Apple's Cut From App Store Subscriptions Could Have Been 40%
Many users, developers, and content publishers have criticized the almost arbitrary but industry-wide practice of splitting revenues at 70% for developers and 30% for the store owner but it could have actually been worse. Back when that split wasn't yet set in stone, Apple was apparently planning on getting a larger piece of that pie. Of course, that is history and the company actually ended up getting less but it does give some insight on how things could have still taken a turn for the worse back in the early days of smartphones and apps.
The revelation came from internal emails that were submitted to the US House Judiciary Committee that is currently investigating Big Tech, particularly Apple and Google, over alleged anti-competitive practices. Part of that investigation naturally delved into the two's control of their platforms' app stores which, in turn, could have put some rival services and developers at a disadvantage. This latest piece of evidence also suggests how Apple could have strong-armed those publishers into giving it a bigger slice than they would have normally given.
The documents show conversations between Apple SVP of Internet Software and Services Eddy Cue, suggesting that they should take 40% of the cut of subscriptions made through the App Store, at least for the first year of the subscription. This was in 2011, merely three years after the App Store launched. In the end, however, Apple actually took even less than that, and now only takes 30% for the first year of a subscription and 15% for subsequent years.
It could have probably done Apple more harm than good had it pushed through with that plan. While already a force to reckon with even back then, the nascent iPhone ecosystem could have been hurt by what will easily be seen as a greedy grab for profits. Even the 30% cut for subscriptions was aggressively contested by the likes of Spotify and is causing Apple legal headaches to no end.
The 70/30 revenue split has always been a contentious one that has, until recently, simply been accepted as the status quo. With vocal criticism coming from the likes of Epic Games CEO Tim Sweeney and, now, anti-trust inquiries, that situation may change soon. For its part, Apple's Tim Cook emphasizes that not only did it actually lower its revenue cut, 84% of the app on its App Store don't even pay it a dime.