For the record I don't even really like Spotify that much, I don't use the app nor am I subscribed. I do like my iphone but Apple is in the wrong here.
Is the work the same for them too? They all charge a percentage of sticker price. Oh and none of those stickers say free.
The tension I see is that Apple’s work is correlated with number of developers and number of users. They very much have a long tail of developers and apps with effectively no users or income, but who still cost Apple money. Maybe this is actually covered by the $99/yr fee but maybe not. Then at the other end, the top 0.001% of apps get so much use (downloads, IAP api calls, support requests) that account for the majority of App Store costs. Apple runs a CDN just for apps like facebook and YouTube to make the downloads faster. Support staff will tell you how many people blame Apple for what happens in apps - famously when Snapchat was A/B testing videos Apple support was swamped with FOMO’d teenagers wondering why they couldn’t download the latest update. Apple probably loses money on the facebook app (ignoring downstream revenue).
My point is that Walmart costs are pretty linear with the number of boxes on the shelf, and none of them are “free”. As long as we have free apps and it’s cheap to be a developer, companies will need to over compensate by using higher fees.
Edit: Spotify is the collateral damages caused by Apple needing Snapchat, but also needing to fund that support costs somehow.
Also Spotify - the company in question - has a terrible price structure where they give their first margin to Apple and the rest of their money - and then some - to record labels. That basically means they’ll always lose money to record labels but they also can’t win if they pick a fight with them - just ask Taylor Swift.
The dev work is the same for building those thing as iOS and Apple fields support questions about those things from naive users like the Snapchat users you described.
If the iOS 30% cut is justified then it makes no sense not to charge say Notion or OpenAI for subscriptions transacted from Safari. If that seems ridiculous then maybe it’s time to question the iOS cut because it’s inconsistent.
Do you follow the same rule you're advocating for? When your app some day makes more than 30% margin on customers revenue, you're going to lower your prices, right?
Yes. Though since this is voluntary in the same way that having internet access is "voluntary", I'm going to say that isn't relevant here. Similarly, there is competition in the same sense that you have a choice of more than 2 parties to vote for.
> How are we to decide what number is right?
Don't know, but I do know that 30% is wrong.
If there really was competition, and this was voluntary, there would be no way they could charge 30%.
The only change of pricing ever made within a decade was made because of a threat of an anti-trust lawsuit and copied word for word by Google almost instantly after that.
Safe to say that the competition is dead.
Keep in mind that, for the vast majority of developers, Apple gets $1.50.
Apple gets $3 only if/when you hit $1 million in annual App Store earnings.
You should see the markup these retailers charge on accessories. If 30% revenue upsets you then 300% on HDMI cables, USB cables, game accessories is going to blow your mind.
In fact, when 30% was announced, it was considered generous compared to what developers were paying Best Buy, CompUSA, mobile carriers, etc before that.
I understand storing/downloading binaries isn’t free. But it’s nowhere near the same logistically.
Margins on digital goods are not bound by the same rules of economics as margins for physical retail sales.
They have costs. And they allow free apps! Every free app that gets downloads and doesn’t monetize at all is pure cost for them.
15% until you hit $1M in annual App Store revenues. Most developers will only ever pay 15%.
Apple has ads in the App Store.
I am not asking for a PhD thesis. I am asking for five minutes of middle school level googling.
It used to be that you got to that audience by doing something deplorable for a Hollywood film producer or a newspaper publisher in New York. Now you “just” have to pay a 30% fee. It turns out that deplorable acts scale a lot worse than eCommerce. And in my opinion, the deplorable approach denied us a lot more unique creative output than the 30% model does.
Spotify is right, sure. But these sorts of monopolies on audiences have existed forever.
I have not really thought about this much until you brought it up, could you share some data in this regard? How much has the revenue of record labels declined since Spotify became prominent? I can't find good stats about that, I can just see the recorded music industry revenue has grown quite substantially and consistently since they came on the market, and was in decline before they came on the market [1].
[1]: https://www.statista.com/statistics/272305/global-revenue-of...
It is also wrong—though in a different sense—for Spotify not to acknowledge the irony of them complaining about Apple being a middleman who takes a cut of the work of creative people when that is also their own business model.
I get why what Apple has in place is onerous. I also see that Apple needs to get paid somehow. So what’s the third option?
Edit: My vote for the third option has always been, and remains, allowing of side loading apps. And this can be only for users who enable it. But it seems like this solves every complaint people have about the App Store.
What makes Apple entitled to a cut of Spotify's revenue?
Spotify isn’t giving Apple a cut of revenue per se, so much as it’s spending money on ads for a specific audience in a specific way.
I suppose Google too could make Android phones more attractive.
It's understandable that Spotify doesn't want to pay that cut, and they can try what they're trying, or also just leave the app store.
Speaking of entitlements, they're also not entitled to influence on small countries law makers, but they can try what they're trying with that too: https://www.bloomberglinea.com/english/spotify-threatens-to-...
I think the third way is to allow side loading apps.
it's another middleman taking a cut
They can fuck off.
While I agree with some of their points, it really is hard to root for them as a company.
The owner of a marketplace should not be able to compete on that marketplace without strict separation of power. Apple has huge advantages compared to Spotify when it can advertise any way it wants, doesn't pay commission fees, and can give itself priority for integration with systems like Siri.
Every retail chain has in house brands.
Your rule change would affect every retailer, grocer, technology company in the USA; negatively.
Profits in other areas don’t come close to profits from their own brands.
In fact, the non-house brand stuff is actually displayed MORE prominently.
surely if I upgrade it tells me the price before I purchase the upgrade? they are complaining that they can't advertise it in the app?
>-Let our customers request an email or other communication telling them about the ways they can save money;
seems like "let our customers request" is doing a lot of work here
>-Provide our customers with different payment options beyond what Apple mandates (e.g. a credit card or PayPal, etc.); or
ah, so no crypto?
>-Deliver new product enhancements or introduce new features to our customers without Apple’s explicit approval.
so they don't want to have to be approved to be on the app store... aside from the fee, these are the fundamental complaints they list. seems a bit whiny imo.
You're basically not allowed to list your prices or describe how to subscribe (unless it's via Apple's in-app purchases, where they take 30% for doing nothing).
> ah, so no crypto?
No, and no credit/debit cards, PayPal, etc. either. Only Apple's in-app purchases are allowed on Apple platforms. You're not allowed to hint that other payment options are available, either.
I'm not here to argue the app store pricing, it's been discussed to death. that being said, I disagree with you that they do nothing.
>No, and no credit/debit cards, PayPal, etc. either. Only Apple's in-app purchases are allowed on Apple platforms. You're not allowed to hint that other payment options are available, either.
How do you think people pay for things on the app store if not with a credit or debit card? You can also use paypal (https://support.apple.com/en-us/HT202631). Seems like you are just going off your own misunderstanding of Spotify's phrasing. As to the other options, that seems consistent with not being able to market off-app purchase options. What would those other payment options be, btw? I just checked and on their website they only take credit cards and paypal...
Whine and cry that the contract they have with Apple is egregious.
Hopefully a federal judge stuffs Spotify just like Epic was stuffed.
Don’t like the market? Build one. Don’t like the devices? Build one.
Don’t like Apple’s walled garden? Build your own.
Just like the federal judge told Epic: ‘The marketplace allows you to build a competing service, do so. Also, you signed a contract. Heed it.’
