Not necessarily. 🤷🏻♀️
Businesses may sell items/services at a loss.
Crucial difference:
- When you increase the value you provide to consumers by improving your product or service, you their willingness to spend. If you increase the price accordingly, you (all other things equal) get to keep that additional margin/revenue in full. Why wouldn't you be entitled to that?
- With commissions you don‘t. You pay more commission to your commissionaire (and in Spotify's case your biggest competitor). Does that mean that your commissionaire in any way improved his service, distribution or marketing for your products? Does it mean they, the commissionaire or agent, increased demand for your product? Not at all! They don't need to improve anything. So why would they be entitled to earn more from you as commission?
I see it as the difference between a percentage cut and a flat fee like the CTF (core technology fee). Neither is inherently better or worse than the other, it depends on where you are looking from.
With a percentage cut, Apple makes money only if your app makes money (and even then, only if it's paid directly, not from ads). A developer releasing a free app will never have to pay Apple a cent outside of the annual $99 developer fee. The downside is for paid apps, because the more they earn, the more they have to pay to Apple.
It's not that dissimilar from income tax, where I have people in my country who never have to pay a single cent of income tax, by virtue of their income being under the threshold, while I do have to pay due to my salary and singlehood status (no child relief to take advantage of). I don't exactly like it, but I accept that everything's interconnected. Those who earn more, pay more because they can.
In contrast, with something like a CTF, there is potential for a high-grossing app to keep more of their revenue (this typically comes in the form of subscription-based apps who bring in enough every year to offset the 50 cent-per-app download fee, and because the income is a recurring one, the developer doesn't have to worry about having to pay the fee indefinitely. For example, I am currently paying S$40 a year for ivory, a third-party Mastodon client. Normally, Apple gets $6 (15% as this is the second year). With the CTF, Apple instead gets S$0.73, the developer pays $1.20 for payment processing (assume 3%), and keeps the additional $4. Of course, the challenge is whether the developer can get as many people to download said app outside the App Store, as well as convince them to subscribe without the ease of iTunes and Sign in with Apple (since apps like this tend to have very minimal marginal costs incurred).
So this could mean higher revenue per user, but fewer subs, resulting in less total revenue overall. What's missing from this conversation is the aggregator role Apple has played in amassing a pool of consumers with high disposable net income who are ready to spend on apps and content, and in growing the pie for everybody, and whether they deserve credit for this.
And of course, the CTF is a poor choice for a free app, or one that does not really make all that much money per download (eg: a free, ad-supported app). It doesn't make each of them bad (though they are certainly worse compared to simply not having to pay at all). It just means that you are either at an advantage or disadvantage depending on how you choose to monetise your product, and I think that's what this conversation doesn't really address. Yes, it's bad for a few larger developers, but what's the impact on the entire developer ecosystem as a whole if these larger developers were allowed to get out of paying their share?
You all already know the answer, in that you have seen what generous tax breaks for billionaires have done to the deficit in the US, and the ramifications. Sure, it's easy to say "let the government (or Apple in this case) pay for it", but the money still has to come from somewhere, and come from somewhere it will.
