Are you cool with Apple taking 30% of your hard-earned cash?
Hey hackers,
This morning I stumbled on this tweet (and this article) by the co-founder of Basecamp about their ongoing struggle with Apple's monopolistic practices towards software developers.
For those who don't know who DHH is, he's one of the original indie hackers. He co-founded Basecamp, refusing the VC path all along and advocating for bootstrapping software companies to retain control and equity. Which if you are on this site I'm guessing you are all for.
I've been developing my app for the web and having a mobile app would be a great fit for it as well but I am definitely NOT cool with letting Apple take 30% of my hard-earned income for the privilege of being on their platform and potentially forcing me to integrate with their payment system. The truth is that the state of HTML and browser technology on 2020 is pretty awesome and a web app can do almost everything a native app can do - perhaps more - rendering mobile apps optional at best.
Now, you might be thinking "well, Apple created the platform so they have the right to charge you a premium for being on it". I agree... until I stumble on subtle details on their monopolistic practices, like the fact that they force iOS users to use Safari as the default browser, and then disrupt web app's UIs (on purpose, IMO) by obscuring your app's bottom navigation toolbars with their stupid "browser chrome" (details on how to overcome it here). IMO, this is all done to force users and makers to pay up for being on their platform.
I can't think of a better place than IH to have this conversation. At the very least, I think we need to be as informed as possible on what the landscape looks like for software businesses. It would be great if other makers in here could share their experience with this.
Cheers,
I believe the main issue is that they aren't allowing his app based on the fact subscriptions are managed elsewhere. They want people to have to pay via the app.
Which is ridiculous, because other apps (like Netflix) you don't pay via the app, you manage your subscription in the website but are still allowed to access premium features in the app.
I found his Mafia references a little off key because, I mean these are the terms and conditions you accept. Yes it sucks, but Apple sets the rules in their platform, don't expect charity from massive organizations
Actually Phil schiller gave many suggestion, what DHH could do is provide a link to register in the app that directs to their site. But he has not provided any link to redirection. Also from Apples perspective, there are a number of costs associated with a App distribution platform. like maintaining top tier multi gigabit worldwide 12 zone networks, apart from developer costs, billing and taxing, sending invoice to the tax department, Developer payouts. All of that costs money, DHH is a sort of overreacting or he hasn't thought it through. Google also takes 30% revenue on its Playstore but nobody questions that. Netflix is not the correct example because reader apps which just consume content are except from the rule, so even book reader and comic reader apps are also exempt. DHH's hey is a email app not reader app its use is not to read email, but to send emails aswell.
Exactly! Those rules only apply to small developers, not Big Tech. When the App Store started, the web was an open market and Apple NEEDED these big tech companies on their platform. I know it's been a while, but we can all probably remember that at the time, Apple being able to bring those big services onboard was a necessary step on their product adoption strategy. Otherwise their platform wouldn't be more than a little novelty product.
But now that they have accomplished that and have a major slice of the market pie, they treat new developers the way a cartel treats competitors. That's not a level playing field like the early internet was. Those are monopoly tactics and I personally hope that Europe sets a positive precedent on this through their antitrust case.
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Without apple there would be 0% revenue, sharing 30% is more than reasonable. In my world, if you don't understand that making money goes along with sharing the hard-earned cash. You're most likely not set to succeed in business.
@codeables
^ not true at all
Even if that's the case the point about the fairness of monopolistic practices from Big Tech still stands.
It's their store. You can't just walk in and demand your own rules.
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It is true for many, especially indiehackers. It's not true for a lot others, like big corps with marketing muscle.
For indiehackers, if you build great products, it seems Apple and Google play are more willing to recognize your work. When they feature you, they basically give you users for free. That's great for the 30% cut because devs can focus on quality, not being the loudest.
I'm surprised no-ones mentioned it yet, but Progressive Web Apps(PWAs) appear to be really gaining in popularity. And Apple has added some support for them, albeit slow.
My latest app is a PWA for this and many other reasons. And most people I've shown it to don't seem to even realize it's different from a traditionally downloaded app. I just added a popup that says "download this app..."
until there's no support for push notifications for PWAs on iOS, it can't act as a substitute for a native app in many cases :( especially in case of Hey (DHHs app that all of the buzz is about), which is an email service/app
Finally, someone said it.
Find PWA apps here, pwainside.com
They can feel it slipping... the web is getting too good. Building a fully native app is increasingly becoming an economic death sentence.
To those arguing it's the price you pay for access to the marked: When things become systemically relevant, when the number of alternatives converges close to zero, the "my house, my rules" does not really apply anymore. Especially when you reign that market like a monarch. While I am deeply rooted in the Apple ecosystem (as user and as developer) I applaud any antitrust movement. It's way overdue.
While I do think 30% is too much, especially for the (shitty) service they provide (don't get me started), I think the bigger problem is the inconsistent implementation of their rules. Inconsistency of big vs small companies, but also inconsistency across releases. You may just want to change a color, release a new version of the app and a different reviewer might just come up with issues that suddenly tank your hole business idea. All you wanted was to change that color!? Being at the mercy of this process can be a big risk to your business and a comparison to the Mob does not feel very off to me.
If this all was about UX (as I heard arguments before) they could have rules that every app needs to make their subscription information available and manageable in standardized way. I don't think anyone would have a problem with that. Imagine having an official subscription app that holds all your subscriptions in one place - how cool would that be?! But the reality is very different. It is just about money. And frankly speaking - the current purchase and IAP UX is horrific.
I understand we just suck it up because we want access to that market. But that does not make these practises OK by any means.
👍
@tcurdt this is great, thanks a lot for sharing your insider experience. I for one dislike the idea of investing my time and energy creating a brand, only to have the Big Tech cartels control if and how I can access my own customers. I think that the entire ecosystem would be better off by betting on open standards and creating strong brands that can stand on their own instead of flimsy companies where your entire endeavor can be destroyed by a single gatekeeper.
Not anymore, no. And it's not DHH's recent public spat with Apple that convinced me - just Apple's long, slow, consistent inattention to the app store.
For a similar example, Valve's Steam takes around 30% from developers for apps sold on their store. Valve is a 3rd-party PC game distribution platform, and they work for that 30%. The Steam store has a myriad of features to help promote games, organize regular exciting sales to bring customers to the app, and continually add more features to the service to make developers' lives easier. Are they perfect? Hell no, a lot of this they've only really made real progress on since rival stores opened up and forced them to focus on actually competing. But they are competing for that 30%.
Apple doesn't compete, they don't really help you promote, and they've only really implemented one tame store redesign in years. The one thing they bring to the party is "admittance to iPhones," which is... sketch at best. We'll soon see how well-protected that one feature is, I guess.
I'm not advocating for 0%, or even fees similar to payment processors, because Apple clearly offers more than them. But 30% is too high for what they currently offer.
My ideal solution is Apple offering a fair way for developers to get their apps onto phones without going through the App Store (I think I'd still like them to be reviewed, for security purposes, but it could be a mostly-automated review at that point), and for Apple to continue to charge 30% for the App store, but then make it worth 30%. As an Indie PC game developer, you can choose to forgo Steam, but people rarely do, because Valve earns that 30%.
I don't think an automated security review is enough. One very important service that Apple provides its users is protection against scams. Apple tries to be strict about these but there are still plenty that get through.
No, I don't think automated review is enough either, but that's why I said "mostly." =) That said, some kind of review instead of just side-loading un-checked apps is definitely desirable.
No and I won't be producing things for Apple users also for one other reason: they insist you need to have a Mac to develop Mac and iOS apps.
Taking 30 % would be okay only if there was alternative option how to install apps without the App store. If there is not, it is a monopoly and should be fined for doing that. I hope they will.
I do agree with you. It's true that the App Store "curates" content but it's also true that they become an exclusive gatekeeper between the hardware you purchased and the software you can run on it. Not cool.
Not cool as a user, but very cool as an investor lol.
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For what they do and how easy it is to implement IAP, Subscriptions etc. and the quality as a developer, I am totally fine with 30%. All this drama is totally exaggerated. I like DHH but just because he's DHH doesn't mean he gets any preferred treatment. That's my opinion on this.
Well, their store, their rules. If you dont like this, sell your stuff on Google Play.
Everyone here Build things to monetize and Apple offers you Access to a huge market. Taking 30% for this is absolutely ok. You all would do the same, thats fact. Even the ones complaining Right now.
I am fine paying 30% to have access to a market. But for multi platform apps it feels like you just access to another payment method that takes a 30% cut, versus ~5% something for Stripe, Gumroad, etc. How are you suppose to financially deal with the fact that one distribution channel take a 30% cut? Set the price 30% higher?
Also I am not fine with the guidelines they put in place to enforce this: the fact that you cannot offer another option for people to sign up/subscribe aside from in-app purchase and that you cannot advertise it (no link to external subscription page). You basically end up with in-app purchase, or a single "Log in" page with no sign up.
Are you cool with getting access to a huge market with valid credit cards for a 30% fee?
I mean sure I would like the fee to be smaller, but the App Store is a huge market of people who will buy apps that you get access to for a price.
None of the big tech companies seem to cut Apple in for 30% of their earnings. Not Amazon, not Netflix, etc etc. Their funnels get them customers independently, they monetize them and then they deliver the service through multiple channels, one of which happens to be iOS apps. What is wrong here is that those rules only apply to you and me, not big tech. That's cartel behavior, not how a free market should work.
I tell you what I'm not cool with. I get 70% (few bucks) and I pay 20% tax from that in my country. Apple takes 30% (billions of dollars) and pays 0.005%. It's ridiculous.
As you said, it's hard-earned money for me and I pay taxes like everybody else.
On the other side, they are a big monopoly that can even persuade a government of EU country to lower tax rates for them.
I appreciate Apple is creating the platform allowing developers sell apps and earn money. However, I think developers contribute more to society and have a bigger value.
As of yesterday announcement with iOS 14 Apple will now let you set your default browser to other than Safari.
Also I'm in the middle of creating a mobile app with in app payments and I don't like the idea of giving them the 30% cut, but I don't know what I can do with that.
@Selfmadedeveloper this is fantastic news! It's a step forward for iOS and it's long overdue IMO.
That means that if your web app can be accessed in its entirety through a browser and you can collect payments through your existing payment gateway.
IMO, if the App Store is your main source of traffic and you benefit directly from the amount of users and network on the App Store then 30% (although quite high) is a reasonable price to pay. Without access to such a platform you'd have no traffic or users whatsoever.
But, in the case of HEY, they created demand and recruited users via other platforms and channels. Apple's App Store did not play a single part in the amount of interest and success of HEY. In this case the App Store basically functions as a glorified file storage system. To pay 30% of your revenue for file storage is absolutely ridiculous.
There are two sides to this case, but it's unfortunate to see Apple abuse their power and make inconsistent decisions at the cost of many businesses and developers.
Wish I could complain about making slightly fewer millions like DHH haha. The bottom line is it's their store, you don't have to support Apple products, but if you want access to their users then well come to capitalism. Steam charges 30% as well, as do many other digital stores.
Also people are not really thinking clearly if they assume Netflix, Spotify and others don't pay Apple, every company cuts deals with enterprise, sure maybe they don't follow the exact same rules as everyone else but that's pretty normal as well.
Actually DHH is most well-known for creating Ruby on Rails which made Web 2.0 app a lot easier to develop. It's slow but it's really the first successful web framework that influenced everything we do today. Was a big fan of him until seeing too many of his seemingly angry tweets - "because I think this way, so I am right, and others are stupid to not do things my way, and I am angry."
I'm actually not a fan of DHH either, I cringe at most of his tweets but the guy has a point and I think it's a valid one.
Is Apple's 30% that different from
- What YouTube keeps from its content creators
- What Uber keeps from its drivers
- What Amazon keeps from its 3PP listings
- What GrubHub charges restaurants
Even Google's business model has been to put in more ad slots so that you are pushed down in results and have to start buying ads.
I've used marketing partners they take away 75% because they own the channels. 30% is quite decent depending on who you compare to. but the basecamp guys, they are smart but basically complaining because other people don't operate the way they wish them operate.
You can split it into 2 different parts : A customer acquisition fee and a distribution fee. If I understand correctly, retailers used to charge 50% for shrink wrapped software. So Apple is charging lower by that comparison.
In any case, it's clear that people are not happy with Apple's fee model. Given all the anti-trust issues, I don't think it's sustainable. They need to come up with a better model that is better aligned with the value they provide developers.
Case closed. You don't agree with their practices, therefore don't expand on their platform.
Is it fair? I think yes, they provide a platform, distribution and users for you to monetize... they should get paid for it.
30% markup is not low but its not on the scale of designer jeans or even coffee. But your text highlights other issues that imo we should be beating Apple up for.
You know Bezos invested in Basecamp and has been paid back 5 times over, right?
Web apps are cool, getting ever cooler and yes its a way around these platforms - but we're not there yet (general users are so used to downloading apps that actually not downloading apps can confuse them).
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lol. Apple fanboyism just reached new heights.
Given the current state of web technology, unless a product uses a software extension only they provide, there's nothing "utterly necessary" about their service.
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That's fair.
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It's not true that you wouldn't be making money on an iOS-based customer if it wasn't for Apple. That same client could've come to you elsewhere, purchased a subscription and then downloaded the app on the App Store. Do you pay a Netflix subscription? or an Amazon Prime subscription? Did you discover those services and payed for them on Apple? You probably didn't. Yet you access them on your phone because of convenience, not because Apple enabled those services for you.
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Why doesn't it make sense to compare big tech to you or me? How is it relevant that those companies IPO'ed? Should Amazon in 1997 be treated differently than Amazon in 2020? The point is standing for free markets so that YOU have a chance of becoming the next Amazon or the next Netflix if the market decides so, not Apple or any other Big Tech oligopoly.