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Decreasing service fees on subscriptions to 15%

android-developers.googleblog.com

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Re: Decreasing service fees on subscriptions to 15%

#171

Post by threeseed »

reissbaker wrote: post #131
concinds wrote: post #3

I don't see the point. Spotify's not willing to give up 10% of their Android revenue, they'll still use their own payment. Epic won't give up 15%. South Korea mandated that apps be allowed to have custom payment methods within apps. Why would any big company, whether Netflix, Epic or Spotify, still give Android 10%? It just seems that the "app store pay toll" is getting less and less justifiable; and it seems outrage…

Given that so much of Apple's profits are from extortionate App Store fees... I can't help but think this is a classic "commodify your complement" strategy from Google. The lion's share of Google's revenue comes from search: if cutting subscription fees on the Play Store forces Apple to cut their take on the App Store by half, then Apple loses considerably more than Google — and Apple's loss is Google's gain. And if…

> Given that so much of Apple's profits are from extortionate App Store fees

Apple earns ~20% of their revenue from all their services not just App Store [1]

Given they don't break out their App Store profit numbers I think you should provide your source.

[1] https://www.statista.com/statistics/382260/segments-share-re...

Re: Decreasing service fees on subscriptions to 15%

#172

Post by threeseed »

paxys wrote: post #141
reissbaker wrote: post #131

Earlier quoted context omitted.

Given that so much of Apple's profits are from extortionate App Store fees... I can't help but think this is a classic "commodify your complement" strategy from Google. The lion's share of Google's revenue comes from search: if cutting subscription fees on the Play Store forces Apple to cut their take on the App Store by half, then Apple loses considerably more than Google — and Apple's loss is Google's gain. And if…

> if cutting subscription fees on the Play Store forces Apple to cut their take on the App Store by half Will it though? Or will the fee just become another "premium" differentiator between the two? The average Android phone sells for $250, but that hasn't discouraged Apple from pricing iPhones at 3-5x that. Other than strong government regulation (or the threat of it), I don't see Apple ever willingly reducing the A…

Apple reduced their "App Store tax" in 2020 from 30% to 15% for small businesses i.e. the majority of app developers.

https://www.apple.com/au/newsroom/2020/11/apple-announces-ap...

Re: Decreasing service fees on subscriptions to 15%

#173

Post by threeseed »

RNCTX wrote: post #148
paxys wrote: post #130

Earlier quoted context omitted.

You are only talking about Spotify, Epic, Netflix and the like, but this makes a huge difference for services that are a tier below that. For any smaller company having trouble with growth/user conversion, a 30% cut to Google for the lifetime of the account is still way too steep, but at 15% you start to consider it.

15% is highway robbery. The cost via your own account on Stripe is 5% on the high end.

> The cost via your own account on Stripe

But it's not the cost for operating the payments gateway. It's the cost for the channel.

The real world equivalent is supermarkets, retailers etc charging for products to be stocked on their shelves. Customer acquisition is extremely expensive and difficult and stores expect to be compensated for it.

Re: Decreasing service fees on subscriptions to 15%

#174

Post by rahimnathwani »

heavyset_go wrote: post #169
rahimnathwani wrote: post #158

Earlier quoted context omitted.

This would carry more weight if Stripe were to maintain a mobile operating system, and an app store to help developers get customers.

App developers already pay Apple $100 a year and, as someone in these comments calculated, that earns Apple $2 billion a year alone. Developers regularly need to buy Apple computers, tablets and phones that have 64% profit margins. Users are also buying those computers, tablets and phones that have 64% profit margins. > and an app store to help developers get customers. Apple strictly enforces limits and restrictions…

We’re discussing Google’s 15% cut of subscriptions purchased through the Google Play store.

Google doesn’t require anyone to pay Apple $100/year, nor does Google require anyone to buy Apple hardware.

So none of the costs you mention are relevant to the article we’re discussing.

And Google doesn’t run ‘an exclusive mobile app repository’. A dozen or more of the apps on my mobile are installed from F-droid, and Google does nothing to prevent those apps from working.

Re: Decreasing service fees on subscriptions to 15%

#175

Post by reissbaker »

threeseed wrote: post #171
reissbaker wrote: post #131

Earlier quoted context omitted.

Given that so much of Apple's profits are from extortionate App Store fees... I can't help but think this is a classic "commodify your complement" strategy from Google. The lion's share of Google's revenue comes from search: if cutting subscription fees on the Play Store forces Apple to cut their take on the App Store by half, then Apple loses considerably more than Google — and Apple's loss is Google's gain. And if…

> Given that so much of Apple's profits are from extortionate App Store fees Apple earns ~20% of their revenue from all their services not just App Store [1] Given they don't break out their App Store profit numbers I think you should provide your source. [1] https://www.statista.com/statistics/382260/segments-share-re...

I am responding to a poster claiming 37% of Apple's profits are from the App Store. I'm not sure what their source is; it seems at least somewhat believable to me, since the profit margins for Apple on App Store revenue are extremely high (analysts estimate 78% [1]), so even if App Store revenue is a smaller percentage of total revenue, the other revenue costs more, and those costs cut down their percentage contribution to total profits. Regardless, it's fairly widely reported that the App Store is much more lucrative for Apple than the Play Store is for Google.

1: https://www.marketwatch.com/story/how-profitable-is-apples-a...

Re: Decreasing service fees on subscriptions to 15%

#176

Post by Andrew_nenakhov »

weyland108 wrote: post #147
Andrew_nenakhov wrote: post #30

Earlier quoted context omitted.

Are you also feel safer that Apple decides what apps you are allowed to run? For example, in China, iOS users aren't allowed to run Signal or Protonmail apps. Did it occur to you that if a user is not the final authority who decides which apps should run on the device, he is not really owning the device, but merely leasing it, under some strict terms?

It’s not really a concern tbh. Appstore hasn’t been draconian in that sense. It’s a fair argument that they can do that if they wish but there is no incentive to become that. Quite the opposite actually.

It is not a concern for you, but only because you lack imagination and foresight.

Re: Decreasing service fees on subscriptions to 15%

#177

Post by thedevilslawyer »

philistine wrote: post #139
paxys wrote: post #91

Earlier quoted context omitted.

"Acceptable" is a stretch. There is no way of discovery, say via the App Store. There is no "Add to Home Screen" button (apps can only tell users to open safari settings and do it themselves). There are no push notifications or background sync/fetch. No way to play background media. Full screen doesn't work for anything outside of video. Only a small part of the web manifest file is recognized. The cache limit is a t…

You want a PWA app to do all that, you have to wrap it inside an app and put it on the App Store.

Indeed, that is the exact specific complaint.

Re: Decreasing service fees on subscriptions to 15%

#178

Post by concinds »

threeseed wrote: post #171
reissbaker wrote: post #131

Earlier quoted context omitted.

Given that so much of Apple's profits are from extortionate App Store fees... I can't help but think this is a classic "commodify your complement" strategy from Google. The lion's share of Google's revenue comes from search: if cutting subscription fees on the Play Store forces Apple to cut their take on the App Store by half, then Apple loses considerably more than Google — and Apple's loss is Google's gain. And if…

> Given that so much of Apple's profits are from extortionate App Store fees Apple earns ~20% of their revenue from all their services not just App Store [1] Given they don't break out their App Store profit numbers I think you should provide your source. [1] https://www.statista.com/statistics/382260/segments-share-re...

I'm the OP and I just compared what Apple gets from the App Store (around $21.7m estimated in 2020 which I saw in Barron's, but it's probably an overestimation since I don't think it takes into account the 15% rate below $1m) to Apple's 2020 profits ($57.4m). It's really a back-of-napkin thing, just meant to show the similarity in scale, and how damaging it would be to companies if this revenue went away.

Re: Decreasing service fees on subscriptions to 15%

#179

Post by habosa »

ineedasername wrote: post #132

Maybe I'm a pessimist, but it feels like all of this "fine, we'll cut our commission fees" is all just leading up to another shoe about to drop... "But now you have to pay $x/month to have your app hosted on the app store"

That seems like a good trend to me. The app stores do incur serious hosting and review costs. Let’s pay for those.

I’d much rather pay Apple/Google a fixed amount per download and per app update than pay them a lifetime cut of my subscriptions.

Re: Decreasing service fees on subscriptions to 15%

#180

Post by tomnipotent »

threeseed wrote: post #173
RNCTX wrote: post #148

Earlier quoted context omitted.

15% is highway robbery. The cost via your own account on Stripe is 5% on the high end.

> The cost via your own account on Stripe But it's not the cost for operating the payments gateway. It's the cost for the channel. The real world equivalent is supermarkets, retailers etc charging for products to be stocked on their shelves. Customer acquisition is extremely expensive and difficult and stores expect to be compensated for it.

> It's the cost for the channel.

Except it's not. People don't download Uber or Netflix because of the app stores. Epic demonstrated unequivocally they could get installs without Google involved as an intermediary. The app store value at this point is singularly it their platform-specific monopolies, and the fact that you have no choice but to play ball to do business on mobile.

> The real world equivalent is supermarkets

It's nothing like that. I have multiple supermarket chains I can go to - I have only Apple and Google when dealing with mobile. Customers can choose either Apple or Google, but most businesses are stuck doing business with both. Not even Microsoft screwed over both sides like this.

At this point, Google and Apple have done far more harm to both customers and businesses than Microsoft ever had. It's beyond frustrating.

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