Developers now have the ability to direct users within their apps to make subscription payments outside of the App Store; however, this shift comes with several complications. In the United States, Apple is required to allow developers to link to their websites or third-party payment systems. While this could be viewed as an opportunity to circumvent the so-called “Apple tax,” some industry observers argue that many developers are simply looking for a way to avoid paying fees for services that benefit their business. For instance, Sam Liang, CEO of Otter, expressed frustration over losing 30% of subscription revenue to Apple, labeling the situation as “completely insane.”
Yet, it prompts the question of whether similar fees imposed by other companies—like Microsoft’s in the Xbox Store—are labeled as a “Microsoft tax” or whether retail partners impose a “retail tax.” Interestingly, developments like Cameo, which allows users to buy personalized messages from celebrities, had to work tirelessly on alternative payment options. This raises the question of how their business model would fare if there wasn’t Apple facilitating access to a large user base through the App Store. Furthermore, while Otter’s platform has grown thanks to Apple’s ecosystem, its CEO’s complaints about fees overlook the significant advantages provided by the App Store.
Apple has undeniably shaped today’s app marketplace, making it easier for developers to reach global audiences without bearing the costs associated with traditional retail. The feasibility of moving payments out of Apple’s ecosystem remains in question, with some developers considering discounts as incentives. For example, yoga app Down Dog has successfully transitioned a portion of its subscribers away from Apple while facing challenges typical of external payment options. Developers rely on Apple while simultaneously critiquing its fees, but both parties ultimately need each other to thrive.
Consequently, the future relationship between app developers and Apple will likely evolve as this landscape continues to change.
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