From Apple announces App Store Small Business Program (emphasis mine):
Apple today announced an industry-leading new developer program to accelerate innovation and help small businesses and independent developers propel their businesses forward with the next generation of groundbreaking apps on the App Store. The new App Store Small Business Program will benefit the vast majority of developers who sell digital goods and services on the store, providing them with a reduced commission on paid apps and in-app purchases. Developers can qualify for the program and a reduced, 15 percent commission if they earned up to $1 million in proceeds during the previous calendar year.
This is certainly an improvement over the current state of affairs (where Apple takes 30% off the top from everybody¹). However, the revenue limit that Apple has set for this program seems pretty arbitrary and pretty low. A million dollars sure seems like a lot of money at first blush and I’m sure that’s why they chose it. Indeed, it certainly is a lot to a solo indie developer or a very small team. However, it is surely not a lot of money for a small business that employs more than a few people to build software.
A software company in the US with one million dollars in annual gross revenue would struggle to support 10-12 employees outside of major tech markets. In places like San Francisco, New York City, or Austin, it would be closer to 5-7 employees. That’s hardly a big business that is in a position to fork over another 15% of its revenue in platform taxes to a company worth some two trillion dollars ².
Apple should just cut their tax for everyone. Taking even a 15% cut from developers whose products create enormous value for iOS—and therefore Apple’s highly lucrative hardware products—is pretty egregious. I’m not sure a change this anemic is going to do much to tamp down the growing developer discontent Apple is confronting.
- Well, everybody who isn’t important enough to negotiate special terms. The “standard” 30% cut will now only apply to the App Store middle class: too successful for this new program, too small to negotiate a special deal.
- About $2,010,000,000,000 as I write this.