Hacker News Reader

Comment by bostik | Hacker News Reader

30% was highway robbery from the start. Pure and simple.

It was merely a less awful deal than most other indie commission models, with sites like Kongregate and their ilk demanding >80%. Against that kind of flaying and skinning, 30% was an improvement!

I've said it before. A very good agent, who actually works for their client and arranges them with repeat lucrative contracts, gets 15%. App stores, as gatekeepers to their walled gardens, extort twice that.

Btw - if they want to get into recurring payment scene, let them compete with payment processor fee structures. For the privilege of arranging trusted, mostly secured payments and handling the back office accounting, 3% should be a damn good ceiling. The payment industry is making money hand over fist with that kind of cut.

View on HN

>30% was highway robbery from the start.

That was not at all obvious to anyone in 2008. It's a pretty typical margin from the console industry, which was the main point of reference at the time. Apple spent several billion building the App Store infrastructure, the SDK and setting up the review and payments system and it took years for App Store revenue to catch up with the sunk investment and expenses. Also practically everyone in the industry at the time was saying Microsoft and Google would imminently wipe Apple out of the mobile market.

This is a tough one, I think 30% made perfect sense in 2008 but does seem steep now. Apple makes huge profits on the App Store, but it mostly seems to have happened by accident, their original strategy seems to have genuinely been to just break even and maybe make a modest margin, with the store mainly just being a competitive advantage. The huge success and profits have been a windfall.

However that all happened and we are where we are. I don't object to Apple's app store margins or IAP charges, it's their product, their rules.

I do think banning developers from informing users of how to get subscriptions and such outside the store is foolish. That's clear overreach. I see why they do it, otherwise subscription services can cut Apple out and free-ride, but they probably just have to take the hit.

nooo aha don’t take away our profit margins haha it was an accident we promise haha

>However that all happened and we are where we are. I don't object to Apple's app store margins or IAP charges, it's their product, their rules.

You are right. It's a question of incentives. The Apple/Google duopoly is incentivized towards control because it allows for abusive profit extraction. They have less incentive to open their platforms and both continue to invest heavily to avoid doing so, because their product, their rules is extremely profitable.

>I do think banning developers from informing users of how to get subscriptions and such outside the store is foolish.

From the Apple/Google perspective, it is foolish in only one respect: it so outrageous that it invites legislative and regulatory response.

>30% was highway robbery from the start. Pure and simple.

From the Start? Credit where credit's are due, 30% for software was good enough for a lot of independent developers. Even to this day. Handle Processing charges, distribution, Tax etc. For a lot of categories 30% isn't that bad. Especially for Software.

The problem start when they are enforcing 30% on Services and not on Software. Signing up a Teaching Class with Real instructor on iOS? 30% to Apple. Signing up Services like Web Hosting, Video Streaming, or whatever it is, 30% to Apple. Apple had to made exempt to each and every category after people complain. At this point when the whole world is moving to digitisation, 30% no longer becomes a cost of Software but a Tax on all things.

30% was the iTunes deal for apps. On iTunes songs were all 99 cents and Apple got 30 cents.

Songs were $1.29 for a long time as well. $0.99 songs seemed to be mostly for radio edits and similar.

That was later after iTunes plus came out (higher fidelity, no DRM in some countries)

Iirc Apple ate the credit card fees on their cut which meant they earned a few pennies if you only bought one somg at a time.

Nope. It was always the deal.

I have artist sales records predating the iPhone.

Edit: Also worth remembering that iTunes is/was/is the iTunes Music Store (itms) and that Apple sold apps via it for the click wheel iPod under the same percentages.

It’s pretty easy to verify that apple paid the credit card feeds from their cut, brief googling reveals many articles like this one:

https://nypost.com/2004/05/07/apple-tunes-up-price-of-hits-m...

Go buy a couple of singles off iTunes over a couple of days and see how long it takes to hit your card.

Apple has always deferred charging cards to minimize processing fees by bundling multiple purchases together.

I’m aware of that and don’t see how it changes what I wrote at all.

I didn’t downvote you, but I think Apple batching payments together would mean they didn’t “eat costs”. It sounds like batching could result in them turning a profit.

> 30% was highway robbery from the start. Pure and simple.

Except it wasn't. Try getting an app published before the app store. It was 70% if you were lucky enough to find someone to publish it.

You have no idea what you are talking about.

PocketGear was 40%, fwiw

I was there at the start and people were really happy about the App Store terms. The convenience of Stripe etc. didn’t exist and taking payments on mobile was a big, expensive effort lacking consumer trust. All of a sudden Apple comes in and handles hosting, payments, installation, etc. for you in a way people will actually use, without you having to incorporate or set up a merchant account. It was a huge convenience!

The things people complained about were the opaque, buggy, barely documented code signing processes; inconsistent, undocumented, NDAed rules (no published review guidelines and you couldn’t tell people why your application was rejected!); and incredibly slow review times (weeks!).

The idea that Apple introduced the 30% fee and people recoiled with horror is revisionist history. People jumped in with both feet for that because of the convenience Apple was offering around easily getting people to pay money and having it end up in your bank account.

Not to mention retailers take a 30% cut of all video game sales still to this day and no one mentions them at all.

Reply on news.ycombinator.com