App developers will only hurt themselves if they try to leave Apple’s revolutionary App Store

“Apple and Google have made billions of dollars by charging developers to sell their apps on the tech giant’s respective app stores,” Daniel Howley writes for Yahoo Finance. “But now some of those app developers and their parent companies are starting to push back against the so-called app-store tax, which is often up to 30% of the amount consumers pay.”

“Epic Games, developer of the overwhelmingly successful Fortnite, has cut Google’s Play Store out of the app equation entirely by having Android users download the game to their phones from its own website,” Howley writes. “More recently, Netflix began testing a way to get around paying Apple a cut of its customer subscription fees by having users sign up for the service outside of the App Store in 33 countries, not including the U.S.”

“However, these measures could backfire on app developers for one reason: Consumers are lazy,” Howley writes. “‘Whenever you add a step, conversion declines,’ explained Gene Munster of Loup Ventures, referring to a customer who’s being ‘converted’ to a regular subscriber… ‘My guess is that, they’d be giving up more than they’d be gaining, because of the increased hassle,’ Munster said. ‘Some players, like Netflix, … may be a different animal, where they are so good people are willing to say, ‘That’s fine, I’m okay with jumping over this very low hurdle,’ but most people are lazy,’ Munster explained.”

Read more in the full article here.

MacDailyNews Take: We agree with Gene.

It does cost money to run Apple’s App Store and it’s certainly the most visible, effective, and efficient means of distribution the planet has ever seen. Again, this is capitalism at work. If enough developers can avoid the App Store and make more money then Apple will have to address their App Store fees (and Google will follow, as always). If not, then the cost of deploying via the App Store is worth Apple’s asking price.MacDailyNews, August 22, 2018

SEE ALSO:
Apple and Google face growing revolt over App Store ‘tax’ – August 22, 2018
Netflix tests a bypass of Apple’s iTunes Store billing in 33 countries – August 21, 2018

8 Comments

    1. Agreed! By going through the App Store developers can almost guarantee that their software did not pickup malware from external libraries and 3rd party plugins.

  1. A service has to be very desirable to make a consumer jump through hoops to join up. Also, I’d rather not give my credit card to anybody else if I don’t have to, and Apple lets me manage my subscriptions easily and with confidence that I won’t be overcharged.
    Because of the ease of signing up on my AppleTV, I signed up with netflix and have remained for years. Because when I tried to sign up with CraveTV, I started on AppleTV to sign up, but was sent to a browser to enter codes, and then would have had to adjust cookies on my browser and enter personal info to continue the process. By then I decided, I didn’t really need it anyway, so I gave up.
    Every year or so I’ve had the urge to sign up again, and been similarly discouraged. Prime was easy to set up on AppleTV so I signed up easily, and though I don’t watch much there, I keep it for convenience.

    1. Maybe you don’t remember carrier download stores on other phones prior to the App Store. It was brutal – purchases didn’t follow to a new phone, prices were insane and discovery poor. So, yeah, the App Store (and it’s ecosystem) are indeed revolutionary.

  2. Yeah, sure. It’s always said that Apple will hurt the most. Wall Street thinks every company is going to try to bypass the App Store just like Netflix is doing and Apple’s revenue stream will collapse in a heap.

    Some analysts actually believe Netflix is more powerful than Apple for reasons I’m not entirely sure of. Anyway, most companies don’t have the clout Netflix has as Netflix is part of the FANG group. Yeah, these analysts will back Netflix despite Apple being a trillion-dollar company with more than enough cash to go up against Netflix. It will be interesting to see which company wins this battle and especially how greatly it will affect Apple’s revenue stream.

  3. I’m old enough to remember life before the iPhone and the App Store. Nokia, Motorola, and others charged software developers 70% of their revenue to get on their branded phones. The software was not even transferable between phones of the same brand.

    If you took photos with your phone, you had to pay (by the photo) the phone company to be able to download them from the phone to your computer.

    Apple came along and broke this model. They offered developers 70% of their revenue, and they jumped at the offer. Now, they want to bite the hand that fed them.

  4. While it isn’t a brick and mortar store, Apple is regularly devoting ‘shelf’ space and curation to apps all the same. And I have been under the impression that Apple followed an industry standard of what retail outlets charge for goods.

    As always, wholesale and direct from distributed will be cheaper. But exposure is everything. The App Store is safe place that customers with linked credit cards trust. Seems like a safe investment. If you can’t profit off the figure than you need to re-evaluate the value of your offering.

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