6 ms·

The operating cost is the maximum Apple can come up with when their accountants attribute everything they possibly can to digital sales for the sake of legal ar

by nabla9 8mo ago

The operating cost is the maximum Apple can come up with when their accountants attribute everything they possibly can to digital sales for the sake of legal argument. R&D shouldn't really be included, and Apple uses those same tools and APIs themselves. I think the actual profit margin is closer to 90%, and Apple could maintain a 20% margin with just a 3–4% fee.

rob74 8mo ago
I'd say that in the case of Patreon, any fee for Apple is unjustified. Apple can justify their fee on app purchases/subscriptions in the app store, but Patreon is not an app subscription, the money goes mostly from the patrons to the people they support. Ok, Patreon takes a cut to cover their operating costs, and also make a profit (not sure how profitable they are currently), but I really can't see how Apple, who don't have anything to do with this process except for listing the Patreon app on the app store, can justify taking a cut.
- saimiam 8mo ago
  If a user almost exclusively uses the Patreon ios app to consume the artist’s content and likes to live inside the ios ecosystem for frictionless payments using the card on file/privacy/UX/whatever, then I feel apple should get to set the terms of engagement. If you were a chain store in a high end mall where customers cars were all parked for free by valets, mall staff knew their names, and generally made them feel special, you’d not balk at a higher commission to be paid to mall for access to their customers, right? Airports come to mind for this. I believe apple lets you set whatever price you want on their store, just not tell customers that they could get a lower price elsewhere/on the vendor’s website (I don’t follow App Store policies very closely so my info is probably out of date).
  - rubyfan 8mo ago
    I don’t think anyone suggests Apple should get nothing for their app store services, just that it shouldn’t be 30% of every transaction processed through every iOS app.
    - idiotsecant 8mo ago
      I think that is in fact exactly what GP is suggesting.
      - rubyfan 8mo ago
        I don’t read it that way. I think the point is it doesn’t make sense that apple is taking a cut of a transaction that is not in their payment rails*. Apple can still be compensated for their App store service without using a model that takes 30% of all transactions, e.g. a listing fee, an app review fee, etc. *And anything on their payment rails should have a normal transaction fee, e.g. Stripe’s retail rate is 2.9% + $0.30.
        dwaite 8mo ago
        This is the model they have moved to in the EU - an annual per user-app core technology fee for apps enabled to be listed outside the store, and relaxed in-store rules (and reduced commissions) if you choose to still list in Apple's App Store. Effectively, they are acting as if commissions are paying the core technology fee, and subsidizing it for apps which aren't profitable. The per-user model means that apps which have adopted freemium and advertising-driven models wind up having quite different financials, and could be more expensive.
    - londons_explore 8mo ago
      The EU has the right approach. Don't try to legislate exactly what is a fair/unfair amount of profit to make - change the rules of the game by requiring third party marketplaces and payment platforms so apple has to lower rates or lose every app into a third party store. Apple can easily say "Use our store exclusively and you get our security/privacy guarantees. Go outside our store and you're in the wild west". App developers can then decide how much fee they are willing to pay for access to the user base who refuse to venture into the wild west. Other stores might try to persuade users that they are more secure and more private too via stricter review policies or more locked down permissions etc.
      - 8mo ago
  - hshdhdhj4444 8mo ago
    > If a user almost exclusively uses the Patreon ios app to consume the artist’s content and likes to live inside the ios ecosystem for frictionless payments using the card on file/privacy/UX/whatever, then I feel apple should get to set the terms of engagement. When I paid over $1000 to buy an iPhone I thought I was buying a technological product that I could use to improve my life. I didn’t realize I was buying a ticket to Disneyland where the seller of the product decided how I interacted with everything the device enabled. I don’t think this should be disallowed. I certainly think it’s incredibly false marketing for Apple to claim I bought an iphone, when in reality I paid upfront for essentially AOL.
    - gyulai 8mo ago
      > I certainly think it’s incredibly false marketing for Apple to claim I bought an iphone, when in reality I paid upfront for essentially AOL. I wonder if that has ever been tried against Apple or a similar company in a court of law, because I think there might be real merit there. One would have to get a bunch of people together claiming a refund on the purchase price on the grounds that ownership hasn't been transferred and therefore Apple is in breach of contract in relation to the contract for sale of an iPhone. Then those people would have to bring a class action, and the case would revolve around the concept of "ownership". Because "ownership", to a first approximation, means the legal right to do with some piece of property essentially as you please, and Apple is clearly basing much of their business on the assumption that users do not have those rights and is taking positive action to prevent users from exercising such rights. I don't know much about the law in the rest of the world, except Germany, but in Germany that would certainly be the case, and there is a surprising amount of case law revolving around such things as horses or other animals being sold, and the former owner then trying to restrict the new owner in exercising their ownership rights, which generally end with ownership rights being upheld by courts.
      - Teever 8mo ago
        I’ve been thinking for a while now that a really effective way to deal with problem companies would be coordinate a mass action on small claims closets around the world all on the same day. Often in small claims court you win by default if the other person doesn’t show up and I’m sure judges know average will sympathize with the kinds of arguments that you raised above.
  - TheDong 8mo ago
    Presumably you also would agree that it's fair if Chrome, Windows, and Lenovo all charged me 30% each for using Patreon via Chrome+Windows on a thinkpad, right? They're doing about as much to facilitate my use of Patreon as Apple is. This isn't like a mall at all. This is like a web browser, where apps are webpages, and Apple is insisting that the contents of that webpage are something they can dictate all payment terms on. For the airport analogy to work, it would have to be that you go to the Airport, go into the electronics store, buy a Kindle, and then the Airport insists it can take 30% not just on the purchase of the kindle, but 30% on every single book you buy on the kindle forever. Apple taking a cut on the purchase price of an app that a user found via the app store does make some sense. Apple taking a cut of an in-app interaction with a creator that the user almost certainly found elsewhere is nonsense. What next, should apple take a 30% cut of my rent because I found my apartment on the Craigslist app? Should they take a 30% of my train ticket that I purchased using the Safari app? Why does Patreon have to add a 30% cut on in-app content, when Safari lets me pay for in-app content with my credit card without taking any cut?
    - saimiam 8mo ago
      > certainly found elsewhere I agree that if someone discovered the artist elsewhere, Apple has weaker standing in claiming a huge commission. But if they found an artist elsewhere, they would also know that they can support that artist elsewhere and not through the iOS app. If the patron found them through the patreon iOS app and use the app to consume the artist's content, then clearly the patron has indicated that they prefer the iOS experience.
      - TheDong 8mo ago
        And if I access Patreon via Chrome on Windows, and use Chrome on Windows to consume the artist's content, clearly I prefer the Chrome and Windows experience, so Microsoft and Google should be getting their 30% cut, right? ... and of course the user found the artist elsewhere than the iOS app store. They found them on youtube, or reddit, or _possibly_ on the webview inside the patreon iOS app, which is also _not_ apple's App Store content, it's content provided by Patreon. Again, should accessing my bank via the Safari or Chrome iOS app mean apple gets 30% of all my bank transactions, just because they were displayed on a webview inside an iOS app?
  - wolvoleo 8mo ago
    Yes it's fine but the 30% should be charged to the customer who wants to stay within that ecosystem of course. If they want that white glove treatment they can pay for it. Of course once the users see how much that fluffy ecosystem actually costs them I bet most of them will just pay patreon directly :) If the platform like patreon is supposed to absorb that fee they will increase prices for everyone even people who won't touch Apple like me. That's not fair. Or more likely, they will just give less to the content creators. In the EU it's already forbidden to force payments through Apple or to forbid the platforms to charge the fee back to the customer.
  - pc86 8mo ago
    I subscribe to a half dozen creators and I have exclusively used the web interface to subscribe and consume this content. You cannot tell me with a straight face that if the only difference was I subscribed on my phone to someone who charges me $10/mo, Apple is entitled to $36 for the first year and $18/yr in perpetuity thereafter.
  - mrighele 8mo ago
    Should Ford get a 30% cut every time you fill your gas tank ?
    - mrguyorama 8mo ago
      Don't worry, we are well into "car branded fuel only" territory with electric vehicles. "Buy our electricity at a huge markup to power your vehicle. Oh, you don't have one of our vehicles? Sorry, that's an extra 10% on top" This was dystopic scifi like 20 years ago and Americans are so clueless they just sleepwalked into it because they'd rather not have a government at all.
- silvestrov 8mo ago
  You could make the argument that Patreon isn't much more than a banking app. It just focuses on the receiver of the money than the sender. I think Apple is slowly killing apps with this policy. Everybody will slowly move to "web only" as 30% would kill their ability to compete with anybody else. This will likely be much stronger in countries where iPhones do not have the same market share as in the US.
  - wlesieutre 8mo ago
    Honestly I wouldn't be that shocked if Apple tried demanding a 30% royalty on bank deposits and bills paid using iPhone apps. They've decided the future of their company depends on being huge assholes about it.
    - mcintyre1994 8mo ago
      I would be surprised by that because iPhone users would notice that. I think the App Store model relies on their fee being invisible to consumers, and the increased price you’re paying not being linked to them. AFAIK apps aren’t allowed to explain that they charge more if you subscribe on iPhone to users either, or why they do so.
      - dr-detroit 8mo ago
        [dead]
      - wlesieutre 8mo ago
        True, hard for bank deposits where the user sees both ends of the transaction. For bill payments though, they'd just insist on taking 30% of your electric bill payment and if the electric company's margins aren't high enough to absorb that then "Haha that sounds like a you problem" - Tim Cook, probably
      - odo1242 8mo ago
        Apps are allowed to link to web services to offer payment as an alternative to IAPs and offer a discount for doing so, thanks to Apple v Epic.
- MadameMinty 8mo ago
  Next up, 2% cut whenever you use any banking or payment app. Only 1.5% when you use Apple Pay!
  - odo1242 8mo ago
    They currently do charge 0.15% on Apple Pay actually.
- yibg 8mo ago
  No kidding. Imagine if Apple took 30% of your Venmo transfers.
- akerl_ 8mo ago
  Why are you ok with Patreon taking a cut but not Apple?
seemaze 8mo ago
Certainly not defending Apple's behavior in this instance, but isn't the success of the larger product ecosystem a direct driver of their App Store profitability? To strictly evaluate the App Store finances in isolation seems to be the sort of accusation you've levied against Apple in the opposite direction.. I like Apple less and less these days for various reasons, but I haven't purchased an app on the App Store in more than a decade. It's strictly a vehicle for local utilities when, for whatever reason, a browser will not suffice. Nearly all purchasing is done on the 'open' web.
parineum 8mo ago
> ...for the sake of legal argument. R&D shouldn't really be included That's an incredibly ridiculous take. R&D is an operating cost and it's an ongoing expense related to the app store existing. > I think the actual profit margin is closer to ... You can replace "think" there with "feel".
jbs789 8mo ago
Or you could argue the App Store wouldn’t exist without the hardware, so the relevant reporting is both combined - lower margins.

by nabla9 8mo ago

rob74 8mo ago

I'd say that in the case of Patreon, any fee for Apple is unjustified. Apple can justify their fee on app purchases/subscriptions in the app store, but Patreon is not an app subscription, the money goes mostly from the patrons to the people they support. Ok, Patreon takes a cut to cover their operating costs, and also make a profit (not sure how profitable they are currently), but I really can't see how Apple, who don't have anything to do with this process except for listing the Patreon app on the app store, can justify taking a cut.

saimiam 8mo ago
If a user almost exclusively uses the Patreon ios app to consume the artist’s content and likes to live inside the ios ecosystem for frictionless payments using the card on file/privacy/UX/whatever, then I feel apple should get to set the terms of engagement. If you were a chain store in a high end mall where customers cars were all parked for free by valets, mall staff knew their names, and generally made them feel special, you’d not balk at a higher commission to be paid to mall for access to their customers, right? Airports come to mind for this. I believe apple lets you set whatever price you want on their store, just not tell customers that they could get a lower price elsewhere/on the vendor’s website (I don’t follow App Store policies very closely so my info is probably out of date).
- rubyfan 8mo ago
  I don’t think anyone suggests Apple should get nothing for their app store services, just that it shouldn’t be 30% of every transaction processed through every iOS app.
  - idiotsecant 8mo ago
    I think that is in fact exactly what GP is suggesting.
    - rubyfan 8mo ago
      I don’t read it that way. I think the point is it doesn’t make sense that apple is taking a cut of a transaction that is not in their payment rails*. Apple can still be compensated for their App store service without using a model that takes 30% of all transactions, e.g. a listing fee, an app review fee, etc. *And anything on their payment rails should have a normal transaction fee, e.g. Stripe’s retail rate is 2.9% + $0.30.
      - dwaite 8mo ago
        This is the model they have moved to in the EU - an annual per user-app core technology fee for apps enabled to be listed outside the store, and relaxed in-store rules (and reduced commissions) if you choose to still list in Apple's App Store. Effectively, they are acting as if commissions are paying the core technology fee, and subsidizing it for apps which aren't profitable. The per-user model means that apps which have adopted freemium and advertising-driven models wind up having quite different financials, and could be more expensive.
  - londons_explore 8mo ago
    The EU has the right approach. Don't try to legislate exactly what is a fair/unfair amount of profit to make - change the rules of the game by requiring third party marketplaces and payment platforms so apple has to lower rates or lose every app into a third party store. Apple can easily say "Use our store exclusively and you get our security/privacy guarantees. Go outside our store and you're in the wild west". App developers can then decide how much fee they are willing to pay for access to the user base who refuse to venture into the wild west. Other stores might try to persuade users that they are more secure and more private too via stricter review policies or more locked down permissions etc.
    - 8mo ago
- hshdhdhj4444 8mo ago
  > If a user almost exclusively uses the Patreon ios app to consume the artist’s content and likes to live inside the ios ecosystem for frictionless payments using the card on file/privacy/UX/whatever, then I feel apple should get to set the terms of engagement. When I paid over $1000 to buy an iPhone I thought I was buying a technological product that I could use to improve my life. I didn’t realize I was buying a ticket to Disneyland where the seller of the product decided how I interacted with everything the device enabled. I don’t think this should be disallowed. I certainly think it’s incredibly false marketing for Apple to claim I bought an iphone, when in reality I paid upfront for essentially AOL.
  - gyulai 8mo ago
    > I certainly think it’s incredibly false marketing for Apple to claim I bought an iphone, when in reality I paid upfront for essentially AOL. I wonder if that has ever been tried against Apple or a similar company in a court of law, because I think there might be real merit there. One would have to get a bunch of people together claiming a refund on the purchase price on the grounds that ownership hasn't been transferred and therefore Apple is in breach of contract in relation to the contract for sale of an iPhone. Then those people would have to bring a class action, and the case would revolve around the concept of "ownership". Because "ownership", to a first approximation, means the legal right to do with some piece of property essentially as you please, and Apple is clearly basing much of their business on the assumption that users do not have those rights and is taking positive action to prevent users from exercising such rights. I don't know much about the law in the rest of the world, except Germany, but in Germany that would certainly be the case, and there is a surprising amount of case law revolving around such things as horses or other animals being sold, and the former owner then trying to restrict the new owner in exercising their ownership rights, which generally end with ownership rights being upheld by courts.
    - Teever 8mo ago
      I’ve been thinking for a while now that a really effective way to deal with problem companies would be coordinate a mass action on small claims closets around the world all on the same day. Often in small claims court you win by default if the other person doesn’t show up and I’m sure judges know average will sympathize with the kinds of arguments that you raised above.
- TheDong 8mo ago
  Presumably you also would agree that it's fair if Chrome, Windows, and Lenovo all charged me 30% each for using Patreon via Chrome+Windows on a thinkpad, right? They're doing about as much to facilitate my use of Patreon as Apple is. This isn't like a mall at all. This is like a web browser, where apps are webpages, and Apple is insisting that the contents of that webpage are something they can dictate all payment terms on. For the airport analogy to work, it would have to be that you go to the Airport, go into the electronics store, buy a Kindle, and then the Airport insists it can take 30% not just on the purchase of the kindle, but 30% on every single book you buy on the kindle forever. Apple taking a cut on the purchase price of an app that a user found via the app store does make some sense. Apple taking a cut of an in-app interaction with a creator that the user almost certainly found elsewhere is nonsense. What next, should apple take a 30% cut of my rent because I found my apartment on the Craigslist app? Should they take a 30% of my train ticket that I purchased using the Safari app? Why does Patreon have to add a 30% cut on in-app content, when Safari lets me pay for in-app content with my credit card without taking any cut?
  - saimiam 8mo ago
    > certainly found elsewhere I agree that if someone discovered the artist elsewhere, Apple has weaker standing in claiming a huge commission. But if they found an artist elsewhere, they would also know that they can support that artist elsewhere and not through the iOS app. If the patron found them through the patreon iOS app and use the app to consume the artist's content, then clearly the patron has indicated that they prefer the iOS experience.
    - TheDong 8mo ago
      And if I access Patreon via Chrome on Windows, and use Chrome on Windows to consume the artist's content, clearly I prefer the Chrome and Windows experience, so Microsoft and Google should be getting their 30% cut, right? ... and of course the user found the artist elsewhere than the iOS app store. They found them on youtube, or reddit, or _possibly_ on the webview inside the patreon iOS app, which is also _not_ apple's App Store content, it's content provided by Patreon. Again, should accessing my bank via the Safari or Chrome iOS app mean apple gets 30% of all my bank transactions, just because they were displayed on a webview inside an iOS app?
- wolvoleo 8mo ago
  Yes it's fine but the 30% should be charged to the customer who wants to stay within that ecosystem of course. If they want that white glove treatment they can pay for it. Of course once the users see how much that fluffy ecosystem actually costs them I bet most of them will just pay patreon directly :) If the platform like patreon is supposed to absorb that fee they will increase prices for everyone even people who won't touch Apple like me. That's not fair. Or more likely, they will just give less to the content creators. In the EU it's already forbidden to force payments through Apple or to forbid the platforms to charge the fee back to the customer.
- pc86 8mo ago
  I subscribe to a half dozen creators and I have exclusively used the web interface to subscribe and consume this content. You cannot tell me with a straight face that if the only difference was I subscribed on my phone to someone who charges me $10/mo, Apple is entitled to $36 for the first year and $18/yr in perpetuity thereafter.
- mrighele 8mo ago
  Should Ford get a 30% cut every time you fill your gas tank ?
  - mrguyorama 8mo ago
    Don't worry, we are well into "car branded fuel only" territory with electric vehicles. "Buy our electricity at a huge markup to power your vehicle. Oh, you don't have one of our vehicles? Sorry, that's an extra 10% on top" This was dystopic scifi like 20 years ago and Americans are so clueless they just sleepwalked into it because they'd rather not have a government at all.
silvestrov 8mo ago
You could make the argument that Patreon isn't much more than a banking app. It just focuses on the receiver of the money than the sender. I think Apple is slowly killing apps with this policy. Everybody will slowly move to "web only" as 30% would kill their ability to compete with anybody else. This will likely be much stronger in countries where iPhones do not have the same market share as in the US.
- wlesieutre 8mo ago
  Honestly I wouldn't be that shocked if Apple tried demanding a 30% royalty on bank deposits and bills paid using iPhone apps. They've decided the future of their company depends on being huge assholes about it.
  - mcintyre1994 8mo ago
    I would be surprised by that because iPhone users would notice that. I think the App Store model relies on their fee being invisible to consumers, and the increased price you’re paying not being linked to them. AFAIK apps aren’t allowed to explain that they charge more if you subscribe on iPhone to users either, or why they do so.
    - dr-detroit 8mo ago
      [dead]
    - wlesieutre 8mo ago
      True, hard for bank deposits where the user sees both ends of the transaction. For bill payments though, they'd just insist on taking 30% of your electric bill payment and if the electric company's margins aren't high enough to absorb that then "Haha that sounds like a you problem" - Tim Cook, probably
    - odo1242 8mo ago
      Apps are allowed to link to web services to offer payment as an alternative to IAPs and offer a discount for doing so, thanks to Apple v Epic.
MadameMinty 8mo ago
Next up, 2% cut whenever you use any banking or payment app. Only 1.5% when you use Apple Pay!
- odo1242 8mo ago
  They currently do charge 0.15% on Apple Pay actually.
yibg 8mo ago
No kidding. Imagine if Apple took 30% of your Venmo transfers.
akerl_ 8mo ago
Why are you ok with Patreon taking a cut but not Apple?

seemaze 8mo ago

Certainly not defending Apple's behavior in this instance, but isn't the success of the larger product ecosystem a direct driver of their App Store profitability? To strictly evaluate the App Store finances in isolation seems to be the sort of accusation you've levied against Apple in the opposite direction.. I like Apple less and less these days for various reasons, but I haven't purchased an app on the App Store in more than a decade. It's strictly a vehicle for local utilities when, for whatever reason, a browser will not suffice. Nearly all purchasing is done on the 'open' web.

parineum 8mo ago

> ...for the sake of legal argument. R&D shouldn't really be included That's an incredibly ridiculous take. R&D is an operating cost and it's an ongoing expense related to the app store existing. > I think the actual profit margin is closer to ... You can replace "think" there with "feel".

jbs789 8mo ago

Or you could argue the App Store wouldn’t exist without the hardware, so the relevant reporting is both combined - lower margins.