News publishers push back against Apple's App Store commission fees

Posted:
in General Discussion edited August 2020
Major news publishers have reached out to Tim Cook, and are asking Apple to reduce its 30 percent cut on first-time subscriptions.




Spurred to action by Epic's ongoing fight with Apple, some of the biggest names in news publishing are now pushing for more favorable terms in the App Store.

The Wall Street Journal, New York Times, the Washington Post, and other publishers have signed a letter requesting Apple cut its App Store commission fee to 15 percent, down from the current 30 percent.

Apple charges a 30 percent commission fee on first-year subscriptions purchased through apps hosted on the App Store. After the first year, the commission fee is reduced to 15 percent. It isn't clear why the publishers aren't asking the same of Google.

As it turns out, Apple has cut its fees in the past -- for Amazon. In 2016, Eddy Cue had proffered a deal in which Amazon would share 15 percent of revenues generated by new subscribers who signed up for Prime Video through an in-app purchase. This move directly contradicts Apple's stance of treating all apps and developers the same.

The letter, penned by Jason Kint, chief executive of the trade body, Digital Content Next, reads, "I ask that you clearly define the conditions that Amazon satisfied for its arrangement so that DCN's member companies meeting those conditions can be offered the same agreement."

Apple has been increasingly criticized for its App Store policies, both from app developers and government officials. Spotify has long waged war against Apple over the fees.

The U.S. Department of Justice and state attorneys general begun launching an antitrust investigation into Apple's App Store after developers continue to raise concerns over anticompetitive behavior.
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Comments

  • Reply 1 of 23
    Looking forward to contacting my current mortgage holder and asking them to 'rethink' what they charge me. And Also my credit card companies. I'll write them and ask them to 'rethink' what they are charing. Right? Because it all makes perfect sense...
    edited August 2020 mike1p-dogBeatsrepressthistwokatmewjony0DogpersonpulseimagesRayz2016pujones1
  • Reply 2 of 23
    mike1mike1 Posts: 2,808member
    Of course they are.
    BeatstwokatmewRayz2016
  • Reply 3 of 23
    Looking forward to contacting my current mortgage holder and asking them to 'rethink' what they charge me. And Also my credit card companies. I'll wrote them and ask them to 'rethink' what they are charing. Right? Because it all makes perfect sense...
    Is your mortgage holder the only of two in the world?
    repressthismpw_amherstInspiredCodetwokatmewpulseimageschemengin1
  • Reply 4 of 23
    entropysentropys Posts: 3,200member
    As it turns out, Apple has cut its fees in the past -- for Amazon. In 2016, Eddy Cue had proffered a deal in which Amazon would share 15 percent of revenues generated by new subscribers who signed up for Prime Video through an in-app purchase. This move directly contradicts Apple's stance of treating all apps and developers the same. 

    As if Eddy on his stupendous salary couldn’t figure out that would eventually become public and everybody would want in. Way to go Eddy! My shares thank you.  Anyway, more seriously now we know how Prime ended up there when there was a bit of a dispute going on at the time..

    in the end only Apple and Google will be able to afford a 15% slice of revenue from subscriptions. Isn’t that thought interesting.
    edited August 2020 repressthistwokatmewaderutter
  • Reply 5 of 23
    BeatsBeats Posts: 2,642member
    entropys said:
    As it turns out, Apple has cut its fees in the past -- for Amazon. In 2016, Eddy Cue had proffered a deal in which Amazon would share 15 percent of revenues generated by new subscribers who signed up for Prime Video through an in-app purchase. This move directly contradicts Apple's stance of treating all apps and developers the same. 

    As if Eddy on his stupendous salary couldn’t figure out that would eventually become public and everybody would want in. Way to go Eddy! My shares thank you.  Anyway, more seriously now we know how Prime ended up there when there was a bit of a dispute going on at the time..

    in the end only Apple and Google will be able to afford a 15% slice of revenue from subscriptions. Isn’t that thought interesting.

    Yeah that was stupid.

    Except Apple won't fire Eddie because services are up every damn quarter.
  • Reply 6 of 23
    BeatsBeats Posts: 2,642member
    Everyone pile on Apple!


    Looking forward to contacting my current mortgage holder and asking them to 'rethink' what they charge me. And Also my credit card companies. I'll wrote them and ask them to 'rethink' what they are charing. Right? Because it all makes perfect sense...
    Is your mortgage holder the only of two in the world?

    Bad analogy as these services can sell themselves.
  • Reply 7 of 23
    bsnjonbsnjon Posts: 33member
    The problem with lowering the fee is that, in reality, many of these customers pay exactly zero to Apple, sign they have signed up for these services and paid for them outside of the App Store ecosystem. 
  • Reply 8 of 23
    This is why publishers aren’t going after Google...

    Digital Content Next complains that Apple's 30 percent fee drives publishers away from direct audience revenue, pushing them into the "murky world of digital advertising."
    InspiredCode
  • Reply 9 of 23
    yojimbo007yojimbo007 Posts: 1,149member
    All this for 1st year 30%?  ( 15% difference in 1st year  subscription)
    The commission goes down to 15% after 1st year!

    Their claims of being hurt is way overblown.. there is no hurt... its just being spoiled and being opportunistic to jump on the band wagon in the present climate...🤦🏼‍♂️
    pulseimagesBeatspujones1
  • Reply 10 of 23
    They are not asking Google because nobody buys anything from Google.

    I think 15% sounds reasonable for newspapers if this would cover the traditional 10% platform commission (10-15% commission is common in many industries) + 5% overhead.  30% is common in areas where overhead is much higher (games w/ subsidized hardware, enormous download sizes, and multiplayer servers) or where there is significant rent seeking (Audible, etc.). The 30% fee originated with Nintendo in the 80s.  It was 10% commission plus 20% for cost of cartridge manufacturing. The App Store is a great place to find services revenue, but it should be for actual services offered instead of rent seeking. Apple should stick to the standard commission in business of 10-15% (10% is more common) and only charge for actual services beyond that. Think of this as limiting rent seeking to 10%. Just because there is rampant rent seeking in some digital services that are anti-competitive enough to demand it doesn’t mean that Apple should be given a free pass.  Most of these digital services got away with it initially because they made the transition from brick and mortar to digital (such as audiobooks).  Everyone talks about the commissions brick and mortar stores charge, but access to a digital platform has always been closer to 10% before overhead. This is also (not coincidently) what agents charge for artists and actors.  Brick and mortar has always been higher because they want to rent actual real estate. If I’m selling an app or reader content through Apple, they are my agent.

    I think Apple probably could keep 30% in some cases where they have more to offer, but it would be nice to see more areas of the store dropped to 15% when Apple is mostly just taking a commission and not offering much else. Digital reader app content (like newspapers) and one-on-one training video conferencing sessions definitely should not be charged 30%. That is clearly rent seeking.

    Apple will probably be able to fend these off for awhile, but as long as rent seeking is occurring they are going to continue to be attacked. This may end with government regulation forcing multiple stores if companies continue to fight back against it. I’m sure Apple would rather make less profit off the store then lose control. I’m not convinced that they would actually lose money since more reasonable fees would probably bring more content and purchases to the store.

    I’m mostly frustrated with Apple keeping certain apps off the platform. I would like to see xCloud. I strongly disagree with that decision and the rules around remote access apps and app collections in general. These apps will never replace the App Store, but make more sense in some contexts. People access other platforms as a last resort. Either it isn’t possible to do on device, uses too much processing for on device, or has strict compliance issues (finance, etc.) that require execution on a remote device.  Apple is being over paranoid that this will affect their control of the platform. Nobody expects Apple to review things running on a remote system just like nobody expects Apple to review everything a web browser can access. Put game streaming, remote desktop apps, VDI, and web browsers in a remote access parental controls category and call it good. If a game can run on mobile, people will prefer that 60-120 hz refresh rate and high resolution that they will never get through a streaming service. For another example, if you could run a Mac native app or a Windows app in Parallels, you are going to pick the Mac native app. No, I don’t want my remote apps to show up in App Store listings. That would be crazy. I’m also slightly frustrated that Apple can’t reduce rent seeking enough to allow Netflix, etc. to use in app subscriptions.
    edited August 2020 mpw_amherstBeatsmuthuk_vanalingam
  • Reply 11 of 23

    All this for 1st year 30%?  ( 15% difference in 1st year  subscription)
    The commission goes down to 15% after 1st year!

    Their claims of being hurt is way overblown.. there is no hurt... its just being spoiled and being opportunistic to jump on the band wagon in the present climate...🤦🏼‍♂️
    It is common for people to subscribe for a month, then unsubscribe, then subscribe again.
  • Reply 12 of 23
    Apple should charge them for hosting their apps, not just for sales. If they don’t like it, try going back to their old failing models.
  • Reply 13 of 23

    All this for 1st year 30%?  ( 15% difference in 1st year  subscription)
    The commission goes down to 15% after 1st year!

    Their claims of being hurt is way overblown.. there is no hurt... its just being spoiled and being opportunistic to jump on the band wagon in the present climate...🤦🏼‍♂️
    It is common for people to subscribe for a month, then unsubscribe, then subscribe again.

    They are referring to the Service Provider Fees charged by Apple going down after being available for 1 year, not a subscriber.
  • Reply 14 of 23
    Looking forward to contacting my current mortgage holder and asking them to 'rethink' what they charge me. And Also my credit card companies. I'll write them and ask them to 'rethink' what they are charing. Right? Because it all makes perfect sense...
    I realize you are being facetious but this is a perfectly acceptable tactic. Usually successful too. If the current rates on mortgages are a currently lower they know they can just lower their rate or lose all the interest income from you refinancing with someone else. They can still keep a good portion of the business if they just reset the rate on your loan. Same with credit card companies. If you are making on-time payments at the 15-20% rate and the alternative is you moving that balance to someones 0% promo they are willing to take a rate cut. All of this assumes you have good credit and have been honoring your obligations though. 
    entropysaderutter
  • Reply 15 of 23
    Eddy going to 15% for Amazon was the mistake.
    I think “politically” the best thing Apple could do is go to 15% for all subscriptions in the reader category, (netflix, prime video, newspapers).

    As for xCloud and other game streaming I see no reason why xCloud can’t have a web-app solution to avoid the app-store entirely, maybe it’s about game-controller api access to a webview on a technical level. Personally I don’t want multiple app-stores on iOS which is effectively what game streaming services are, it would be the thin end of the wedge. If they allow it for games, then we will get people wanting to do it for all kinds of things. One Microsoft app that “streams” all the office apps? Yuck.
  • Reply 16 of 23
    Rayz2016Rayz2016 Posts: 6,957member
    gnuloki said:
    Looking forward to contacting my current mortgage holder and asking them to 'rethink' what they charge me. And Also my credit card companies. I'll write them and ask them to 'rethink' what they are charing. Right? Because it all makes perfect sense...
    I realize you are being facetious but this is a perfectly acceptable tactic. Usually successful too. If the current rates on mortgages are a currently lower they know they can just lower their rate or lose all the interest income from you refinancing with someone else. They can still keep a good portion of the business if they just reset the rate on your loan. Same with credit card companies. If you are making on-time payments at the 15-20% rate and the alternative is you moving that balance to someones 0% promo they are willing to take a rate cut. All of this assumes you have good credit and have been honoring your obligations though. 
    Mortgage dealers rarely renegotiate the terms of the mortgage unless you run into difficulty paying it, or you reach the end of the agreed term. Why? Because you knew what you were signing up for. 
  • Reply 17 of 23
    aderutter said:
    Eddy going to 15% for Amazon was the mistake.
    I think “politically” the best thing Apple could do is go to 15% for all subscriptions in the reader category, (netflix, prime video, newspapers).

    As for xCloud and other game streaming I see no reason why xCloud can’t have a web-app solution to avoid the app-store entirely, maybe it’s about game-controller api access to a webview on a technical level. Personally I don’t want multiple app-stores on iOS which is effectively what game streaming services are, it would be the thin end of the wedge. If they allow it for games, then we will get people wanting to do it for all kinds of things. One Microsoft app that “streams” all the office apps? Yuck.
    No one is clamoring for more poorly written news. Amazon got the deal because they had the upper hand in negotiations.
  • Reply 18 of 23
    In terms of game-streaming I do think Apple are also aware of the danger of unregulated adult content in game streaming services and don’t want that in the app-store. Strip clubs in GTA are the least of it, trying looking in the Steam catalogue you’ll all kinds of deviant material. Remember the excessive hoo-hah over a swimsuit shop app? 
  • Reply 19 of 23
    At the end of the day, there is no legal requirement for stores to give every seller the same deal. That's not really an antitrust issue. Walmart negotiates individually with every company that wants products on their shelves. 
  • Reply 20 of 23
    Stupid thing to demand. Why is 30% impossibly too much but 15% is perfect? Why not demand competing app stores where you can charge what you want and not pay anything for the service beyond a small ongoing fee to list your products there? That way Apple could get its 30% cut, publishers can get 100% of the the sales on one or more alternate app stores and consumers can decide whether they would rather have Apple's app security or pay a lower price and a wider selection of apps by taking on risk? That's my single biggest gripe about Apple: They have no respect for their own customers. Apple treats us like children incapable of making informed decisions.
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