[Hammershaft]

Startup founders can choose between many models of funding, VCs, etc. Starups cannot choose between different ways of accessing willing customers over iOS, they have to comply with a %30 cut and a jungle of regulations that act in Apple's interest.

These two examples aren't the same, even just on the basis of market power.

[JustExAWS]

Startups aren’t paying 30% of sales unless they have more then $1 million in revenue coming through the App Store, they are selling access to digital goods and even then, they can still sell access to subscriptions and services outside of the App Store and now they can link directly to their website from the App Store thanks to the courts ruling - at least in the US.

[Nevermark]

Many startups are still losing money at $1M ARR. So getting a bump up to 30% of revenue at $1M can be catastrophic.

Investors don't want large percentages of pre-profit money being siphoned off by Apple.

Generally speaking, an optimized win-win fee would be some percentage of profits, not revenue.

That might be far too difficult to manage, accounting wise. But we can safely say that 30% of revenue, would translate to an extreme percentage of profit. Apple is extorting from many companies.

One sign of anticompetitive behavior is when a company is leveraging things in their favor so hard, it seems quite plausible that they are actually harming themselves. Killing of developers, by charging massive fees even to money losing developers, is not a good long term strategy.

But the power to extract money even from those it causes real pain, is hard to turn down when quarterly numbers keep coming up.

[JustExAWS]

Let’s look at the startups that YC funds. How many of them are selling apps in the App Store with in app purchases?

[johnnyanmac]

>they can link directly to their website from the App Store thanks to the courts ruling - at least in the US.

In Apple. fashion, they are still pushing back on this despite the court ruling. It only shows more so why Apple needs to be made to open up.

[addaon]

> Starups cannot choose between different ways of accessing willing customers over iOS

What? They can offer an SPA, or a traditional web page. They can offer a hardware device. They can make an android app compelling enough to convert users.

[maximus_01]

You are really trying to say that for a startup trying to build software, say a productivity app or whatever, they should consider launching their own hardware device? They are very different things and would basically make indie development impossible (or really any software company that can't raise hundreds of millions to billions)

[sokoloff]

You’re arguing that Apple’s App Store, even with its commission, is a better business proposition.

I agree, and from that conclude that Apple’s earned their commission/fees.

[maximus_01]

There is a limit to this sort of logic though. Don't get me wrong, I'm generally pro free markets. But: A) Apple's policies make some products completely unviable (anything with a gross margin less than 30%). Even for products at say 40% gross margin, Apple as a storefront is taking 75% of the gross margin pool (ie 30% to Apple, 10% to developer). This in my view is direct consumer harm. B) Apple acts egregiously and restricts what should be basic free speech. For instance, app developers not being able to even mention they have to pay Apple (let alone being able to direct customers to their own website etc). To me this is the biggest one - I could probably live with everything else more if developers at least could show customers where their fees were going etc. C) Apple has changed the rules over time, or at least how they enforce the rules (by trying to force more and more apps to pay the 30% - eg what they did to Patreon)

[JustExAWS]

This hasn’t been true in months in the US because of the courts ruling. Right now, just looking at two apps, you can click on “Buy book” from the Kindle app and be redirected to Amazon’s website and download the Netflix app, click on “Get Started” and create an account.

[maximus_01]

Yep. But Apple are appealing that decision.

[kelnos]

Just because people will go along with something because they have no other choice, it doesn't mean it's a fair business practice that we should allow.

Apple's deal is still an acceptable business proposition because there aren't any alternatives. Android users don't spend much on apps compared to iPhone users. It's an ok market, but not a great one, and in the US, if you aren't on the iPhone, then you aren't relevant, period.

Maybe if there was an actual competitive market on iOS for app stores, we'd see what app developers actually thought was a good business proposition, not the only take-it-or-leave-it (but if you leave it there's no way to be successful) proposition they have now.

[sokoloff]

> because they have no other choice

People clearly have other choices here: develop for Android, develop for the web, create a telephony-based or text-response system, operate in bricks-n-mortar format, etc.

[johnnyanmac]

Apple with a 90% commission would still be a better business proposition.Did they earn that or are they at that point a monopoly on half a domain of tech?

[sokoloff]

Is that a better business proposition for a prospective app developer? GP was arguing that the alternatives to the App Store commission were far worse. Under a 90% commission scheme, they're probably both unviable.

[JimDabell]

> would basically make indie development impossible

We aren’t talking about indie development though. People like to paint a picture of a small, scrappy startup or beleaguered solo dev being held back by Apple’s crushing 30%, but that isn’t the case.

Unless you are earning more than a million dollars a year through the App Store alone, you don’t pay 30%, you pay 15%. And if you earn more than that, you still only pay 15% for long-term subscribers. And of course, all those SaaS companies where the app is just an interface for the larger service pay 0%.

As soon as you start talking about “Apple’s 30%”, you reduce the scope of the argument to the tiny fraction of developers with millions in revenue.

If you do actually want to talk about indie development, you should be talking about “Apple’s 15%”.

[MindSpunk]

Let's run the numbers for indie development.

Say you're a team of 3. Your game takes 2 years to develop. You spend on salary for 3x2 years. You've spent ~$600,000 so far. Let's assume you haven't had any other sources of operational costs like software licenses for your art tools (3D modelling, 2D drawing, music production, sound production, game engine), marketing expenditure, development hardware, outside contracting, and a number of other things.

If you pull $800,000 in the first year Apple will take $120,000. Your net profit is $80,000. Apple has taken over half your profit.

If you pull $1,200,000 in the first year Apple will take $210,000. I'm going to assume that Apple still only takes 15% on the first $1million. Your net profit is $390,000. About a third of your profit has gone to Apple now.

The carve-out for small revenues is not some panacea. Fixed cost overheads for small teams will swallow the platitude very fast. Video games is a high risk, hits based industry. Apple's tax adds the most risk to small ventures, the kind of ventures that are going to produce innovative high risk content, making them even more risky adding more difficulty to acquiring finance.

So if we want to talk about Apple's 15% it's actually worse.

[JimDabell]

> You've spent ~$600,000 so far.

> If you pull $800,000 in the first year

This is not what people have in mind when you talk about poor little indie devs being unable to cope with 30%. We’re talking about a well-funded operation that can run for years without revenue.

> So if we want to talk about Apple's 15% it's actually worse.

Paying 15% is not worse than paying 30%.

[Fomite]

I believe we call that a "pivot"

[kelnos]

> They can offer a hardware device.

As someone who worked at a company that tried to do this, years ago, that's hilariously laughable, and either you're just incredibly unaware of what that sort of thing takes, or you're arguing in bad faith.

And if you think SPAs or regular websites on mobile Safari can give you the same experience and hardware access as a native app, I'm not sure what to tell you.

> They can make an android app compelling enough to convert users.

Sure, right, now you're just spouting fantasy stories. (And I say this as an Android user.)