Friday, September 7, 2018

Apple and Google Face Growing Revolt Over App Store “Tax”

Mark Bergen and Christopher Palmeri (Hacker News):

Netflix Inc. and video game makers Epic Games Inc. and Valve Corp. are among companies that have recently tried to bypass the app stores or complained about the cost of the tolls Apple and Google charge.


On Tuesday, video streaming company Netflix said it’s testing a way to bypass Apple in-app subscriptions by sending users to its own website. Currently, Netflix users on iPads and iPhones can subscribe via the App Store’s in-app-purchasing system. This makes subscribing simpler, but also gives Apple a 15 percent cut of those subscriptions. And as of May, Google Play billing for Netflix was unavailable to new or rejoining customers, according to Netflix’s website.

On iPhones in the U.S., Netflix was the No. 1 entertainment app by consumer spend and the most downloaded entertainment app on the Google Play store over the last 90 days, according to App Annie, which tracks the industry.

More recently, Epic Games, the maker of hit video game Fortnite, opted to ditch Google’s app store.

Dan Masters:

A more honest description:

“App Store subscribers comprise a large chunk of the Netflix subscriber base.

Therefore, Netflix is attempting to find a way to retain the otherwise-unsustainable $10 price point, without resorting to the recently tested advertising.”


I worked on an app that is in the same category as Netflix. A week before launch, Apple chose to reject us in spite of months of meetings and reviews with their app teams and assurances we were in-bounds since we were working with them for launch featuring.

It came down to the fact we required an email address and password for IAP so you could bring your subscription to the web or other platforms. While everyone else in the category did this, they decided that policy was going to change and we were just going to be the first people to deal with it. Since having an email-based account was core to the architecture and the UX, I went through a week of refactor hell to make emails/passwords optional to meet our launch date.

Since other apps still get to do this, it’s clear the policy change message was BS. I’ve suspected a lot has had to do with Apple’s ambitions in the streaming space and their desire to be in a position to offer bundling and other over the top services. They’re already trying to control the UX with the TV app and are offering companies better rev share rates to do the integration work.

It seems like Netflix is daring Apple to pull them from the store. If that’s what’s happening then I applaud them. I understand that Apple may think they’re protecting the consumer by creating a walled garden, but as a developer whose livelihood is tied to their decisions, I’m tired of being jerked around.

Previously: That 30% App Store Tax, 2 Years of App Subscriptions 2.0, App Store Subscriptions And You, Valve’s Steam Link App Rejected From the App Store.

Update (2018-09-08): See also: Merge Conflict.

Update (2018-12-31): Dan Gallagher:

Epic Games, the developer of the Battle Royale-style shooter game, is capitalizing on that popularity by launching its own app store. The company’s founder and CEO, Tim Sweeney, has long been critical of the app store business models propagated by Apple and Google, believing both companies take too large of a cut from app sales relative to the costs involved in running the stores.

Epic’s solution is to allow developers to keep 88% of the revenue their apps generate compared to the standard 70% allowed by Apple and Google. The first version of Epic’s store went live earlier this month for games designed for the PC and Mac and it has already had an impact on that end of the market.

9 Comments RSS · Twitter

The AppStore tax for regular apps has always been a joke, but when it comes to apps for content sites like Netflix, Amazon Prime, Audible etc, it’s just a blatant scam that hurts Apple’s own customers. I hate that Apple do this, it leaves a really bad taste.

Figure credit card fees plus other expenses cost Apple 5%. The other 25% they charge on top of that for apps is, in theory, their fee for providing curation, discoverability, searchability, and otherwise making it better for a developer to list their app with Apple than to put it up on their own website.

Charging that extra 25% for purchases that have nothing to do with buying the software is just plain greed on their part, and could very well get Apple in deep legal trouble if/when antitrust enforcement in the US stops being a silly joke.

Wonder how bad Jobs’ “sweet solution” (web app only) would be for Netflix. Would work for me.

the problem is not the tax, it's the fact that you can't install software on your phone yourself. at least macOS still has that, iOS should go that way.

> Wonder how bad Jobs’ “sweet solution” (web app only) would be for Netflix

Haven't tried it on mobile, but on the desktop, Netflix works perfectly in the browser.

Yeah, this has always been a problem. Remember when Amazon could duck the tax by pushing people to mobile Safari and then the iPad launched and now that became forbidden? Remember what also launched during that time frame? If you said iBooks, you win the prize!!!! It's always been an anti-competitive joke, the tax on services.

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