Apple Going After Patreon
Sarah Perez (MacRumors, Hacker News, Slashdot):
Apple has threatened to remove crowdfunding app Patreon from the App Store if creators continue to use unsupported third-party billing options or disable transactions on iOS, instead of using Apple’s own in-app purchasing system. In a blog post and email to Patreon creators about upcoming changes to membership in the iOS app, the company says it’s begun a 16-month-long migration process to move all creators to Apple’s subscription billing by November 2025.
Patreon also informed creators it will switch them over to subscription billing as of November 2024, but they will be able to decide whether to price their memberships at a higher fee to cover Apple’s commission or decide if they want to absorb the fee themselves.
[…]
Despite Apple’s rules and policies, Patreon had existed in an odd sort of gray area, as some of its subscription-based offerings could be consumed in its app while others could not. Another possible reason for the Patreon exception was due to the fact that many users didn’t come to Patreon itself to discover creators and content, Patreon CEO Jack Conte told tech news site The Verge in 2021. Instead, the discovery took place through other channels. Though the company admitted it didn’t have any sort of special contract with Apple to avoid the App Store fees, the app had been able to skirt Apple’s in-app billing requirements for some time.
The guidelines are famously unclear, so you have to look at the behavior of App Review, not just at what’s written. Patreon is a well-known app that’s been around for a long time. Apple likes to frame these sorts of situations as, “Patreon has been out of compliance for 10 years and we just want them to become compliant.” Left unsaid is that the App Store, which is supposedly protecting us, supposedly took a decade to notice that they were breaking the rules. So, no, I don’t think App Review is that out of touch. This is just what Apple says when it decides to change the rules. When the change is in favor of developers or customers or regulatory compliance, they announce it on their developer blog. When it hurts everyone other than Apple, it’s not officially a change—you were wrong all along.
The best that can be said of the change is that it brings some consistency, in that Patreon and Fanhouse are now treated equally poorly. If you are considering submitting anything in the creator space, now you know exactly what to expect.
If Apple promotes In-App Purchases from third-party developers at all, I could not find an example in the App Store. Even if it did, Apple would not be a bigger draw for people who make their living on Patreon than those individuals themselves.
[…]
This is both a naked attempt to take an outsized cut from independent creative professionals, and a more consistent treatment of In-App Purchases. There are so many unanswered questions. Why was Patreon allowed an exemption in the first place, and for so long? Why did Apple change its mind late last year but also permit a long transition period which Patreon will complete next November? What changed? It is not as though Patreon is untrustworthy, or that cancelling a subscription is a laborious Amazon-like or New York Times-esque process.
[…]
The 30% fee is also notable. As far as I can tell, only a handful of Patreon users would exceed the million-dollar annual threshold for Apple’s Small Business Program. That is, everyone who earns less than a million dollars per year through iOS Patreon pledges should, in theory, fork over a 15% commission rate to Apple. But it appears it is Patreon itself which is subject to the 30% rate.
[…]
Apple’s 30% commission is at least double the rate charged by Patreon itself, and only the latter has any material effect on the relationship between a creative professional and their supporters.
There are many different ways of using Patreon. AltStore PAL is using it to monetize apps sold outside the App Store, and I wonder whether this is what spurred the change from Apple. At the other end of the spectrum, sites like Heer’s and mine use it, not to deliver in-app content, but essentially to collect tips—which in other contexts, such as WeChat, Apple does not tax. Perhaps we are collateral damage from a one-size-fits-all approach.
It’s one thing to argue that Apple deserves to be compensated for its IP when someone is selling an app that heavily depends on frameworks that Apple developed. But yoga lessons through a webcam? Writing or making music or videos—possibly not even using Apple’s platforms? Apple wants 30% in perpetuity just because the user tapped a button in a third-party app vs. in Safari.
Any creator currently on first-of-the-month or per-creation billing plans will have to switch over to subscription billing to continue earning in the iOS app, because that’s the only billing type Apple’s in-app purchase system supports.
Patreon has been around for a good ten years on iOS. Ten years in, Apple has come to them and demanded 30% of all transactional revenue in their app.
If you in the EU had left the App Store and were offering your app in an Alternative Marketplace and using Patreon as the monetization behind it, and your users are subbing in the Patreon app, now Apple will be taking the Core Technology Fee plus 30% of your revenue. They can tax both sides of the equation.
This is so gross. 👎🏻 × ∞
When is Apple going to realize that rent-seeking anywhere and everywhere is not only a bad look, but will get them regulated straight to hell?
(And at this point, it’s more than deserved. Bring it on.)
When you start seeking rent on the livelihood of artists, I don’t think you get to claim you work at the intersection of Technology and Liberal Arts anymore.
According to Apple’s logic they should be able to tax every single digital transaction that happens on or through any of their devices.
Except in 2024, the entire world runs on computers!
Apple wants to demand a global tax on all transactions ever made by anyone.
If Apple isn’t stopped, there will come a point where Apple slaps a 30% tax on all VISA transactions made on iOS (unless you use Apple Pay, of course!)
So utterly stupid that they ever entered App Store. It’s completely unrelated to their purpose and was bound to screw over them, creators, and patrons.
I’ll obviously be adding warnings to my Patreon profile and tiers that if you use the iOS app to subscribe, you’ll be taxed by Apple for 30%, and advise people to use the web or the Android app instead to sub.
I’m guessing Patreon won’t be allowed to tell its users [in the app] why they’re being gouged on iOS, because Apple doesn’t allow anything like that that could embarrass Apple.
“We’ve never raised prices” my ass. Swooping into other peoples’ markets and taxing them on revenue that has nothing to do with you is objectively worse than raising prices
Officially: “In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee.”
Actually: Changed the rules and changed how old rules were interpreted so that more payments were subject to the fee, pushed apps down in search results if they don’t buy ads.
Someone at Apple must have an Apple Intelligence powered list, titled “disgusting things that we can do to our developers that raise our shareholder value” and they keep picking one item every week to keep the flow going.
Previously:
- Apple Pressures ByteDance and Tencent Over IAP
- DMA Compliance: Initial Acquisition and Store Services Fees
- AltStore PAL
- IAP Required for Insight Timer Tips
- Damus Zaps vs. the App Store
- IAP Fees for Event Services
- Super Follows and IAP
- Fanhouse vs. Apple
- Apple Will Temporarily Stop Taking a 30 Percent Cut on Facebook Event Fees
- Facebook Rejected for Mentioning App Store Fee
- WordPress Bug Fixes Blocked Over IAP
- Tim Cook’s App Store Testimony
- Supporting This Site
- Apple Wants 30% of Tips From Chinese Chat Apps
Update (2024-08-13): John Gruber (Mastodon):
This might epitomize the way Apple can be penny-wise but pound-foolish when it comes to the App Store. However much money they think they might get from these Patreon subscriptions once the Patreon iOS app switches to IAP, I refuse to believe it’s worth the further degradation of Apple’s brand that this dispute with Patreon is incurring. The paying users of Patreon are fans. They are such dedicated and devoted fans of certain creators and artists that they choose to pay those creators money. And now these users are being informed that Apple is putting the squeeze on these creators and inserting themselves into a relationship that these fans see as being between them and the artists they support.
[…]
How do you put a price on the number of Patreon iOS users — who are all, by definition, Apple customers — whose view of Apple will shift from “Apple is a company that supports small indie creators and artists” to “Apple is a company that uses its position of power to extract exorbitant rent from small indie creators and artists” because of this change?
The dynamics of the Patreon thing are actually incredible. Apple, taking 30%, will be making effectively 6x as much as Patreon will on every transaction for creators who are on the grandfather plan. Whatever value Apple brings, does anybody think it’s six times the developer it’s stealing from?
Mere months after needing to apologize for an iPad ad in which they crush a massively valuable stack of instruments, cameras, typewriters, televisions and more with a hydraulic press, Apple is back again to callously insult the world’s creatives and startups in a brand new way. It seems like a glaringly obvious self-own.
[…]
The thing that frustrates me most is that this style of business is working for them, and for Google as well. If I wanted to put my money where my mouth is and bail from Apple’s iPhone or the entire ecosystem, turning to Android is no better for a whole slew of reasons which sometimes even overlap. We shouldn’t have to sit here and wait for governmental bodies to wake up and enforce their own laws, but what other option do we have?
Via Federico Viticci:
Is there any company more out of touch with creatives right now than Apple?
It feels incredibly weird to say this, but it sadly is true.
Patreon has created a tool for creators to pass Apple’s 30% fee on to their members who sign up using the iOS app, which it recommends doing. However, that’s bound to create some ill will with members, and it doesn’t solve the fact that certain kinds of billing like ‘per creation’ charges aren’t available as part of Apple’s payment system, meaning that many creators will need to change their financial arrangements with their members.
[…]
Patreon and creators built businesses that don’t fit neatly into Apple’s payment system, so it doesn’t strike me as fair that now, they have to find a way to fit that square peg into a round hole.
I wish this were an isolated thing, but it isn’t. Apple’s caring-for-creators engine seems to have run out of gas.
I didn’t realize that Patreon is dropping first-of-the-month billing completely and forcing a switch to “subscription” which is a per-membership charge from the first-day-subscribed.
As a patron, I hate this. A big benefit for me is getting one charge for all my memberships, which I also assume(d) saves on credit card fees.
That Patreon’s reaction to this was not: “Welp, I guess we’ll just have a web site instead of a weird iOS app, then” tells you everything you need to know about how they prioritize what is good for their members, versus “growth hacking” and “line go up”.
This is the big question. It certainly would have been easier, and it would arguably be better for both creators and supporters to eliminate Apple’s tax. On the other hand, contorting Patreon to fit Apple’s payment model arguably makes the product itself worse. They probably felt a duty to continue supporting all the people who were already using the app. And they may believe that Apple’s market power is such that not being in the App Store would reduce revenue for creators and potentially be a long-term threat to the entire platform.
I’m disappointed Patreon didn’t just respond by removing their app from the store tbh
The Patreon iOS app has millions of installs. Mass migration of users from the app to the web would be a logistical nightmare under the best of circumstances. And it’s unlikely that Apple would be helpful. Indeed, Apple could refuse to allow Patreon to notify users in-app, which would make migration infeasible.
Discontinuing the app could be much more harmful to creators than keeping it. That’s the power of the ubiquitous platforms.
There’s really only room for one middleman in a relationship between a creator and their audience, and in this case that middleman has been Patreon. But now Apple is saying they’re required to be involved too.
[…]
The whole notion of a platform like Patreon just doesn’t fit with the App Store’s model of taking a fee out of every single transaction for digital goods or services. It could, perhaps, if Apple were willing to only accept a commission from Patreon’s own share — a commission on a commission — but they’re not.
Lastly, I suppose it’s implicit here that a lot Patreon users go through the iOS app. But I can’t help but think they should do what Substack does and just not allow paid subscriptions through the app.
Nick Heer thinks that the guidelines, as written, prohibit both Substack and Patreon from doing this.
Some multimillionaire VP at Apple has decided that the best thing for the company, one of the biggest in the world, to do is introduce a new 30% tax on struggling artists and creators who have no business or professional relationship with it in the first place.
Business lingo is such a great way of drowning offensive policies in euphemism. For example, “monetise our I.P.” is dull grey sludge, but it means “take 15–30% of every transaction because we can”.
Apple demanding rent from Patreon subscriptions is particularly offensive. The people who Apple will be stealing money from, online creators, don’t have any relationship with Apple here. They didn’t ask to be here.
Apple is increasingly leaving a horrible, disgusting, vile taste in my mouth with all their cheap money grabs. It’s practically predatory.
Apple was an American Success Story, the underdog… now they’re just the bully.
From how they treat developers to how forcefully they push their services (no means no, Apple)… this isn’t the company I used to respect back in the day.
There are folks who still, to this day, won’t touch Microsoft products because of Microsoft’s behavior in the 90s — nearly 30 years later. People have long memories. Apple today makes 90s Microsoft look like a saint.
90s MSFT was pretty bad. Apple is worse, but maybe only 30% worse.
Whomever keeps doubling down on the rent-taking on the App Store really need to be smacked upside their fool heads.
It’s hard to believe that on the engineering side, Apple is asking, “How can we be more like Windows Vista?” and on the policy side, they’re asking, “How can we be more like the mafia?”
From this week’s Apple news it seems like they’ve decided to build a toll booth at the intersection of technology and liberal arts.
Perhaps symbolic of the new Apple, “Apple News” is now auto-capitalized, because of course any news about Apple has to use their trademarked term.
I hate to do a “this would have never happened under Steve Jobs”, but there’s something very odd going on with Apple right now. It’s like money has become everything – the only thing that matters. And given that services are the only long-term growth sector, it’s doubling down on everything. But the amount of brand damage it’s doing right now is immense.
In some areas, Apple long ago shifted from “be good” to “be least bad” (eg skeevy ad upsells). But with its App Store shenanigans, it’s so far away from either of those right now.
The Apple that “we thought we knew” might just have been a product of low interest rates and hockey-stick growth in smartphone sales during the 2010s. 10+ years is long enough to feel permanent, so now folks are thinking, “what happened?” The answer might be nothing changed internally, same priorities, but the external environment changed and now they face significant headwinds across every product. Didn’t need to tighten the screws before.
Today, Apple spent big from its brand account. While there are some who are upset with Patreon for having an iOS app in the first place, the overwhelming frustration is justifiably directed toward Apple.
As upsetting as it is, I cannot say I am surprised by any beat in this story. First, Apple decided to, for years, treat Patreon pledges as something other than In-App Purchases against which it would normally levy a commission. But that could not last forever because Apple would — as it has several times before — want to reclassify pledges to get what it feels is its cut. It is now going to require Patreon treat them as subscriptions, similar to Substack.
Hamish McKenzie, Substack’s co-founder, is more positive toward Apple’s In-App Purchase system, but notes how it does not really fit with authorship by individuals or small teams[…]
The thing about putting accountants in charge is that most of them either have no taste or don’t know how “goodwill” fits in a spreadsheet.
I don’t remember who said this - Steve Jobs or Phil Schiller or some other Apple exec - but they spoke in an interview about how you could never put a price tag on the Apple logo - the brand. There’s no dollar amount you could buy it for.
But with every penny of IAP revenue Apple fights for and demands they’re owed - deserved or not - they are selling their brand. Biting off and chewing up pieces of the Apple logo.
The richest company in the world (congrats guys, you’re back on top) being fucking rent-seeking pieces of shit isn’t going to earn your precious services more $$$, it’s just going to convince a whole new generation of users to avoid the App Store for all payments and have a distaste towards your brand.
A lot of people angry at Apple this morning. I don’t blame them.
The original reason for taking a cut of IAP was simple. If they didn’t, every app would be free and require IAP to get the full version. If they didn’t take a cut of subscriptions, every app would be free and require subscription to use. You’d be paying a subscription for several app networks to use their apps now.
[…]
I am not offended that Apple wants to be paid, as some people are. I am offended that they seem to be overstepping what a reasonable take is. They should have been working towards lowering store fees as they scaled up.
When, in the coverage of the Patreon issue, people come to you with the argument that Apple deserves to be paid for the hosting and payment processing they provide, remember:
Nobody forced Apple to host everybody’s downloads, process everybody’s payments and not allow any other installations.
None of this would be a problem if Apple permitted “side-loading” (or more correctly, “installing software on my device, which I already dropped a cool thousand on”).
They don’t even host the Patreon content.
Do you think that taking a cut from Patreon is going to make a difference in their profits? I don’t.
However, if this is only the first step of them taking a cut from services like Kickstarter and GoFundMe, then that could make a lot of money. And that would be seriously evil.
Apple is tiptoeing pretty close to the line of “You owe us 30% of all web transactions in Safari, because if it weren’t for us those customers wouldn’t have reached your site.” Not saying Apple is or will actually say that, but their logic is pretty close to claiming they COULD if they wanted to.
Remember how pissed we all were when Reddit got greedy and killed Apollo? It’s business as usual now for Reddit. They just waited it out. It will be the same for Apple and Patreon.
Users have short memories and few choices.
See also:
Previously:
Update (2024-08-14): John Gruber (Mastodon):
What Patreon seems to be suggesting above is that if they offered a third option — not to allow subscriptions within the iOS app, controlled by each creator for their own subscriptions — that Apple has threatened to remove the Patreon app from the App Store.
[…]
From the perspective of creators, this clearly ought to be an option. They don’t want to charge their fans 30 percent extra just to pad Apple’s bottom line. They don’t want to earn less money themselves. Thus, they might not want to participate in App Store in-app payments at all. How is that not a perfectly reasonable choice for Patreon to offer and for some of its creators to make? And then just put right there in the app that this creator’s subscriptions are only available on the web. Dare Apple to strike that down on the anti-steering grounds that are in the bullseye of regulators around the world.
Why would anyone without Epic money play chicken with the most powerful corporation in the world?
As someone who has an app in the App Store that is funded in large part by Patreon, I have a lot of opinions on what Apple is doing regarding the service.
I also know the giant bear should not be poked or we risk losing important revenue App Store revenue.
Update (2024-08-15): M.G. Siegler:
Patreon should do this. It’s so obvious that they must know they should do this. I suspect it’s simply fear that it would look like they were waging some sort of PR war that ultimately hurts their creators. But again, the creators are getting hurt regardless. Either they have to charge/eat more fees or Patreon does. The latter is bad for creators as well because it makes Patreon less sustainable as a business. So again, they absolutely should call Apple’s bluff here.
To be clear, I don’t think it’s a bluff. I just think Apple is so clueless to these types of optics these days.
Apple’s pristine execution of stage one of enshittification – luring in users, then locking those users in – mean that businesses can’t survive without reaching Apple customers, and they can’t reach Apple customers without abiding by the app store’s rules.
[…]
This is a shocking payment processing fee. For comparison, the highly concentrated credit-card sector charges 2-5% to process a payment – a tenth of Apple’s charge. What’s more, that 2-5% credit card fee is considered to be extremely high (it’s gone up 40% since covid started). Apple backstops this payment rule with more content-based rules: app vendors may not send customers to the web to complete their payments through a regular website with a 2-5% fee. Users have to figure this out for themselves.
[…]
Here we have Apple as the fully unfurled regulator of the digital economy. Apple decides what kinds of businesses are prohibited, based on three criteria[…]
By using this Apple device, you acknowledge that it enables your productivity and workflow in ways that significantly benefit you.
As such, Apple requires that you tithe 10% of your earnings to it, payable on an annual basis, regardless of the activities said earnings were generated from.
This sort of reminds me of the news that Starbucks hired Brian Niccols as their CEO. He’s currently the CEO of Chipotle and has had that role since 2018. During that time, Chipotle modernized a lot, but lost so much of its soul—when the go-to complaints used to be the extra charge for guacamole or the occasional tainted produce, it’s now moved to price hikes, small and inconsistent portion sizes, and putting customers at odds with hourly employees. Sure, the company made lots of money and Niccols was considered successful, but burnt up a lot of goodwill. How many people moved on to alternatives? I know I did.
[…]
While Apple is plenty healthy right now, the amount of grumbling and lack of enthusiasm from its biggest fans have me a bit worried that they’re just going to keep pulling nonsense like this until governments regulate the heck out of them or their customer base erodes. Why not get ahead of both and do right by everyone?
For Apple to pop up on the scene and make Patreon look like the generous soul is kind of a feat to behold.
Hey Patreon creators, what if there was another middle man? Also that middle man didn’t do anything but collect 30%, which is even more than Patreon collects? Patreon will provide you with services in exchange for their fee but the App Store will … uh … process payments that could be processed using the web system that Patreon needs to have anyway. So … uh …
[…]
The fees Apple collects should not be because it can rig a system in very specific ways to benefit them, but because without any artificial barrier it’s simply the best experience. They absolutely can’t say that right now.
Previously:
