Season 3, Episode 1: Unpacking Apple's App Store payments changes (with David Barnard)
Feb 7, 2024
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David Barnard, Growth Advocate at RevenueCat, discusses Apple's new guidelines for alternative off-platform payments in the US and alternative app stores in the EU. They explore the specifics of the guidelines, the attractiveness of the options, impediments to implementation, and the sentiment of independent developers. They also discuss the implications of Apple's payment changes, differences between off-platform and app store payments, and options for developers in response to the new terms.
The new guidelines in the U.S. and EU offer limited financial viability for most developers due to added costs and restrictions.
Developers need to carefully assess the financial viability and limitations of accepting the new terms, alternative billing, or third-party marketplaces.
The core technology fee is a significant factor impacting the viability of the new business terms, making it a deterrent for many developers considering the new guidelines.
Deep dives
Overview of the U.S. Alternative Payments Guidelines
The new guidelines in the U.S. give developers the option to accept new business terms or stick with the existing ones. If they accept, they can stay in the App Store and use Apple billing or opt for alternative billing. However, the reduction in commission fees is offset by a 3% billing fee. There is also the option to distribute apps through a third-party marketplace, but the guidelines come with their own set of rules. Overall, the new guidelines offer limited financial viability for most developers due to the added costs and restrictions.
Overview of the EU Alternative Payments and App Stores Guidelines
EU developers have four main options under the DMA guidelines. They can accept the new business terms and stay in the App Store with reduced commission fees but have to pay a core technology fee. Alternatively, they can opt for alternative billing within the App Store or distribute their apps through third-party marketplaces. However, these options also come with limitations and the core technology fee can make the new terms less attractive for most apps.
The Core Technology Fee Dilemma
The core technology fee is a significant factor impacting the viability of the new business terms in both the US and EU. The fee requires developers to pay 50 euro cents per install or update annually, making it a challenge for apps with low monetization or large user bases. Cumulative costs and the inability to break down fees by country add complexity to the issue. The core technology fee is seen as a deterrent for many developers considering the new guidelines.
Challenges and Considerations for Developers
The alternative payments and app stores guidelines present challenges and considerations for developers. They need to assess the financial viability of accepting the new terms, weigh the benefits of alternative billing or third-party marketplaces, and navigate the intricacies of the core technology fee. Each option has its own limitations and impacts, making it essential for developers to carefully evaluate their specific circumstances and make informed decisions.
Different perspectives on Apple's platform fee
The podcast discusses the varying perspectives on Apple's platform fee. Some argue that Apple should not collect any money and that the app store should be as open as the web. Others feel that Apple deserves to charge a fee for the use of their APIs and platform. However, there is a debate about how the fee should be collected. The podcast suggests that Apple's decision to implement a commission structure for the platform fee is a clever move, benefiting certain apps that go viral but don't monetize well. It is acknowledged that Apple's fee structure might not be attractive to all apps, particularly those with low monetization. The conversation highlights the need to find a balance that accommodates both successful and less successful apps.
European Commission's perspective on platform fees
The podcast explores the European Commission's viewpoint on Apple's platform fee. While some developers believe that Apple should be able to charge a fee for providing access to their platform, the EC questions the justification for any platform fee unless Apple delivers value. There is a discussion about the distinction between the marketplace being the app store or the entire iOS platform. The EC's anger over Apple's new guidelines suggests that they may push for changes and possibly enforce more sideloading opportunities. The podcast predicts that negotiations between Apple and the EC will likely result in a different compliance model and potentially reduced platform fees.
My guest on this episode of the Mobile Dev Memo podcast is David Barnard, who is the Growth Advocate at RevenueCat, the app subscription management platform. The subjects of our conversation are the new guidelines that Apple published, in quick succession, for alternative off-platform payments in the United States and alternative in-app and off-platform payments, as well as alternative app stores, in the EU. Fair warning, we get very granular on these guidelines.
I asked David to join the podcast because he is a high-profile independent app developer who has consistently championed the position of independent developers within the mobile ecosystem.
In this episode of the podcast, we discuss the specifics of the new guidelines in both the US and EU, the attractiveness of the new options made available in both regions, the less obvious impediments to implementing these options, and the general sentiment of these new opportunities to independent developers.
Thanks to the sponsors of this week's episode of the Mobile Dev Memo podcast:
Clarisights. Go to clarisights.com/demo to try it out for free. You’ll see why thousands of performance marketers trust Clarisights every day.
INCRMNTAL. True attribution measures incrementality, always on.
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