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On Avoiding or Embracing Apple’s In-App Purchase Cut

Jacob Kastrenakes, writing about the Hey/Apple App Store dispute for The Verge:

Apple takes up to a 30-percent cut of revenue on in-app purchases and subscriptions, so developers try to avoid signing up users within their app whenever possible to avoid the steep tax.

I think it’s essential to point out that this is not true — many developers embrace Apple’s in-app purchasing. No dispute about it, a 30 percent cut is high. Even a 15 percent cut (what Apple takes from subscriptions after the first year) is high compared to simple credit card payment processors. But the App Store is more than just a payment processor, and for some developers, Apple’s cut is either happily worth it or at least begrudgingly worth it. One reason some developers embrace it is that they know users like and trust Apple’s in-app purchases — the user experience is excellent.

The issue exemplified by Hey is that there are cross-platform apps/services that don’t want to use Apple’s system, period, full stop. They don’t need to, or don’t want to, or think Apple’s cut is too high, or perhaps their business model literally can’t support giving up 30 percent of revenue — whatever. They’re not trying to collect money from users within their apps by circumventing Apple’s IAP APIs with their own payment processing — they’re simply willing to forgo in-app commerce completely and sign up all their users on their own, outside their app.

Netflix stopped offering in-app subscriptions on iOS in 2018, and Spotify charges extra to make up for the lost revenue.

Netflix and Spotify shouldn’t be lumped together. Yes, both object to the size of Apple’s cut, but Netflix simply decided to forgo signing up users in their iOS app. That’s exactly what Hey wants to do too. Spotify, on the other hand, wants to have it both ways — they want to sign up paying users within their iOS app but they don’t want to pay Apple’s cut. Maybe you think Spotify is right (me, I think they’re hypocrites), but theirs is a very different stance from Netflix and Hey’s.

Wednesday, 17 June 2020