence that Apple considers the users to be the customer rather than the developers in the antitrust lawsuit. Quote: "For some of the services, such as the App Store, we share a portion of the value of each transaction with the app developer and only recognize revenue on the portion that we keep."
I agree that for accounting purposes Apple may not treat it as such, but Apple does consider the transactions to be between Apple and the end-user and not the developer and end-user according to that statement filed with a 2016 quarterly supplemental. That's speaks to the crux of what SCOTUS is being asked to consider.
John Gruber chatted about this with Ben Thompson on his latest podcast. They both agreed that it was ridiculous for Apple to be taking a cut of others digital content sales. Ben referred to it was rent seeking; Apple taking the cut just because they can. They also agreed that it’s poor user experience that Apple doesn’t let an app like Netflix at the very minimum tell you where to go to sign up or better yet offer a link in app to redirect to Safari or a web view where you can sign up. And as I’ve said before if Apple deserves a cut of Netflix subscriptions (I don’t think they do) then they sure as hell deserve a cut of every Lyft or Uber transaction.
Funny how the rules of the universe change only for Apple.
So Wal-Mart should not only take a %0 cut from sales but also refer customers to other stores?
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
Developers receive a pretty substantial service with the App Store, and they only need to pay 30% of their sales for it. That’s very reasonable.
You can complain about subscriptions, but what’s to stop developers from releasing a ‘free’ app using Apple’s distribution methods and resources and then do a subscription to enable full functionality of the app, leeching off from Apple’s services and giving them nothing for it?
You could also complain that developers have no choice but to use Apple. But I think given the choice the vast majority of developers would still use Apple, even the few who complain. And can also thank Apple for a service that likely works better and is of higher quality than any hypothetical alternative.
Apple isn’t simply being greedy, they’re wanting to provide what they perceive is a consistent user experience and they want developers who use their services to pay a reasonable charge for it.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
I’m quite comfortable with Apple taking a reasonable cut for allowing a developer to use software Apple created on a device Apple created and available to billions of customers in a store Apple created. That’s a fair trade for people who are reaping the benefits of Apple’s considerable risk and investment.
I can understand that for Apps. The only question is if 30% is still a reasonable amount. It might be. I don't know.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
It has everything to do with where people sign up, why they signed up and who manages the subscription. These companies pay nothing to host their App on the Apple store. If they have the marketing pull to sign them up themselves and not have Apple manage this relationship, then they could have always done as they are doing now. If Apple was concerned about that the free App option would not exist. So, bring your own customers for free or uses our customer base and we manage the subscription and share revenue. I fail to see the issue. Also, if the service provided under the subscription is good enough to maintain the relationship for a year the cut goes down to 15% as the initial acquisition cost which I’m sure factors in the App Store advertising budget has been adequately recouped. So, it’s not because the host the App. It’s because the App is leveraging their platform and consumer trust and goodwill to get them to signup and stay signed up. For instance I would never give my credit card info to Microsoft, Google, Netflix or any company who could be easily bought and policies highjacked by the new company. The request for my credit card usually ends with me hitting the cancel button. These companies knew this and used Apple to have access to their customers during their growth phase. Now that they have a significant base of their own, they want to cry foul. That to me is foul.
Maybe Apple should have a cut of the first month of the subscription, or the first six months. Or maybe no free subscription Apps. I don't know. but Apple getting a cut from Spotify forever because three years ago they hosted an app that someone downloaded just feels iffy.
Why not? If the individual is still paying through their Apple ID, what does it matter?
Do you think your local store should stop getting a cut because you've been buying balogna for 3 years?
As far as Uber, they're lucky. Apple has 100% right to take a cut from anything Apple provides. Even after allowing access and (accidentally) data to customers, Apple still hasn't charged Uber!
Apple should mandate all apps allow Apple ID/iTunes credit on apps. It would be more customer friendly and secure. Apple also takes a 30% cut that way.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
I’m quite comfortable with Apple taking a reasonable cut for allowing a developer to use software Apple created on a device Apple created and available to billions of customers in a store Apple created. That’s a fair trade for people who are reaping the benefits of Apple’s considerable risk and investment.
I can understand that for Apps. The only question is if 30% is still a reasonable amount. It might be. I don't know.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
It has everything to do with where people sign up, why they signed up and who manages the subscription. These companies pay nothing to host their App on the Apple store. If they have the marketing pull to sign them up themselves and not have Apple manage this relationship, then they could have always done as they are doing now. If Apple was concerned about that the free App option would not exist. So, bring your own customers for free or uses our customer base and we manage the subscription and share revenue. I fail to see the issue. Also, if the service provided under the subscription is good enough to maintain the relationship for a year the cut goes down to 15% as the initial acquisition cost which I’m sure factors in the App Store advertising budget has been adequately recouped. So, it’s not because the host the App. It’s because the App is leveraging their platform and consumer trust and goodwill to get them to signup and stay signed up. For instance I would never give my credit card info to Microsoft, Google, Netflix or any company who could be easily bought and policies highjacked by the new company. The request for my credit card usually ends with me hitting the cancel button. These companies knew this and used Apple to have access to their customers during their growth phase. Now that they have a significant base of their own, they want to cry foul. That to me is foul.
Maybe Apple should have a cut of the first month of the subscription, or the first six months. Or maybe no free subscription Apps. I don't know. but Apple getting a cut from Spotify forever because three years ago they hosted an app that someone downloaded just feels iffy.
Why not? If the individual is still paying through their Apple ID, what does it matter?
Do you think your local store should stop getting a cut because you've been buying balogna for 3 years?
As far as Uber, they're lucky. Apple has 100% right to take a cut from anything Apple provides. Even after allowing access and (accidentally) data to customers, Apple still hasn't charged Uber!
Apple should mandate all apps allow Apple ID/iTunes credit on apps. It would be more customer friendly and secure. Apple also takes a 30% cut that way.
Don't like it? Get off the app store.
The bigger issue is what is currently going through the courts as to whether the App Store has the right to exist as the sole source of iOS apps.
If this issue were to be treated within the EU, I think there would be a real possibility of it being considered anti-competitive. As things stand in the current process though, I don't know which way things will swing.
The whole idea of 'don't like it? Get off the app store' would take on a new meaning if things do eventually swing against Apple.
Actually App Store is more like a consignment business model, for virtual goods. NOTE many goods and services sales are facilitated by Apps but do NOT result in payment to Apple.
That's not exactly the way Apple's Luca Maestri framed it, and his statements to that effect are being used by the opposition IIRC. He says the sale is Apple's, who then shares a portion of it with developers, rather than devs paying Apple.
FWIW if Apple were a consignment shop they would claim the entire sale, and record the portion paid out to the consignee as a business expense AFAIK. I don't believe Apple does the same with the App Store accounting-wise but I don't know for certain. If they do then it seems to me it would be proof enough of standing for SCOTUS to allow the lawsuit to proceed. Even if they don't I think that's going to be the decision anyway. That doesn't mean the plaintiffs will win their class-action case tho.
Apple's position is that the App Store is a two-sided marketplace. It acts as a principal in selling distribution services to app developers.
Not according to Maestri when addressing stockholders, and that's why it's being included as evidence that Apple considers the users to be the customer rather than the developers in the antitrust lawsuit. Quote: "For some of the services, such as the App Store, we share a portion of the value of each transaction with the app developer and only recognize revenue on the portion that we keep."
I agree that for accounting purposes Apple may not treat it as such, but Apple does consider the transactions to be between Apple and the end-user and not the developer and end-user according to that statement filed with a 2016 quarterly supplemental. That's speaks to the crux of what SCOTUS is being asked to consider.
I'm not sure what the contradiction you see is.
As I said in the post you quoted (which you left out when you quoted it): "It [Apple] also acts as an agent in selling apps to end users for app developers."
Apple doesn't dispute that on one side of the two-sided marketplace, the end user is the customer. It sells apps to those customers as an agent for app developers.
The accounting practice that Mr. Maestri referred to in that quote is the same accounting practice I referred to. It doesn't demonstrate that Apple is the principal, in such app sales, rather than an agent. That settlement flow doesn't mean that Apple is the principal. An agent can collect the proceeds from a sale and pass through that portion of the proceeds which the principal is entitled to. That quote from Mr. Maestri, about Apple's accounting practices, supports the notion that it is acting as an agent rather than as a principal when it comes to app sales to end users.
Whether or not Apple's position as to the role it plays is accepted is another matter. But what I suggested is what Apple's position is. It's the principal on one side of the marketplace (selling services to app developers) and an agent on the other side (selling apps to end users).
(This isn't especially important, but I had meant to include it in the previous post and for future reference: If we were dealing with a consignment, the app developers would be consignors not the consignees. Apple would be the consignee. That's a common mistake made in keeping straight which party is called the consignor and which is called the consignee. The person owning something and turning it over to someone else to sell is the consignor. The consignee is the someone accepting it and trying to sell it.)
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
I’m quite comfortable with Apple taking a reasonable cut for allowing a developer to use software Apple created on a device Apple created and available to billions of customers in a store Apple created. That’s a fair trade for people who are reaping the benefits of Apple’s considerable risk and investment.
I can understand that for Apps. The only question is if 30% is still a reasonable amount. It might be. I don't know.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
It has everything to do with where people sign up, why they signed up and who manages the subscription. These companies pay nothing to host their App on the Apple store. If they have the marketing pull to sign them up themselves and not have Apple manage this relationship, then they could have always done as they are doing now. If Apple was concerned about that the free App option would not exist. So, bring your own customers for free or uses our customer base and we manage the subscription and share revenue. I fail to see the issue. Also, if the service provided under the subscription is good enough to maintain the relationship for a year the cut goes down to 15% as the initial acquisition cost which I’m sure factors in the App Store advertising budget has been adequately recouped. So, it’s not because the host the App. It’s because the App is leveraging their platform and consumer trust and goodwill to get them to signup and stay signed up. For instance I would never give my credit card info to Microsoft, Google, Netflix or any company who could be easily bought and policies highjacked by the new company. The request for my credit card usually ends with me hitting the cancel button. These companies knew this and used Apple to have access to their customers during their growth phase. Now that they have a significant base of their own, they want to cry foul. That to me is foul.
Maybe Apple should have a cut of the first month of the subscription, or the first six months. Or maybe no free subscription Apps. I don't know. but Apple getting a cut from Spotify forever because three years ago they hosted an app that someone downloaded just feels iffy.
Why not? If the individual is still paying through their Apple ID, what does it matter?
Do you think your local store should stop getting a cut because you've been buying balogna for 3 years?
As far as Uber, they're lucky. Apple has 100% right to take a cut from anything Apple provides. Even after allowing access and (accidentally) data to customers, Apple still hasn't charged Uber!
Apple should mandate all apps allow Apple ID/iTunes credit on apps. It would be more customer friendly and secure. Apple also takes a 30% cut that way.
Don't like it? Get off the app store.
The bigger issue is what is currently going through the courts as to whether the App Store has the right to exist as the sole source of iOS apps.
If this issue were to be treated within the EU, I think there would be a real possibility of it being considered anti-competitive. As things stand in the current process though, I don't know which way things will swing.
The whole idea of 'don't like it? Get off the app store' would take on a new meaning if things do eventually swing against Apple.
I think, even in the U.S. and under U.S. law, that's a real possibility.
As I see it, how we define relevant markets is problematic.
When the AppStore was a new thing that Apple created from scratch, and was the only game in town 30% did not seem unreasonable. There are lots of options now, lots of app stores, albeit not for iOS. 30% does seem a bit high now.
However, while I think the 30% for apps could be debated, I've never understood the 30% for subscriptions. The AppStore hosted the app, it has nothing to do with Spotify's servers or Microsoft's Office365 servers. I've always been uncomfortable with Apple getting a cut of an external subscription service revenue just because they hosted the app.
It has everything to do with where people sign up, why they signed up and who manages the subscription. These companies pay nothing to host their App on the Apple store. If they have the marketing pull to sign them up themselves and not have Apple manage this relationship, then they could have always done as they are doing now. If Apple was concerned about that the free App option would not exist. So, bring your own customers for free or uses our customer base and we manage the subscription and share revenue. I fail to see the issue. Also, if the service provided under the subscription is good enough to maintain the relationship for a year the cut goes down to 15% as the initial acquisition cost which I’m sure factors in the App Store advertising budget has been adequately recouped. So, it’s not because the host the App. It’s because the App is leveraging their platform and consumer trust and goodwill to get them to signup and stay signed up. For instance I would never give my credit card info to Microsoft, Google, Netflix or any company who could be easily bought and policies highjacked by the new company. The request for my credit card usually ends with me hitting the cancel button. These companies knew this and used Apple to have access to their customers during their growth phase. Now that they have a significant base of their own, they want to cry foul. That to me is foul.
You would never give your credit card info to Microsoft? I highly doubt another company is going to be buying Microsoft or Google anytime soon. That’s just FUD. The majority of my monthly bills are on my credit card. Not once has it been compromised. I’m not worried.
Oh, I see.
Since you've never had your card compromised it means that nobody else has? There is a very real benefit to having your credit card stored with a single entity and being allowed to purchase a million different Apps from various developers without having to pass your card to dozens of smaller companies. It's also why a lot of people like Amazon - one single account to buy multiple items.
While I agree it's odd not to trust someone like Microsoft with your credit card, that doesn't take away from the fact that it's always better to have your card on file with as few places as possible.
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The developers might have an argument when it comes to subscriptions, but what these developers refuse to realize, probably because they have no experience selling off-the-shelf software is that if they were selling packaged software via large software distributors like Ingram Micro-D, they wouldn't be giving away 30%, they'd be giving away 48 to 52% and in some cases up to 55 to 60%. Now it's true that without the Apple restrictions, they could sell software off of their own websites and keep it all, but they'd still have to pay credit card fees, absorb fraud losses, deal with the costs of building, maintaining and operating an e-commerce site, deal with sales taxes and spend money on marketing to make people aware of their products and come to their site in the first place, etc. As far as I can see, the App Store is a bargain for them.
The antitrust lawsuit is unlikely (in my opinion) to either cost Apple material damages or require significant changes to its business practices.
It's a classic business problem, being a middle man where the nature of what you are a middle man for means that you connect the parties on the respective sides of an arrangement (rather than just buy from one and sell to the other). Neither would be able to do or get what they want without the service you provide, but once you've started providing it they often enough can cut you out of the loop. It's often not practical to charge a large up front fee for the service you provide, one that would reflect the value of the connection you help make over the lifetime of the relationship which is created. And your ability to collect ongoing fees (rather than a large up front fee) which reflect the value of the role you played in making the connection depends on their unwillingness or inability to cut you out of the loop - which is something they, often enough, are eager to do.
No doubt some developers have complained. But, as demonstrated by amici filings in Apple v Pepper, they largely support Apple on this issue (i.e. the legality and/or propriety of Apple's App Store model).
Maybe Apple should have a cut of the first month of the subscription, or the first six months. Or maybe no free subscription Apps. I don't know. but Apple getting a cut from Spotify forever because three years ago they hosted an app that someone downloaded just feels iffy.
Quote: "For some of the services, such as the App Store, we share a portion of the value of each transaction with the app developer and only recognize revenue on the portion that we keep."
I agree that for accounting purposes Apple may not treat it as such, but Apple does consider the transactions to be between Apple and the end-user and not the developer and end-user according to that statement filed with a 2016 quarterly supplemental. That's speaks to the crux of what SCOTUS is being asked to consider.
So Wal-Mart should not only take a %0 cut from sales but also refer customers to other stores?
Dumb asses.
You can complain about subscriptions, but what’s to stop developers from releasing a ‘free’ app using Apple’s distribution methods and resources and then do a subscription to enable full functionality of the app, leeching off from Apple’s services and giving them nothing for it?
You could also complain that developers have no choice but to use Apple. But I think given the choice the vast majority of developers would still use Apple, even the few who complain. And can also thank Apple for a service that likely works better and is of higher quality than any hypothetical alternative.
Apple isn’t simply being greedy, they’re wanting to provide what they perceive is a consistent user experience and they want developers who use their services to pay a reasonable charge for it.
Do you think your local store should stop getting a cut because you've been buying balogna for 3 years?
As far as Uber, they're lucky. Apple has 100% right to take a cut from anything Apple provides.
Even after allowing access and (accidentally) data to customers, Apple still hasn't charged Uber!
Apple should mandate all apps allow Apple ID/iTunes credit on apps. It would be more customer friendly and secure. Apple also takes a 30% cut that way.
Don't like it? Get off the app store.
If this issue were to be treated within the EU, I think there would be a real possibility of it being considered anti-competitive. As things stand in the current process though, I don't know which way things will swing.
The whole idea of 'don't like it? Get off the app store' would take on a new meaning if things do eventually swing against Apple.
As I said in the post you quoted (which you left out when you quoted it): "It [Apple] also acts as an agent in selling apps to end users for app developers."
Apple doesn't dispute that on one side of the two-sided marketplace, the end user is the customer. It sells apps to those customers as an agent for app developers.
The accounting practice that Mr. Maestri referred to in that quote is the same accounting practice I referred to. It doesn't demonstrate that Apple is the principal, in such app sales, rather than an agent. That settlement flow doesn't mean that Apple is the principal. An agent can collect the proceeds from a sale and pass through that portion of the proceeds which the principal is entitled to. That quote from Mr. Maestri, about Apple's accounting practices, supports the notion that it is acting as an agent rather than as a principal when it comes to app sales to end users.
Whether or not Apple's position as to the role it plays is accepted is another matter. But what I suggested is what Apple's position is. It's the principal on one side of the marketplace (selling services to app developers) and an agent on the other side (selling apps to end users).
(This isn't especially important, but I had meant to include it in the previous post and for future reference: If we were dealing with a consignment, the app developers would be consignors not the consignees. Apple would be the consignee. That's a common mistake made in keeping straight which party is called the consignor and which is called the consignee. The person owning something and turning it over to someone else to sell is the consignor. The consignee is the someone accepting it and trying to sell it.)
As I see it, how we define relevant markets is problematic.
Oh, I see.
Since you've never had your card compromised it means that nobody else has? There is a very real benefit to having your credit card stored with a single entity and being allowed to purchase a million different Apps from various developers without having to pass your card to dozens of smaller companies. It's also why a lot of people like Amazon - one single account to buy multiple items.
While I agree it's odd not to trust someone like Microsoft with your credit card, that doesn't take away from the fact that it's always better to have your card on file with as few places as possible.