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The secret of App Store revenue distribution: Why are developers dissatisfied with the 30% commission?
Since the launch of the App Store on July 10, 2008, this application market developed and maintained by Apple has completely changed the way applications are distributed and sold around the world. Users can easily browse and download Apple-certified apps, which are not limited to iPhone and iPod Touch, but can also be used on iPad, and some apps can even be used on other devices such as Apple Watch and Apple TV. However, despite the convenience and a host of new opportunities it brings, the App Store's commission model has sparked criticism and dissatisfaction among many developers, especially Apple's 30% cut of revenue.
"We are living in the age of the app economy, and developers feel oppressed by Apple's high commissions."
According to recent reports, Apple's App Store currently has over 1.8 million apps, and Apple has paid out over $155 billion to developers since it opened. However, behind these data lies the dissatisfaction of many developers with Apple's commission.
Commission model controversy
In the App Store, developers' revenue is split 70/30, meaning that developers receive 70% of the app sales revenue, while Apple takes 30%. In the eyes of large developers, this ratio is not considered too high, but for many small startups, such commissions make it difficult for them to survive. Especially in a highly competitive market, this 30% commission may directly affect the developer's profit model and business operations.
"Some developers even said that because of such commissions, they have to consider whether to continue operating on the App Store."
In addition, the relationship between Apple and developers has become increasingly strained. Many developers believe that this model gives Apple a de facto monopoly and limits their revenue potential. Many lawsuits and complaints also show that developers are increasingly unable to accept such distribution of benefits and hope that the government can intervene to investigate Apple's business practices.
Government intervention and regulatory challenges
Because of the developers' continued demands, regulators in some countries have recently begun investigating Apple's market behavior. Taking the Netherlands as an example, the Netherlands Authority for Consumers and Markets (ACM) ruled in October 2021 on Apple’s internal payment system, deeming the practice anti-competitive and requiring Apple to make changes. The occurrence of such incidents has put Apple's business model under increasing pressure.
"It is foreseeable that more countries and regions may begin to strictly regulate the operation of the App Store in the future."
Emerging Response Strategies
Faced with such high commission pressure, some developers have begun to adopt new revenue models to reduce their dependence on Apple. Instead of traditional app sales, more and more developers are choosing to use subscription models or even crowdfunding to increase revenue. These models can not only establish a stable revenue stream, but also help improve user stickiness.
For example, Apple launched the Small Business Program in 2020, reducing the commission rate to 15% for developers with annual revenue below $1 million. Although this policy has partially alleviated the pressure on some developers, there are still many voices that believe that this is just a delaying tactic and future changes are the key.
Future market trends
As global calls for compliance and fair competition grow, market dynamics are changing. More and more countries and organizations are asking Apple to adjust its operating strategies in a timely manner to comply with the laws and regulations of various countries. This move will undoubtedly affect the App Store's commission policy and even the profit distribution of developers in the future.
On the other hand, new challenges in the market will continue to emerge, providing developers with more choices and opportunities. Can they find a more suitable business model to achieve stable revenue growth in this era of change?
In such an evolving app market, how will developers position themselves in the future to resist the pressure of high commissions?
