Friday, June 11, 2021 [Tweets] [Favorites]

Fanhouse vs. Apple

Jasmine (via Hacker News):

I cofounded @fanhouseapp 8 months ago to empower creators to monetize their content. We pay creators 90% of earnings. Now, Apple is threatening to remove Fanhouse from the app store unless we give them 30% of creator earnings.

[…]

In writing and over the phone, we explained to Apple that we could pay them 30% of our revenues (from our 10% take rate). It’ll be harder to cover costs and build features as a startup, but at least it’d be coming from us. Apple insisted on taking 30% of creators’ total earnings.

Apple:

If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc. Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.

I don’t like this rule for many reasons, including that it makes certain business models, like selling e-books, impossible because Apple’s 30% would mean losing money on each sale. And it doesn’t seem fair for the hardware platform vendor to get a larger cut than the site/app/content platform that connected the creator and fan and delivered the content.

That said, reading the rule, it seems very clear, and I wondered why Funhouse would go to the effort of developing an app that tries to get away without using In-App Purchase when they’d only be forced to remove it.

That is, I wondered until I saw that Fanhouse’s presumably largest competitor, Patreon, gets to do it.

Jacob Kastrenakes:

Apple allows Patreon to offer third-party payment solutions for creators rather than use in-app purchases, avoiding the fee. Other apps aren’t afforded that privilege. Apple and Patreon did not respond to a request for comment on the arrangement.

Nick Heer:

I tried upgrading one of my subscriptions to a level that had entirely digital perks, and Patreon threw up its own payment form. I tried subscribing to a creator account and once again saw Patreon’s own form, not an in-app purchase dialog.

I don’t understand the distinction between Patreon and other apps that sell content. But, whatever it is, Apple seems to have agreed last year when it approved Fanhouse that it fell into the same category. Now, it’s changing its mind about Fanhouse, but presumably not about Patreon, so it’s even less clear what the rules are:

Why do big corporations that can afford to pay get the biggest breaks?

There’s also the famous rule created for WeChat:

Apple:

(vii) Apps may enable individual users to give a monetary gift to another individual without using in-app purchase, provided that (a) the gift is a completely optional choice by the giver, and (b) 100% of the funds go to the receiver of the gift. However, a gift that is connected to or associated at any point in time with receiving digital content or services must use in-app purchase.

Does the 100% mean they lose money on credit card transactions? And why can you give money to other users and buy them physical goods, or buy ads from the developer of an app, but you aren’t allowed to tip the developer of the app?

Previously:

Update (2021-07-02): Nilay Patel:

Patreon’s Jack Conte tell us that the company doesn’t have a special deal with Apple to avoid App Store fees… but it’s still unclear why Patreon doesn’t have to pay, while others do.

7 Comments

Kevin Schumacher

I would say, without looking into it much, that it's because some percentage of Patreons offer either only physical, or both that and digital, rewards. IAP can't cover physical rewards, period. I don't know if Fanhouse (this being the first time I've heard of it) offers physical rewards? A brief review of their website seems to indicate not.

Also, Patreon charges "patrons" one monthly combined charge for all artists they patronize (wrong word... are patrons of?). Some amount of that may or does contain physical rewards, and it would be incredibly confusing to customers if it had to be split into "ok you pay through Patreon for this and Apple for that, but if you change your reward tier on this artist from physical to digital, then you have to switch to paying Apple, or vice versa." I'm guessing it ends up with everything getting lumped as physical.

And yes, I know, there are other policies Apple insists upon that end up making things more confusing for customers. But I don't know if I can think of another example where the result of an exact application of the precise rule would end up splitting what can be paid for with IAP and what can't to the point where you're paying two different companies through the same app for, from the customer's point-of-view, the same thing.

Inertia, or lack thereof, and Patreon's relative size (they're a gnat compared to Apple, but *the* subscription crowdfunding site, for now at least) play into Patreon's favor, too, of course. But in this case I think there is at least a credible argument that it passes the sniff test.

Also, re: Fanhouse, this tidbit from their FAQ:
> Note: Currently we are unable to support adult content creators due to restrictions from payments 3rd parties.

Yeah it's not the payment processors you have to worry about, per se. Ain't no way Apple is letting you sell porn through your iOS app.

"Does the 100% mean they lose money on credit card transactions? "

I suspect with WeChat the money is going from the user's WeChat Wallet to the recipient's WeChat Wallet, so a credit card wouldn't be involved.

@Kevin That’s an interesting theory. If that’s really the policy, it seems like there would be some creative ways for others to take advantage of it.

Honestly, at this point I just want a government somewhere to come down on Apple like a ton of bricks. So tired of them attempting to squeeze blood from a stone.

Other than the fact that literally all of my friends are on iOS and use iMessage/FaceTime pretty exclusively, I would have jumped ship long ago. Getting seriously tempted to do it anyway and attempt to drag my friends over to another messaging platform.

The App store is looking more and more like taxation, not just in concept but also in terms of tax advisors, tax evasion and all that.

It’s not transparent nor fair and it’s one of the reasons why I haven’t learned app development

Setapp allows you to unlock iOS apps by scanning a QR code. How is that getting past review? Maybe it’s because the feature is well-hidden.

@Nate Not sure, but I think Setapp is able to do that because of the multiplatform rule.

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