> When people buy access to a service via a subscription in an iOS app, they are essentially Apple’s customers. For privacy reasons Apple does not provide much information about them to the apps or businesses that run the apps. That means it’s hard to do customer service, address issues, or solve any problems.
> “The user experience is much worse,” a marketing executive from one company told me. “When you buy with the developer, they have a relationship with you ... when you buy from Apple: sorry, you’re Apple’s customer, not ours, and if you have a problem with a subscription … we can’t really help them.”
Now interview a real user of subscriptions instead of a brand marketing executive and ask them if the user experience is worse.
PS. Even when not confronted with such a piece, remember that Forbes is no longer the business journalism folks may have grown up with. For the past decade, it’s a blogging platform for independent contributors:
> Each contributor flies solo with his own blog. He is responsible for conceiving and creating the content, ensuring its accuracy and building an engaged, loyal readership. Forbes provides the technology and compensates some of the contributors, but otherwise, like all entrepreneurs, contributors are left to sink or swim on their own.
Mobile app operator here - let me clarify some things:
1. Until June it was impossible for a developer to issue a refund to an angry customer - Apple simply did not allow developers to do that, despite the app store being around for 13 years. This has led to untold frustration among developers - angry customers email us, leave horrible reviews, leave screeds on social media about how we “won’t” refund them, when in actually Apple reserved that right only for Apple support agents. Literally - if you forgot to cancel your Calm or Headspace subscription, neither Calm nor Headspace could give you a refund. You had to call Apple. That’s insane and leads to horrible customer experiences. (I can send you actual emails we got blasting us for this, and us pleading with them to contact Apple because we literally can’t do anything to help them).
2. You may love the Apple subscription experience, but we shouldn’t be letting Apple decide what experiences we do and don’t have online (within reason). For instance: Apple doesn’t allow subscriptions priced at less than $0.99. Why not? What if I had a product that i wanted to sell for $0.50 a month? Why should Apple get to decide that that’s not high enough? There are many examples of things like this.
3. I think we should grapple with the ideas and arguments of the author, when in this case or others, and not focus on the pedigree of the publication they write for
> Apple doesn’t allow subscriptions priced at less than $0.99. Why not? What if I had a product that i wanted to sell for $0.50 a month?
I’d pay $0.50 more.
I just had the unpleasant experience of canceling a non-Apple controlled service. It sucked. Pages and pages of “are you sure you want to cancel” dark patterns.
You guys did this to yourselves with absolutely shitty customer experience. Could not care less if Apple makes things harder for you. Do not care if I pay more.
Right, or there's me, with no dark patterns, easy cancellation (one email, we answer our phone) on a $1000/mo subscription app. And the hoops to get into apple, and they wanted a cut, even when users create an account and engage from our plain web-app ages before trying for iOS app. It took almost a year to get approved with Mostly our terms, apple forced a bunch of changes - which frustrated our users (who just went back to the web-app). For us, Apple was a zero-value time-suck, degraded user experience, and since we're not assholes, the IAP benefits were moot for our clients.
App store is classic rent-seeking; it's also an economic force. So, we've pulled our app, but I'm long $AAPL
Yes, I'm sorry the millions of developers with their $3.99/mo apps ruined the experience for your unicorn $1,000/mo app. I'm sure your users, with such a high need that they would pay so much, are perfectly able to find a workaround.
I’m all in favour, as a user, for Apple IAP subscriptions. But shouldn’t “the market” be able to send a signal that they prefer that?
Shouldn’t Apple’s IAP actually be able to compete on its merits (like the better experience that we both prefer!) rather than arbitrary platform lock-in?
If, faced with actual competition, users and/or developers do not chose Apple IAP, wouldn’t this signal to Apple that they need to do better and improve their service?
Not OP, but market does send a signal when I prefer that. That's how I signed up for Netflix and Spotify. I saw that in-app prices were high when I tried to sign up, looked elsewhere and found out that website prices are lower and now apple doesn't get my cut. But for everything else, I am happy paying apple more because I only have trust for a few companies. If apple is charging app developers more than they should be, those apps can have their own billing page and manage the billing and let the user decide how they want to pay for it.
Yes, users know how to shop around. That's how they buy cars, groceries, gas, computers, cellphones, etc.
> If apple is charging app developers more than they should be, those apps can have their own billing page and manage the billing and let the user decide how they want to pay for it.
The problem is that on iOS apps are forbidden from telling their users that this is an option.
It's not much of a fair market if one of the items have been removed from the shelves and you have to specifically ask for it and the price.
Is it fair if Spotify and Netflix are charged a 30% tax on Apple's platforms when Apple's services arent?
Should Apple be required to warn you that it'd be cheaper? Definitely not. But when you've taken the milk home the milk should be able to say "Hey, If you buy directly from us it's 30% cheaper!".
Right now Apple prohibits developers from being transparent about what the users choices are. I think it is wrong that developers are not allowed to explain the rules to its own users.
Apple should compete on the product itself, not technicalities and obfuscation. There should be pressures on Apple to lower prices for what it charges.
To some degree the competition exists...you leave the iOS ecosystem. Besides all the trendy parts of owning an iPhone (iMessage, camera, "fashionable") the simplicity of not getting burned by apps (or the veneer or not getting burned as often) is clearly valuable to consumers.
What would an acceptable solution to letting both styles compete? (would it be controlled by the phone's settings and the end user can change how they manage their subscriptions? Is it at the app level?)
MacOS is a great example - you can buy and download software from the Apple sanctioned App Store or you can get it from other sources on their websites. The fact that I can do that on an 11 inch MacBook Air but can’t on an iPad Pro (which with a keyboard looks like almost the same device) seems pretty silly to me.
I see no incentive for Apple to become motivated to do this on their own.
Google, Nintendo, Sony, Microsoft all wish their app stores could be as lucrative as Apple’s, and most of these are trying to do exactly what Apple is doing.
What other product exists that is able to take such a large revenue cut from 3rd party product enhancers? Is this possible outside of software? Don’t see why Apple would give that up unless they were forced to.
The end user is not the consumer segment that cares about this. As evidenced by many comments in this thread, most Apple users value the curated app store and its payment features. App developers just enabled Apple to get away with it.
The market segment that would have to resist would be the app developers themselves, but no individual app is attractive enough to do that. Even Microsoft attempted to keep Office products off iOS for quite some time. The cat is out of the bag at this point. Ironically, it seems as long as Google/Android still commands a significant market share, it's unlikely to be viewed by the courts as a monopoly. That just means Google will try harder to become like Apple, but they're going to have an even harder time back-tracking the path they've gone down.
The thing about Apple is not only have they prevented in-app payment processing, they have also prevented side-loading. This combination makes the App store so powerful. Probably some of the reason why they don't support PWAs well etc...
From the Epic decision it sounds like the courts may be inclined to allow 3rd party in-app payment processing as long as Apple still gets a cut. It's debatable which would be "worse" for end-users -- allowing them to side-load or allowing 3rd party in-app payment processing. It's probably less debatable about which one Apple prefers.
From the developer side of things, if 3rd party in-app payments are allowed and Apple still gets a cut what was gained? If Apple is forced to allow side-loading, you better believe they're going to make enabling that feature seem as scary and obscure as possible to the end-user.
There’s already a solution to dark patterns: chargebacks. Apple probably makes it worse by taking this avenue away because if you try to chargeback apple they probably just suspend your account.
Chargebacks are no panacea for dark patterns; issue too many and you’ll start getting your card blacklisted from payment processors. I did this a couple times with an online retail store that was especially egregious on the dark patterns (sneaking things into your cart on checkout, etc) and my card would get rejected at certain gas pumps and online stores for the next 6 months. It wasn’t all of them, but a good 25% simply wouldn’t take that card.
I have never heard of a universal blacklist for chargebacks (spanning multiple unrelated businesses), and I don't think it exists. I've charged back transactions for legitimate reasons (such as fraud and false advertising) on quite a few occasions, and I've never received any kind of penalty. Even if there were such a blacklist, you could simply ask your card issuer to change your card number to get around it. In fact, when you perform a chargeback for a fradulent transaction, most card issuers immediately cancel your card and issue you a new one with a new number.
Now if you file a chargeback against Apple or Google, your account with that company will almost certainly be permanently disabled, based on what I've heard from users who have done it. This is a significant setback for consumer protections, and makes it less advisable to concentrate your digital identity into either of these companies' services. However, as inconvenient as it may be to get banned from having an account with Apple/Google, it shouldn't blacklist you from using your card at any gas stations or online stores, assuming that you aren't using Apple/Google payment processing.
While it’s possible Stripe implement this implicitly via their “fraud detection” machine learning model I’ve never heard of any blacklists currently being used and I operate an online retailer.
That being said you’d have to be purchasing from shady merchants quite a lot and using lots of chargebacks (and presumably losing them) to be blanketed.
It was a few instances where a store crammed something in my cart, then ignored all contact when I requested to return them. So I ended up with both the money and the merch, which I suspect means they flagged me for “fraud”.
Needless to say I don’t shop at that store anymore.
I'd argue there is no reason why Apple cant force a much better, simpler or even standardise canceling experience without taking away all the relationship between your client.
It’s insane that Apple publishes tabled of all the “allowed” prices in a PDF file.
If you haven’t seen it, it’s because you’ve never read the App Store agreement. They have a table in the PDF that lists out every single price you can charge. $0.99, $1.99, $2.99, … , $999.99. Per country too. Want to charge $1.49? Sorry, it’s not on the table of prices. It’s just absurd.
There are minimum per transaction fees for most processors, so if you go at this alone, and you'd find that charging very small increments may not be feasible.
And I'm sure Apple, being a small fish that they are, would be able to negotiate custom fee schedule to accommodate very small transactions. They just don't want to.
I just thought one thing no one seems to have point out yet. Apple framed this as a standard practice in business.
Yes, in a Supermarket, they will advertise your product on your behave. But customer dont run to Kraft Heinz, Johnson & Johnson, Procter & Gamble or Coca Cola for refund. They go straight to the store they bought it with. Or a better analogy would be tools ( multi usage ) rather than consumables. Consumer buying a tool will still return their tools to Home Depot rather than making complain about the tools maker not doing refund. But with Software that is not the case. Nearly all software are treated as "services" by consumer whether they are charged with subscription or not. And customer will act the same if they bought a services from Walmart. Let say Disney+ or Netflix. They will go to Disney and Netflix to complain or refund, not Walmart.
I think this distinction is quite profound ( to me at least ). Because we often use the product analogy with Software and Subscription. We even have a term SaaS ( Software as Services ) when in fact nearly all software are in some way treated as services by consumers. And of course Software developer have long thought of it as services due to its constantly updating nature.
So this mismatch, between how App Store operate, how Apps are priced and how consumer behaves with software seems to be fundamentally wrong.
On the contrary, the CDPR release debacle shows consumers expect the refund from the app store aka the console store front, whether Microsoft or Sony. They’re mad at CDPR, they want their money back from Microsoft or Sony. And given that noise level, Sony yanked Cyberpunk2077, just as Apple might. Or Walmart with a bad batch of ketchup.
Similarly, people buying from the app store BnL don’t go back to the app store to find the developer web site and go there to look up a support phone number to ask a human if they can please cancel by physically mailing a certified letter somewhere (how you cancel most first party subscriptions). They go to the subscriptions settings and cancel.
I’d argue that is indeed exactly like Heinz vs. Walmart or whatever.
As an iOS user, I do not want the publisher knowing anything about me. I'm happy to pay for the app, but I do not want to tell the publisher a single thing other than the fact that it is paid. Nothing else. I do not want to share my email, I do not want to share any form of cardholder data.
I want to cancel in one tap for any subscription. I do not want to go through shitty, abusive retention flows.
It is quite sad that most Americans see Apple's exploitation of a lacunae in their law (not allowing easy cancellation of subscriptions) as some benevolent act from it.
Two questions:
1. Are you fine (edit) as a consumer (/edit) paying 30% more for this, especially when you are just trading data collection from the App maker to Apple?
2. Wouldn't you rather that everyone had this protection, and not depend on the mercy of corporates for this?
I absolutely am not fine allowing Apple to charge 30% extra, especially when other payment processors only charge around 2 to 5%. And Apple forcing themselves as a middle man is more of a concern here as they have more potential to exploit me commercially, using my data, than some non-BigTech app maker. The 2nd question is more pertinent to all of us as consumers - thanks to Indian laws and regulation, I can easily unsubscribe to any service, and that protects me from exploitation both from Apple and any unscrupulous service. That is what we should all be working towards (more consumer rights). Any support for Apple on this is totally misguided - if they genuinely cared about your rights here, they wouldn't be gauging 30% of you in in-apps payment, without even telling you that money goes to Apple.
I'm fine paying another relatively neutral party provided they do not pass ANYTHING on to the final publisher. No name, email, country, anything. Too many bad experiences. If the alternative was to subscribe with Stripe or Braintree, I would just not subscribe. Sure, I might trust Stripe, but I do not trust the end-company to be reasonable or safe stewards of the data that can be exported. Time and time again, repeatedly, this has been proven.
There is a difference between trusting a single company to run all your transactions through them and giving your card out to the 20+ places you subscribe to.
I trust Apple (and Google) on data security several orders of magnitude more than any generic publisher. While I may not like the privacy part, at least they tend to hold it better than any other generic app.
As an additional note: I would love to see such a privacy-respecting third party exist. Ideally, they would collect nothing at all and exist via prepaid value.
Several years ago there was a company similar to this called UltimateGameCard - they were a neutral third party not associated with any publisher that strictly handled paid-in-store prepaid value PINs that collected no personal information and were partnered with dozens to hundreds of game publishers, and supported hundreds of different major games (and several software publishers).
They were available in almost every store, and using them required no privacy violations. Explicitly, their largest customer base were minors (like me at the time), and not collecting PII or even name made it great and a first choice for them.
The low incidence of fraud and inability to chargeback the company (cash only in hand; and you could still dispute the game publisher via the prepaid company to get value added back) resulted in extremely low fees, to the point where games would give you bonus value if you chose this instead of a credit card or other. They had contracts with basically every major publisher - Club Penguin, Runescape, Everquest, etc, and your funds were good almost every game you'd play.
They generally respected both sides of the market: you, a 12 year old, could ask customer service if you were genuinely ripped off or accidentally claimed too much value at a specific publisher but didn't use it yet, and they would treat you like an adult. The game publisher could refund the value if you didn't spend it yet, and not be hit with any form of chargeback or dispute fee or any increase in fees at all. And since it was paid in cash, if you were lying about it or just upset you failed your loot box gamble, you got nothing back. It was also more or less publisher contract based so random IAP trash couldn't just sign up and take money - all the big names were on this.
Regarding #1, no one is stopping any app developer from charging 30% more than what they currently do and seeing if consumers will stay with them. Apple already has my data... they have time and time again proven to be reasonable stewards of that data. I do not want to play a guessing game with 40 other developers to see if they all follow that. I've been burned too many times.
Regarding #2, we didn't depend on the mercy of corporates in the PC world. I saw firsthand how annoying it is to debug my parent's computer repeatedly when random apps get installed or terms of service overstep. For less tech aware consumers this is almost certainly a win in terms of privacy and general experience.
When I say cancel in one tap, what I mean is I have a list of every subscription I am holding, and I pick that one and it goes.
I do not want any kind of retention, I do not want to be messaged in any way, just stop renewal. I do not want to call in, live chat, give a reason, etc.
This is a very odd comparison. You’re comparing a past workflow for one service against an existing workflow for an entirely separate service, but only speculating on whether it is actually less.
It’s currently 6 taps to cancel a single subscription in Apple and 2 taps extra for each service you want to cancel right after. I love knowing that I don’t have to figure out what magical incantation I have to do to cancel any/every service I sign up for.
Last I checked, it's also incredibly difficult to cancel an Apple subscription if you've switched away from the ecosystem and all you have on hand is Linux and Android.
There are pros and cons. As one example my son purchased $500 of skins in Fortnite on Nintendo (I had the card saved, my fault since corrected). Trying to get that refunded was a huge drama because I had to go via Nintendo rather than Epic. In this specific scenario I would have preferred a first party resolution.
Interesting. I’ve had Apple proactively email me about parental controls along with an offer to refund what they seem to have considered excessive in-game currency IAPs.
I’d be amazed if the game publisher would have cared at all. No amount of future loyalty to the one game would have offset the cost of the refund. Same is not true for Apple or Nintendo.
IMO businesses selling apps have dug their own grave in the customer relationship department. In the last 20 years I've only had 2 or 3 tech support experiences where someone helped me solve a problem I'd consider non-trivial.
Businesses have cost cut and devalued support so much that it's not worth having a relationship with them. They only want a sales relationship and you're on your own when it comes to support.
What does having a relationship with them get me as a customer?
Or rather - spoken like an American? Outside the US, it is quite easy to cancel such subscriptions as the consumer laws are in your favour. Apple's exploitation of this lacunae in US laws is sadly being interpreted as some benevolent act from them. If the US has similar stronger consumer laws, both Apple and other companies wouldn't be able to exploit Americans.
California has their shit together on this (if you can sign up for something online, you must be able to cancel the same way), but the rest of the country hasn’t caught up yet
As an individual, I would rather buy a newspaper subscription from Apple instead of paying for a 13 week subscription from the paper directly, billed monthly.
As an enterprise, I don’t want to be stuck dealing with a mercurial and pain the ass middleman like Apple for anything significant to my business. I have the market power to get terms from a company like Adobe or whatever, but with Apple, we get a very polite “Fuck you, we’re Apple, you are not Apple. Be thankful we are selling our beautiful things to you.”
The reasons why I can’t stand Apple for B2B are why they are delightful to Spooky23, the individual consumer.
>Now interview a real user of subscriptions instead of a brand marketing executive and ask them if the user experience is worse.
Their experience is better when they signed up, mostly due to Apple's integrated API and enforcing standards.
Their experience is much worse when they have dispute. Because no user think of themselves as Apple's customers. They are using your App or Services. Telling them to go to Apple doesn't solve their problem.
If the experience is truly better, and if Apple owns every single transaction and relationship. Why is it the developers gets the blame every time when there is a problem while Apple sitting their enjoying their 15% to 30% commission?
Apple is muddling rent-seeking, developer tooling, support, discovery, distribution and services all into that 15-30%. And they happily dance around that one of these stance every time they are questioned.
imagine have issues with 10 apps you bought on your iphone. having to go through 10 developer's refund process is a nightmare. I would rather just go through apple.
>You can no longer help the customer who’s buying your product with the following requests: Refunds, credit card changes, discounts, trial extensions, hardship exceptions, comps, partial payments, non-profit discounts, educational discounts, downtime credits, tax exceptions, etc. You can’t control any of this when you charge your customers through Apple’s platform. So now you’re forced to sell a product - with your name and reputation on it - to your customers, yet you are helpless and unable to help them if they need a hand with any of the above.
Unfortunately, from a user perspective, in aggregate, the reputation of Apple beats the median reputation of devs at doing all those things in a customer’s favor.
So odds are subscribe through apple has better experience.
You, as a dev, may offer better, for sure. But the user cannot count on that.
> Now interview a real user of subscriptions instead of a brand marketing executive and ask them if the user experience is worse.
I'd say the same thing. Much prefer dealing with individual app developers. I go out of my way to purchase through them over Apple. It's far more secure for me as a consumer to go through individual app developers than through Apple.
Basically a transaction receipt is all the app gets. It’s up to the app developer to associate this purchase transaction with any app related user identity information.
RevenueCat had a decent explanation for this considering this is their main product:
Lovely corporate ethics. I posted this in our company slack room as an example of how not to act for bizdev
Google benefits too much from this sort of arrangement to have any incentive to stop it, even though these are unauthorized advertisements that are specifically against Google's AdWords TOS (side note, I wonder if there is a legal avenue to follow when a vendor doesn't follow their own TOS? An interesting thought...).
This is also a recurring issue with all of Google's advertising revenue -- malicious behavior such as fraudulent clicks, unauthorized ads, etc., are a decent portion of the revenue stream, and Google is financially incentivized to keep these sorts of abuse going until the ruse is up and the accuracy of their system is called into question publicly in a way that scares away advertisers, but with NDAs and corporate secrecy, it is far too easy to keep things unbalanced, and keep abuse like this in the dark.
Business models like this demonstrate just how dire the need for regulation is in some areas of the tech world, particularly among FANG.
a) It is not against AdWords TOS provided you have permission to use their trademarked terms. Which Apple has since in the Developer agreement [1] they have been assigned permissions to use logos, trademarked terms etc in marketing material.
b) Google is incentivised to tackle abuse within their system. It's ridiculous and baseless to say otherwise. Lack of integrity in an ad marketplace very easily can translate to lost dollars. But unfortunately with spoofing being trivial it's simply hard to detect and manage abuse.
c) There is no regulation that will prevent this. App developers have signed a legally binding contract.
I don't think your message will register here. The OG commenter spent the whole comment bashing Google, and the comment doesn't even mention Apple. That should tell you something.
If Google stops Apple from doing so as the OG commenter wants them to, there'd be dozens of hot takes how Google is abusing its platform to prevent Apple from advertising. And the same group of people would be outraged at Google again.
I think it would be completely crazy if apple did this without entering into a special contract with google. Theres no way some sales engineer just signed up for a google ads account one day
a) Apple will be a big customer for Google but nothing compared to companies like P&G who manage hundreds of products or those who have more competitive search terms. And in this particular case it's neither.
b) Apple has a dedicated App Store Marketing team who likely signed up or maybe they used their main account. Either way it's pretty simple and you don't need to ask Google's permission.
That Apple would do this is interesting, but more interesting to me is Google's position, and obligation, here. There was a throw-away line in the article about Google "not doing anything about it". What could or should Google do about it? Has Google mediated between competitive ad-buyers in the past? I am not sympathetic to goog in general but it seems like that line puts them in a no-win situation: either they err for not doing anything, or they err for doing something (but not the right thing). Indeed, in this case it would seem the corrective action would better come from Apple than from Google. (Also note this whole play feels like Apple trying to get creative with ways to productively bleed off ridiculously huge capital reserves in a low risk way. It would be ironic for Apple if this blows up into a big thing, but somehow I really doubt it will. )
Indian laws are quite clear that Google has an obligation not to allow ads on trademarked terms (used as keywords):
> Justice V Kameswar Rao also observed that allowing individuals who are not owners of a trademark to choose a keyword which is a trademarked term or use parts of the trademark interspersed with generic words in the Ad-title or Ad-text may constitute an infringement of a trademark or it's passing off. The Court also opined that the use of trademarks as keywords amounts to "use" in the course of trade in terms of the Trademarks Act.
Something similar is happening here - it seems clear that Apple is also bidding for the trademarked keyword "HBOMax" to show their ad to mislead the user to their app store. As per the indian courts, this can make Google liable if they don't act on complain from the trademark owner.
This is my understanding as well. Although it would be interesting if Indian law forbids entities from signing away this right. (Not all contracts are valid in all jurisdictions - which is certainly well-known to the general public, because every individual hires an attorney to review every Terms of Service, and makes sure they understand and agree with every clause before they agree to it.)
It's actually an interesting question how nefarious or harmful this actually is.
We obviously know why Apple is doing it and why the apps in question don't like it.
But a couple things occurred to me:
You could view this like Amazon giving away your book or android app in a promotion. As I understand it, they still pay the author as if it were a sale, so the author seemingly has nothong to complain about. Even that still seems wrong to me but that's the argument Amazon uses. That is essentially, no, litterally, Amazon advertizing your product for their own purposes.
Another argument Apple and Apple devotees and general "invisible hand" worshippers may try to use is: Any sales generated by the ads would not have existed without the ad, and so it's not taking anything from the app developer.
I don't really buy either theory, but it does take some thinking to describe a mechanism by which they cause harm and should be considered invalid.
They hold enough water to convince a lot of people who want to be convinced, and the arguments against just sound kind of weak and whiny.
>Any sales generated by the ads would not have existed without the ad, and so it's not taking anything from the app developer.
This argument is not very convincing in my opinion, as it looks like Apple is purchasing ads for brand keywords. If the ad wasn't there, the customer would go to the brands website, which would be ranked #1 without the ad.
Yes, but an ad to a competing product would become very expensive, as it wouldn’t convert and it’s cost (cpc) would increase as it is deemed less relevant.
Or the the developer would run their own ad.
But those are very different propositions to a middle man running a ‘genuine’ ad which simply takes a cut.
The example shows the brand name being ranked 1st. For this to be a poor result for the brand it would require cannibalisation rates to be high enough to push the 15/30% fee higher than their margin - that’s not realistic because the app store price would never be at a loss to begin with (with many alreadying increasing the app store fee to match the 15/30% cut.)
In all likelihood the end result is a net profit for the developer at the expense of their competitors.
Also neglected for consideration: the developer doesn’t pay for these ads - and the scarcity isn’t high enough to meaningfully affect bid pricing over regular competition.
It doesn't need cannibalisation rates to be high enough to push the fee higher than their margin to be worse off, it just needs (delta between direct and App Store margin) * cannibalisation to be greater than the opportunity cost of users who would have given up trying to subscribe to HBO if they hadn't seen Apple's search result [assuming click costs/volume differences roughly even out]. I don't think it's exactly difficult for people to find a link to HBO Max from those results if the one that says "Download the HBO App" isn't there
Sure, they still make profit from the Apple signup, but less than they would have done if people were signing up from their website.
Needless to say if the App Store price is increased 1:1 to match so the developer definitely doesn't lose, it's a terrible deal for the consumer instead (if you're Googling, it's not even like Apple can claim the App Store is adding value with simplicity of discovery...)
I run a big portfolio of mobile apps, and the discussion around this is misguided. It's not about Apple taking 30% of the revenue generated from these ads.
It's about Apple driving up the user acquisition costs for these companies so much so that it become entirely uneconomical for them to buy ads that direct users to their own websites, and instead the campaigns that target users to download the app - which results in 30%-to-Apple IAP subscriptions - become much more attractive again. So Apple is trying to make the cost of running these ads so prohibitive to the companies that they stop trying to drive web subscriptions and instead go back to driving app subscriptions only, where Apple gets 30% of everything.
As you can see it's even more sinister than it first appears - it's not a short term land grab, it's a long term strategy to prevent developers from legitimately acquiring users outside of Apple’s walled garden.
(Looking at the economics make this even more clear. Let's say Tinder has a $100 subscriber LTV (lifetime value). If the user purchases the subscription in the app, Apple takes $30 of that, so if Tinder wants to run a marketing campaign on Google, Facebook, etc that drives an app install, they can't pay more than $70, otherwise their spend has a negative margin.
On the other hand, if tinder can use these ads to get people to subscribe on the Tinder website, they have a ~$97 LTV ($100 minus 3% payment processing fee via stripe/adyen/etc). So now they can run a campaign on Google where they can spend up to $97 to acquire a user, much more than the $70 before. And because Google and Facebook inventory availability scales non-linearly with your maximum bid, a 38% increase in acquisition cost allowable could mean a 100% increase in available inventory, and potentially higher quality inventory at that.
But if Apple - with their unlimited cash pile and not caring about negative margins - comes in and soaks up all this inventory by bidding the same $97 for every user, all of a sudden the cost for Tinder to acquire these users goes way up and becomes negative margin. At that point, the rationale thing for tinder to do is stop running these campaigns. This means they stop getting web subscriptions, stop diversifying their business away from Apple, and Apple maintains its iron grip on Tinder.
Remember, in this case Apple is paying $97 to acquire a user who will generate $30 for them (30% of the $100 LTV), so they're massively in the hole on this spend. But they don't care because their goal isn't to profitably acquire users; their goal is to make the costs for Tinder to create a more diversified business so high that Tinder stops trying to. That's some f-ed up sh*t.
I don’t entire understand the ad market, so sorry if this is a stupid question, but if Apple bids $97 per user and wins, then that’s more than the $70 per user Tinder would get, that makes sense. But since that user didn’t cost Tinder anything, aren’t they +$70 since Apple ate the acquisition cost, instead of +$27 where Tinder only had to spend $70 (under the no-Apple bid price) to earn $97?
The problem is that what you describe is the short term positive impact to Tinder. But that’s far outweighed by the long term negative of having your whole business dependent on the whims of Apple. For example, anytime Tinder wants to make an app update, Apple has to approve it. Well, if Tinder goes after Apple with regulators by filing complaints and pointing to antitrust violations, Apple now has the power to mess with Tinders business. Or if Tinder wanted to offer its users a 20% discount as an inducement to subscribe directly with Tinder rather than through Apple, Apple can and does prevent them from doing that right now by refusing to allow Tinder (or any developer) to reference in the app the fact that lower prices can be achieved by subscribing via web. The examples are countless, but essentially the more reliant Tinder is on Apple, the worse for Tinder and the better for Apple.
Thanks ;-). I wasn’t sure there wasn’t something I was missing.
> the more reliant Tinder is on Apple, the worse for Tinder and the better for Apple.
So you’re saying that the long-term impact for going through Apple IAPs isn’t just the 30% margin, but also increased reliance on Apple, and less knowledge about their customer base? That makes sense, I get why Tinder wouldn’t want that. Thank you :-)
The article doesn't have to say it because it's just the way that google ads work. It's a bidding-based system, so at the most basic level the person who bids the most wins the auction and their ad is shown. If the LTV of a customer is $100, and there's a 3% processing fee for web transactions, then Tinder will bid up to $97 to acquire a customer. So Apple has to pay at least that much to acquire that same customer in order to win the ad auction. Once Applr has paid that $97, the user now downloads the app and subscribes via Apple’s IAP system. Apple takes 30% of those revenue while Tinder gets 70%; so Apple gets 30%*$97 = $29. So they've spent $97 and received $29 ----> they have a negative $68 margin on that spend.
I agree that that's one way it could work, but it seems really unlikely to me that Apple would be willing to lose so much money on a project like this. Some other possibilities that I think are more likely:
* Apple has a higher LTV estimate than Tinder for this traffic.
* Tinder has less available capital, so they are not able to outbid Apple even though they think that they would still earn lots of money at that price.
* Perhaps someone who is looking to subscribe to Tinder is likely to succeed even without advertising, but without Apple's ads it won't be via Apple's IAP. The amount it's worth to Tinder for a subscriber to come to them directly instead of via Apple and the amount it's worth to Apple for a subscriber to come in via IAP are about the same.
(Disclosure: I work on ads at Google, but not search ads. Speaking only for myself)
Remember, it's not that much money for Apple especially considering their whole app store business model depends on taking their 30% tax. Maybe we're talking about $50m/yr vs app store revenues of $10b (?) a year (and 70%+ margins per docs in recent court cases). They would absolutely be willing to lose this money if it extended their stranglehold on app developers - it's the same reason they fight tooth and nail in every jurisdiction around the world to prevent regulation of their app store behaviors and fees (Japan, Korea, Netherlands, UK, Australia, Arizona, US federal, etc). These lawyers probably cost them about $500m/yr (without revealing my identity trust me that thats a very reasonable estimate).
As to your bulletes points:
- Tinder is owned by Match Group who - before Tinder - spent 20 years building a paid acqusition machine. In order to do paid acquisition you have to deeply understand the LTV of your users. That methodology, refined iver years at Match was ported to Tinder (just read Matchs earnings calls). While Apple has access to all ybe transaction data of apps on iOS, so do then defelopers, who are highly resourced and highly motivated to understand their LTV/CAC. So no, I dont believe for a second that Applr has an advantage here. And even if they did, applr only collects 30% of the revenues - how could they ever guy profitable when bidding for the same slots as the developers who Are getting 70%?
- Capital - nope. Match produced close to a billion dollars a year in cash flow. HBO billions. Capital isn't an issue for either of them.
- I disproves this hypothesis with the LTV illustration above. To be clear: Theres no scenario where apple can be profitable on this spend when they can only ever get 30% of what the consumer spends.
Sorry, I don't understand how your response applies to my third point? Tinder would not be willing to spend $97/user because that is only worth it for users they would not otherwise acquire. In this case, I'm positing that these are users who already want to subscribe to Tinder, and are going to do it somewhere, the only question is whether Apple can get them to sign up through the IAP flow and take a 30% cut. If I'm thinking about this right, this means that it is worth just as much to Apple to get one of these users to sign up through IAP as it is worth to Tinder to get one of these users to sign up directly?
Sure! Imagine we're talking about users searching in a way that indicates very strong intent to subscribe, like "how do I subscribe to Tinder". These users are almost certain to subscribe. There are two ways that can happen:
a) They can click through to a Tinder site, where they subscribe directly.
b) They can click through to the App Store, where they end up subscribing via Apple's in-app purchases. Apple gets a 30% cut.
Assuming your $100 LTV from before, in (a) Tinder makes $97 and Apple makes $0 while in (b) Tinder makes $70 and Apple makes $27. Tinder clearly prefers (a) while Apple prefers (b), but by how much?
Tinder: they make $97 - $70 = $27 more in (a)
Apple: they make $27 - 0 = $27 more in (b)
This means both companies are willing to bid approximately the same amount, since their profit on winning, relative to what would've happened otherwise, is $27.
I would expect Tinder might be willing to bid more than $27 (per conversion) even if they only ever used Apple payments.
Any marginal conversion that Tinder creates (either against a competitor or non-consumption) is worth over $50 net to them using Apple payments. ($50 would assume a generous $20 marginal cost to serve.)
That doesn’t mean that the data that Tinder’s ROAS team is looking at will guide them to spend more than $27 in this case, only that it might.
Likewise Apple could spend $27 on every customer they converted who was already going to be paying Tinder on the web to buying via the App Store plus $27 for every user they added to Tinder who paid on the App Store who would have not bought or would have gone to a competitor (minus any credit Apple would have earned there) plus an amount of cashflow and enterprise value created by people seeing ads for Apple’s store and concluding that Apple has more/better apps than their competitors.
If we confine only to first-order effects and assume advertising is exclusively about changing payment preferences of users who would convert anyway, I’d expect both companies to be willing to bid close to $27.
Think about this way: both companies are bidding on the same keywords. One party (the developer) collects either $97 if the consumer signs up on their website directly or $70 if the consumer downloads the app and signs up via the app store. The other party (apple) collects only $30 (at a maximum) if they drive the user to sign up via the app store (30% of a $100 LTV).
If they’re both bidding on the same keywords, which they are, then the price of the keywords is the same to each of them. It’s an auction, so whoever bids the most will win the auction. The developer can spend up to $97 to bid on that keyword and still be profitable or at worst break even, while apple can only spend up to $30 to stay profitable or break even. So if Apple is winning auctions, it means they’re spending more than the developer, despite having less than half the purchasing power of the developer. So they’re spending negatively almost no matter what.
Again, by definition theyre going into negative margins because they can only ever get 30% of the revenues; how could they compete with the developer who gets 70% of the revenues without going negative?
1) more demand in auctions means higher prices. so if apple is taking the second slot they’re almost certainly increasing the cost of the 1st slot for hbo. which is apples whole point: to increase the cost (literal and figurative) of hbo’s efforts to get people to sign up via web rather than via app.
2) in the world of search marketing - including both on google and the app store - there is a strong belief by brands that they MUST be the #1 paid result for their branded search terms, no matter what. so what you’re seeing here is hbo saying “we always have to be #1 on our branded search no matter the cost”. This is exactly why people complain constantly about google showing competitors ads when the original company’s brand is specifically searched for by the user - effectively the competitor is freeloading on the incumbents brand searches to drive traffic (by paying to show ads on those searches). Google doesn’t care because they make more money this way (more competition for the branded keyword drives up CPCs).
all of this is to say that apple being in the #2 slot doesn’t say anything about the intent of their actions here, which is to make it uneconomical for companies to move users off apples rails onto their own systems.
Both sides run services which have costs, the customer acquisition needs to take into account the potential profit of having the customer and not just raw revenue.
Maybe Apple clears 15% of the user's purchase price after credit processing, tied-in platform development costs, customer service/hosting fees, and the 70% payout to HBO, and HBO clears 15% after licensing, hosting, app development costs and the 30% fee from Apple.
In this case, HBO would be motivated to have a website sign-up to raise their 15% to closer to 40%, and Apple would be motivated because otherwise they are negative for the lifetime of the subscription.
This is a second price auction, so the person with the highest bid pays the amount of the second highest bid. If Apple is bidding $97, their cost to acquire the customer may be substantially lower than $97 (their cost is whatever the second highest bid is), but they are forcing others in the auction to spend at least $97 to get the customer.
You're right on two accounts:
- Google gets paid no matter who pays, so they don't care
- Tinder still gets the revenue (and at better margins bc they're not actually have to pay for that user anymore - Apple is paying)
And even your last point is not wrong: at some point Apple may stop doing this. But that could be year's away, and in the meantime, they're throwing their big stack around to make it too costly for developers - who Apple supposedly partners with - to build businesses that are less dependent on Apple’s whims. Plus, Apple uses the fact that most subscribers to app store products subscribe on the app store itself to bolster their case with regulators that no reform is needed bc consumers are overwhelmingly happy to use Apple’s IAP systems. But if Apple is putting it's finger on the scales in order to actively drive users away from web subscriptions, then they heavily misleading these regulators about the true “choices” consumers are making.
I think we can assume Apple is getting enough out of it to run this scheme permanently.
Unlike Tinder, they can get extra revenue from the user staying in the ecosystem (active credit card registered for IAP), getting used to Apple’s service, and keep buying Apple devices. Their LTV of the user is not just the 30% cut.
You do it while a service is growing, to capture most of the subscribers. Once growth dies down you stop buying and while the subscriber base will slowly bleed from app to web, you can ride the revenue stream from the growth fase’s subscribers for a long time.
On the Amazon part, the harm is caused by your book losing value during the Amazon give away and a while after.
For instance any other seller of your book is affected, so you potentially lose distribution channels.
Customers also get attracted to Amazon, but your book is only seen as a bait, and when it goes back at the regular price it will be less desirable (some will have negative feelings of having missed the sale, some will keep seeing your book as something only worth giving away).
If your book has a short shelf life and you didn’t expect much of it, or if it’s a stepping stone into a series and you could have given it away anyway, Amazon footing the bill is a boon. Otherwise it probably shortens the life of your book.
"A reseller offering both trade mark goods and competing products is not precluded from using the trade mark in advertising, provided that the reseller safeguards the legitimate interests of the trade mark owner. The German Federal Court has found that if a trade mark is used misleadingly in advertisements originating from a Google search resulting in the exploitation of a trade mark in a way that guides the public to third-party products, such use may provide a ground for the trade mark owner to oppose the use of the trade mark."
This was specifically re: Amazon using a trademark in AdWords to redirect sales to Amazon, where they then of course also sell competitor products.
This might be moot of course if you granted Apple rights to your trademark in whatever agreements, but then these agreements are also frequently found inapplicable so ymmv.
This shows just how much a monopoly Apple has over brand <—> customer interaction.
They say that their app store not allowing side loading is for user safety.
In actuality, it forces the brand/company/startup into a place where they're completely shackled. They pay 30% taxes, have no customer relationship, and have to step through every hoop to satisfy apple.
The handicap their browser so you can't get new runtimes or deploy software via alternate means. Good luck launching your media startup on iPhone without an app.
Now this. They're clearly trying to gobble up any interest in other apps and force them into the payment shackles.
This is a fucking monopoly! Please stop this, department of justice! Apple has undue power in computing! Every company has to go through them to reach 50% of consumers, and apple is extorting us!
Apple says you're welcome to go to consumers another way, and then they do this. Look at their actions.
Yesterday there was some discussion of "Project Bernanke", so-called "quantitative easing" for DoubleClick's AdX. One could see similarities.
Here, Apple is helping certain "preferred" iOS app developers win against other iOS app developers. Apple stands to profit, the preferred developers stand to profit, but not other developers (and possibly users who will never discover their apps).
There, Google was helping Google Ads users, i.e., "preferred" DoubleClick AdX auction participants, to win against other participants in AdX auctions. Google profits (and brags about it in its internal presentations), Google Ad users may profit, but not the users of Google Ad alternatives.
Big Tech wants to facilitate "winner-take-all" scenarios. Healthy competition and parity amongst competitors (for user attention) reduces the profitability of the "tech" company business model. Big Tech would rather that user attention only be focused on what is most popular, creating more desirability to advertise to that single audience. A "Top 20" mobile app list, or top of page 1 of SERPs.
Concentration of web traffic, 80/20, network effects, and so on. Winner-take-all. The most ideal conditions for selling apps or ad services. The issue is not that they are doing this, it is in how are they doing it. They run and control the so-called "platforms" for advertising and sales and use that privileged position to manipulate outcomes that favour themselves. (And stifle competitors.)
Exactly and the crux is how can you prove the download would happen regardless of the ad put out by apple . This is an attribution problem on the ad space and nobody has solved it yet. Google has been trying to push complex attribution rules but they are not in a position to do it because they are insentized to attribute the sales to their own ads.
They key piece is that article claims Apple is doing this so that they can get their 30% transaction fees.
If customer pays on the app developers website, Apple is not getting cut. If customer downloads the app and makes payment there, Apple gets their money.
I see. So to a end-user it may not make much difference whether they sign up via the web site or app, but if Apple can get in-between, they can cleave 30% of the user’s lifetime revenue. Hiding email, credit card info already entered, subscription management,… there are reasons to want to run everything through Apple, but it’s interesting to see this behind the scenes as it can really change Apple’s incentives.
Yes but the ads placed by Apple points to respective apps on Apple app store. So the logic here is that user will most likely subscribe via the app on iPhone and then Apple gets it 30% cut.
It might be legal etc... and app developers and companies seem to have signed away basically control of their app distribution, tradmarks and promotions to Apple the the small letters. But all the same it seems to be a bit sleezy and low for Apple to try and get money by spoofing other companies and brands in fake ads.
I get why Google doesnt, care, since Ads is their core business. But does Apple which already makes oceans of cash need to go this low for that little bit of extra $$$
Ruthless move by Apple - but brands like HBO should just take Netflix's queue and not allow in-app purchases.
I was actually surprised to learn some of the app native brands mentioned (Tinder, Bumble) even had a way to sign-up for a subscription outside of the app. Seems like they would actually benefit from apple placing adds.
Which is why I see this will be a non-issue if on Dec 9th the anti-steering goes away. Then Apple places ad->user downloads->app says “hey it’s cheaper on tinder’s website”->user decides for themselves
That is making the assumption that steering means the developer doesn't have to pay a commission.
There was nothing in the court ruling preventing Apple from amending their developer contracts to put such a condition on steering for non-reader apps.
It never ceases to amaze me how much Apple is willing to trash its reputation just for some pocket money. I can't imagine this or the App Store ads to actually make that much money, and both make Apple look terrible.
Most of Apples' worst excesses seem to be around the management of the app store. Even Tim Cook expressed frustration at the lack of leadership in that department. I don't think this is representative of Apple as a whole. Although the company must accept full responsibility for even their lowest common denominator.
Just outbid Apple by paying Google 24% of your gross income, likely >50% of your profit (assuming Apple has 6% payment processing/gift card and bandwidth costs; from the Epic trial we know Google has 6% costs).
Apple's cost is probably significantly less here as it is a small app and most of the bandwidth is in the streaming, which Apple doesn't help with.
I think the problem is that some big corporations are allowed to avoid paying tax, essentially getting huge competitive advantage over SMEs.
The anomalous capital they were able to amass further enables them to corrupt governments to ensure regulatory capture and that any investigations in their tax affairs get dropped.
can you explain to me this attitude, which i see a lot? Obviously the entire reason for a companys' existence is to make money why should we expect anything else? Also this is true for every company in history. Of course we must demand companies meet minimum moral standards such as not using slaves (which would be unthinkable today in 2021 cough) but those must be imposed on them by law. This is a genuine question please feel free to enthusiastically disagree with me and explain why i'm wrong.
[Edit: I should clarify that i meant that a company needs no other reason to exist, not that a ethical company is impossible]
"Obviously the entire reason for a companys' existence is to make money"
That is not actually true. Corporations are a tradeoff for society: a corporation fulfills some societal need in exchange for investors receiving limited liability and a chance to profit. We have every right to question whether or not this arrangement is beneficial or harmful to society, and every so often a corporation will be broken up when society's needs are not being met.
Don't think that profit, limited liability, or anything about the current arrangement is a given or a natural right or anything like that. It is a system we use to accomplish certain shared goals, nothing more.
Companies are legal fictions of the state, with privileges like limited liability. Therefore the state can impose requirements on how the same companies behave as well.
For example, a company could be made to serve the interests of employees rather than just shareholders. This can be done by, for example, requiring a certain percentage of the board of directors to be employee representatives.
This! I see so many people who seem to have forgotten that companies exist only to serve the people. When society is run to protect companies over the well being of the people, thay have lost their reason to exist in the first place.
On the flip side, I see numerous posts and comments on HN that blame companies for not behaving more ethical. This is complete nonsense to me; you can't expect companies to autoregulate when they are designed to follow only 2 things: laws and market.
Since as we know now we have little control over what the market wants, the real control is through regulation.
But the US has done a very poor job at selecting their politician leadership for a long time now.... that's where people who wants to do something needs to look at..
I think it's both reasonable and important to criticize companies for behaving unethically even when it's not illegal. At the end of the day the "company" itself is incapable of doing anything. Humans are the ones actually making these decisions and then actually carrying them out.
Unfortunately we don't and likely won't ever know who exactly did what. The best we can do is point at the company as a whole and say that some people over there decided to do bad things, nobody else in that group stopped them, and then some of those people went and did the bad thing. I don't see why that's not a reasonable critique when we cannot be more specific.
I think that it is also important to do so. The more we perpetuate the idea that companies can't be blamed for bad-but-not-illegal behavior the more we help enable people to make those sorts of decisions as part of a company. They can't be blamed personally - it was the best decision for the company and that's what companies do, you know?
We also help reduce negative feelings towards the companies when they do behave unethically. You can't actually blame them - they're a company after all, right? But this actually helps enable companies to get away with it. Negative public perceptions can impact the ability of a company to make money. I don't see why we should be trying to reduce this kind of influence.
I agree with you. I think it is perfectly healthy to criticize companies and even boycott their products if we don't share their values. This is what I referred to by "controlling the market". Unfortunately this has historically provided very little results imo.
What I was referring to is the expectation that this criticism can make the difference; I don't think it can, for mostly one single reason: if you happen to make progress and magically turn 99% of the people running companies ethical, you have created a huge incentive for being evil. Someone acting unethical will reap the benefit without competitor.
I tend to see these dynamics as balances and movement from balances when something changes. I think changing laws changes the balance point and after a shake, the system will settle somewhere else. Trying to persuade managers to be ethical it's just a fight against the balance that you will eventually lose.
Public criticism does not change things only via boycott. I agree with you about boycotts and their at-best questionable usefulness.
The more meaningful aspects are the fact it creates a negative reputation, and that reputation impacts all interactions with the company. A bad reputation adds an additional cost to interacting with you (be it customers, workers, or business partners), and that needs to be constantly paid for somehow.
Additionally, there's some level of 'acceptableness' for the individuals of a company to do unethical things, which also plays a role. You addressed this in your 99% hypothetical, which I would agree with if it was done in a vacuum. However it's not. In practice if 1% of businesses were behaving in some way the rest refused on ethical grounds, lawmakers would be be falling over themselves to address it. Obviously such an example is unlikely to appear, but I hope you get my point. Moving the needle on acceptable behavior also moves the needle on what acceptable regulations of behavior.
I also largely agree on many of these factors being a dynamic balance. It's just that public criticism is already a factor in the current balance. Some level of criticism is required to maintain it, lest we move towards a balance that sees even more bad behavior.
> When society
is run to protect companies over the
well being of the people, thay have
lost their reason to exist in the first place.
According to you, seeing as almost every country in history was run exclusively for the benefit of the ruling class, none of them had a reason to exist?
> But the US has done a very poor job at
selecting their politician leadership for
a long time now.
Agreed. But i think it's a problem in the system itself. The us have a binary choice between hilary/biden and trump with no middle ground.
> According to you, seeing as almost every country in history was run exclusively for the benefit of the ruling class, none of them had a reason to exist?
Hmm... with "reason to exist" I meant the reason why they were "created" in the first place. This is an interesting article that expands on how corporation "rights" have changed since foundation (take the historical data points more than the underlying political bias): https://www.americanbar.org/groups/crsj/publications/human_r...
> Agreed. But i think it's a problem in the system itself. The us have a binary choice between hilary/biden and trump with no middle ground.
Indeed! I believe the problem in the system is even deeper. Regardless of your values or your preferred policies, I really feel hilary/biden/trump is a very poor display for the United States. The selection process that brought them there is not working. Smart people avoid going into politics in the first place because of this selection process. People don't want to spend their days arguing with a guy with bogus claim that is only trying to bring them down.
> Obviously the entire reason for a companys' existence is to make money why should we expect anything else?
The way this is supposed to work is that you make flour and I want flour so I give you money and you give me flour. Then you make more money by automating the production of flour so you can sell it to me for a lower price even though you now have higher margins. And try to take market share from competitors who are doing the same thing. The profit motive increases efficiency. This is growing the pie.
The nefarious way to make money is to swipe somebody else's piece. This is rent seeking. It causes prices to increase with no increase in value. It is to be destroyed.
Money corrupts everything, it replaces the original motivation.
If companies didn't have to maximize x% of the profit made on the investor's money per quarter/year, they will be able to focus on product/service, customer and employees more. It may result in less profit but it will be better for the society as a whole.
We can see this happening when some company is acquired solely for sucking money out of it. Sometimes it leads to worsening of the service/product made by original company, y% of employees get fired because new owners don't care about the product or the employees. Money saved by using cheaper but worse raw material and firing employees shows up as profit.
Because money is sole motivator, we end up over optimizing a company's operations around it. This could be seen everywhere when Covid started. Hospitals didn't have have back up PPEs. Auto makers didn't have parts/chips in inventory for emergencies. They're optimized to order the amount they need in immediate future, without any serious thought to contingency.
When an Amazon worker is asked to self x products across the warehouse in y minutes, like a machine without a thought to the well being of the worker, its because Amazon has to show profit to the investors.
We don't have product making companies anymore, we have stock making companies. They don't sell goods, services, they sell stocks.
To me original motivation is solving a problem and innovation. If you come up with an idea to create a service/product, you may be invested in the innovation in the beginning. But, as soon as you start making it using other people's money, it starts being less about the product.
Richard Feynman, explaining if "it" was worth the Nobel Prize.
"...I already got the prize. Prize is the pleasure of finding the thing out, kick in the discovery, the observation other people use it. Those are the real things..."
The problem with this sentiment is it's always presented as some new found discovery, and not as an inherent outcome of a capitalist economy. It was in 1973, 48 years ago now, that Ford did the infamous calculation on not to recall the Ford Pinto because the cost of recall was less than their calculated law suit risk - a move that would have killed their customers; and then further still Milton Friedman defended this decision.
We haven't had "product making companies" as the norm for at least 50 years now. What era are you talking about?
BS. One of the only things Ayn Rand got right was her view of money: it is one of the greatest forces for good humans have ever invented. Money allows us to settle our disputes without violence; money is what enables peaceful trade; money is how we moved beyond palace economies.
Sure, money can corrupt some things, but on the whole money has likely saved many lives and in all likelihood the free societies we have today could never have existed without a monetary system.
I agree with you to a certain extent, also I didn't mean to disregard the value that money provides by giving us a way to assign a quantifiable value to things. That's entirely different and in that way it can be counted as one of the greatest innovations in human history.
I was talking about the human greed that is exploited by money.
Also, if you're going to fight a war with another country, money doesn't mean much does it? Unless you have a global currency that both sides can agree on. Ultimately wars were fought for resources (Non ideological ones). Money is just paper/coins which you can print anytime you want if you control the resources.
Money is nothing but a sophisticated barter system. Instead of “I will give you 3 apples from my tree for a dozen eggs from your hens”, there is an indirection through a standardized property - money. Now we can say my apples are worth 4 shekels each and your eggs are worth 1 shekel each, and we can still agree on the same transaction.
The difference (some would argue, improvement) is that shekels have a worth of their own, so can be stored against harder times, which may not have been possible with the goods they bought. Of course, that shekel value being variable over time, can equally lead to riches or ruin, and requires a more sophisticated treatment by perhaps insufficiently sophisticated participants; snakes and ladders.
In any event, societies existed well before this “money” thing came along, even free ones. High technology societies do need a money system, I think; for automated transactions to take place, there needs to be a standardized good-exchange valuation, but not all high-tech societies are free, and not all free societies are high-tech. Freedom seems orthogonal to money.
>Money is nothing but a sophisticated
barter system.
I think we are all in agreement there. But it has such sophistication and is so amazingly efficient that it has an intrinsic value as a mere concept. This is because it enables activities that would otherwise be impossible. A good analogy would be a computer program. This i think is where we differ. But i think it's obvious that money is more than "nothing"- after all it sustains the entire banking industry.
>The difference (some would argue,
improvement) is that shekels have a
worth of their own, so can be stored
against harder times
Again this isn't (and was never) the true reason for money. It was only a security against the money and helped people to visualise the concept better (i know i'm oversimplifying but i think that's the basic idea)
> Money is nothing but a sophisticated barter system.
Money is the core of a distributed optimisation system. How does society decide whether to fix a pothole, eat some oranges, advertise a game? The hugely complex chain of suppliers is balanced via money - every actor in the chain is optimising locally using profit as the objective function. Legal agreements are the mechanism to ensure the money flows for the correct goods/services, and society sets constraints (laws/regulations) to enforce goals that are not monetary.
The economics 101 narrative for how money was created is an extremely limited view.
Sure, but if it's 70% of the remaining smaller pie of violence, that's still an improvement. If money wasn't a thing, you wouldn't be like "Relationships cause 70% of violence. Relationships are the root of all evil"
"70% of the remaining smaller pie of violence, that's still an improvement."
What leads you to believe that the pie is smaller than it was without money? I have never seen any kind of statistics like "hunter gatherers had more wars". How you you even formulate the null hypothesis for this?
I'm not claiming that I can back up that statistic, just pointing out that the state of something being an issue in the status quo doesn't mean it couldn't have been a net advantage over what it replaced.
I fully agree that money is a serious problem, but I have come to the conclusion that the true source of violence in society is simply humans. Everything else is simply a medium or catalyst for violence.
> Obviously the entire reason for a companys' existence is to make money why should we expect anything else? Also this is true for every company in history.
In Elizabethan times, company charters (and the subsequent right to create and hoard profit) was granted by the queen as a reward for the company doing the work required by the state. Money was a secondary reason for a company's existence, their primary reason was to further the interests of the monarchy and by extension the country.
the entire reason for a companys' existence is to make money
This is incorrect. There are many reasons a company can exist other than to make money. The company I work for, for example, does not have making money as its primary goal.
There's nothing wrong with a company making money. The problem is people who believe that companies should only make money, or make all the money they can at whatever cost.
There are actually people on HN who think companies have some legal obligation (usually under the cliché of "shareholder maximization") to do anything to make money. This is false.
Companies are created by and for humans. They should work for humans.
None of this is written on a tablet handed down to us by God. Companies exist to serve society, not make money, and when the two are in conflict we have to do something. The government should step in to regulate when things go wrong, but go look at any recent tech hearing from US senators (seriously do it) - they are incredibly clueless. One of them was questioning Sundar Pichai about iPhones.
So if companies are happy to maximize profit with the only barrier being law, and the lawmakers are too clueless/slow to make effective laws quickly, what are we supposed to do?
In my view, it's bad because there's no end to the growth of a company's wealth, and thus power. Companies are treated as individuals when it's convenient for them, and not so when it's inconvenient. As companies gain more and more money, it becomes much easier to commit crimes and abuse their power to gain even more money and even more power, and yet, the likelihood of them being held accountable decreases. Comapnies can commit crimes that would land an individual in prison, and yet companies are usually at most fined in amounts much lower than the money they earned committing crimes. This creates serious problems in society, where companies are able and enabled to essentially act as sociopaths with limitless power.
It only becomes a problem when there’s no regulation, which is exactly what’s happening here. Apple has too much market power, and the government is doing nothing to regulate them. The only way Apple will stop doing evil and harmful things like this is if A) government steps in or B) Apple decides to stop trying to grow. B will never happen (it’s basically impossible for a publicly traded company)
The same is true for the other tech giants.
Either we need one big action (break them up), or a lot of small actions (force them to change specific business practices)
I wonder if this is similar to Uber Eats or Deliveroo getting people to sign up with the help of some particular restaurant's menu, where that restaurant might have its own ordering site. If people get used to using the aggregator the restaurant loses out on the cut.
Not secret, but still, they're taking the publisher's money, imagine if it was your service: if the users subscribe through your website, you get 100%, and if they subscribe through Apple, they pocket 30% and you get 70%.
Apple is relying on the subscribers' not knowing of this money grab...
They aren't forced to use Apple as a distribution channel, just like Lenovo could also not sell computers on Amazon or at BestBuy and they probably make a higher margin when they sell D2C as well.
It's a cold blooded move by Apple, but I don't think its "nefarious". I'm very much against their rent seeking with the app store though.
This more akin to Booking.com placing ads for hotels in an area. The hotel gets revenue and Booking.com gets commission, and sometime advertising recovery fees on top.
Developers of apps should be allowed to opt out of this, or really should be an opt in feature.
They get their 30% subscription fee. And they get to control the customer relationship. App publishers have a really shitty deal here.
Mobile computing would be so much better for competition if this had become a Microsoft / Google duopoly rather than have Steve Jobs with his perverse app store model. We'd have web downloadable apps and a better mobile web.
We now have a cartel for 50+% of American consumers. The cartel is so greedy that it's now placing ads to confuse and ensnare consumers even more.
This is monopolistic behavior all the way. Let's leverage our cash to make it more expensive to get customers, and force app publishers to sell their product through our channel. This needs to be stopped. Now.
Not even taking in account the rise of advertising for the app creators self, the loses you have from not being able to redirect to your own website, giving specific incentives that Apple doesn't allow etc etc etc.
So no, it's not just bashing, and that's the reason Apple does it secretly
I agree. When you have as much economic power as Apple does every move has some side effect. In this case they are actually doing something nefarious and the side effect is simply shifting app company profits to Apple.
I am curious how this plays out from an antitrust and insider trading point of view. Apple could potentially use it's massive marketing budgeting to "determine the winner" in a specific market, after buying some stock in said company, (or just having good business arrangement with them).
The FTC generally cares more about screwing the end buyer than screwing the app developer. So this probably won't end well for Apple, since it sounds like steering buyers to a more expensive option.
This isn't terrible since it's possible that many apps providers can't afford the ads. But i think it's unacceptable unless the app owner is given a choice, and a clear cut choice with obvious opt in and opt out buttons. Also, it wouldn't hurt to make it clear to the consumer that Apple is paying for the ad.
The impacted apps are “high value” - they make both sides a lot of money.
> Impacted businesses include major brands such as dating apps like Tinder, Plenty of Fish, and Bumble, media giant HBO, education and learning publisher Masterclass, and language learning service Babbel.
If the providers can't afford the ads, they can't afford to pay Apple a 30% commission. If, on the other hand, they can afford to pay Apple a 30% commission, then they can afford an ad spend up to 30% to direct potential subscribers to subscribe directly, avoiding the Apple commission.
Netflix decided they couldn't afford the 30% commission, so they don't offer subscriptions in-app. It's really as simple as that.
But i think it's unacceptable unless the app owner is given a choice, and a clear cut choice with obvious opt in and opt out buttons
Didn't some other tech company do this recently? Something like eBay or Etsy, where the company was promoting the items for sale, and then taking a cut of that sale? I seem to remember it because the sellers were mad that it was opt-out, rather than opt-in.
yes, but they aren't running these apps for small apps like that. The ads according to TFA, are for giants like Tinder, HBO Max etc. The little guy making < $1M would obviously appreciate the free publicity.
Could this be because the volume of searches and people that even open the App Store app daily is so low that now that ATT is in play advertisers aren’t spending as much on marketing for iOS apps?
If Apple were to make inclusion in this optional, then it would be viewed in a very different light, and there would still be plenty of developers interested in participating.
The fact Apple can afford to do this simply reminds us of the fact they can demand a 70-30 split (85-15 after 1 year) and deem themselves the exclusive payment provider. That's the controversial part, which is what this issue reduces to.
Whatever the "fair" revenue split is, once you accept it exists, it's a net positive for the developer that Apple is reinvesting to grow the pie.
If anyone's hurt by this, it's their smaller competitors who won't get the same love from Apple's ad arbitrage team.
> “The user experience is much worse,” a marketing executive from one company told me. “When you buy with the developer, they have a relationship with you ... when you buy from Apple: sorry, you’re Apple’s customer, not ours, and if you have a problem with a subscription … we can’t really help them.”
Now interview a real user of subscriptions instead of a brand marketing executive and ask them if the user experience is worse.
PS. Even when not confronted with such a piece, remember that Forbes is no longer the business journalism folks may have grown up with. For the past decade, it’s a blogging platform for independent contributors:
> Each contributor flies solo with his own blog. He is responsible for conceiving and creating the content, ensuring its accuracy and building an engaged, loyal readership. Forbes provides the technology and compensates some of the contributors, but otherwise, like all entrepreneurs, contributors are left to sink or swim on their own.
https://www.poynter.org/reporting-editing/2012/what-the-forb...