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Apple cuts App Store commission in half for smaller devs

Apple has said that it is reducing the amount of commission it takes on transactions made via its App Store.

The standard 30% rate that Apple has taken from app purchases and in-app subscriptions has long been a point of contention in the TV industry, with Netflix being one of the first major players to remove the option to subscribe from within the app back in 2018.

The company said on Wednesday that it would reduce its take by half to 15% – but only for smaller apps and services.

Launching the App Store Small Business Program, any developer which earns less than US$1 million in annual sales per year from all of their apps will qualify for the reduced rate. Apple said that this will encompass the vast majority of iOS app developers and will launch on January 1, 2021.

Developers will be contacted in order to sign up for the scheme, rather than automatically enrolling them. The app makers within the programme will see Apple take a smaller chunk of their revenue, while the company also said that they will automatically be removed if they pass the US$1 million threshold during the year.

While major players will see no benefit from this announcement, the programme should help start-up streaming services to get off the ground on the App Store.

In a statement, Apple CEO Tim Cook said that “small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world.”

The CEO added that the App Store “has been an engine of economic growth” and that the scheme is being launched “to help small business owners write the next chapter of creativity and prosperity.”

Earlier this year, Apple reduced or cut its commission on Amazon Prime Video sign-ups and its in-app Prime Video purchases, alongside Altice One and Canal+. These are evidently extraordinary deals and would only be open to major media players.

Despite Apple showing a willingness to come to terms with large businesses, many still take umbrage with the ‘Apple Tax’, with Fortnite developer Epic Games taking the company to court in an ongoing lawsuit.

Tags: app store, Apple, iOS