the closed gardens of mobile app stores don't have the regular healthy market competition that normal payment processors do. it's one of my least favourite parts of building for mobile
I'm just questioning the point in offering a "deal" like this to Spotify, when Spotify can just handle their own payments for less. Is those 4% really worth that much to Google that it's outways the risk of others being made aware of how little payments actually cost Google to run.
Now that Netflix knows that Spotify pay 4%, why would they ever agree to anything more?
This clearly wasn't intended to get out, and predicting that Epic would file suit and then it would leak out of the court would be a hard reason to argue against trying to negotiate business in the moment.
I don't think you understand that over at Apple, not paying the 30% is not being on iPhone..period. Not being on the play store is not being on Android for 90% of customers. This is why both are facing major antitrust cases.
That is simply not true.
You can easily set account creation and payment on your website for "reader apps" if you're not willing to share 30/15% with Apple. (and Spotify & Netflix qualify as reader apps). Apple even allows you to put a link to your website for account creation right in the app (they didn't allow that in the past).
Many companies (like Google) move Apple's subscription fee to end users, so don't feel too pity about them. Just compare YouTube premium cost as an in-app purchase and on the website. €15.99 vs €11.99 here in Ireland.
Google had a choice not to offer the YouTube subscription as IAP and just link people to the website. But the conversion rate for IAP is way higher compared to the website link, so they just punish their users, who pay €4 extra every month.
Reader apps are an extremely specific clause, mostly related to their Ebook price fixing lawsuit. Zero of the apps in discussion here are reader apps.
I should also note, that up until recently, Apple specifically had clauses that you couldn't have the link to the website bit AND they had a 'you can't pass the price onto customers' rule.
Reader apps is quite wide category. It includes pretty much all types of content - ebooks, videos, audio etc. Spotify and Netflix falls under it afaik.
I have no idea what world you think you live in..but Apple has pretty clearly defined it mostly as Email and Ebook reading. Zero music or video services have ever gotten an exception. Spotify and Netflix have different exceptions called 'backroom deals' that allow them to have an unfair advantage over smaller players.
Aaah, okay, I was under the impression that you could actually be present on the Play Store as a subscription service and just handle your own payments and that would be perfectly acceptable.
But that makes the deal even weirder, Spotify doesn't have a choice, yet they have a completely insane deal.
While you may have a point about competition, comparing credit card processors and app stores solely on fee structure doesn’t make for an honest comparison because you get to ignore all the other things they do.
Normal payment processors don’t need to maintain the os ecosystem. Arguably Google needs to do the same work as a traditional payment processor AND much more.
> Arguably Google needs to do the same work as a traditional payment processor
Unarguably, they don't need to do that. They want to, because a monopoly on payment processing makes a lot of money.
If 4%/15%/30%/whatever is what Google needs to charge to run their payment processing business, that shows that they're extremely inefficient/incompetent, and the market would be more efficient if other companies were able to offer that service instead. Last I checked, Stripe charges 2.9%, which is even less than what Google charges Spotify in this unicorn deal.
EDIT: the same goes for "store infrastructure" or whatever. If Google offered publishers the option to run their own infrastructure for distributing apps/updates/whatever, everyone would take that deal rather than pay Google's nonsense fees.
Even 2.9% (which is what card payment processors charge as well) is ludicrously high. They make a very, very healthy profit margin with that. One of my greatest disappointments about cryptocurrencies is that they didn't destroy that ridiculousness.
The money largely funds consumer protection products such as when chargebacks have to be executed on fraudulent or other disputed transactions on your card. Zero liability guarantees that the card network infrastructure offers consumers come at a cost which is found here. Think of it as an insurance policy paid on every transaction which explains why it has to be a %.
Crypto offers no protections so no fees need to be taken.
Characterizing app store fees as purely for payment processing is so disingenuous it's hard to even engage.
The reality is these fees are for access to an audience. Google spends a lot of money developing Android and creating a storefront that huge numbers of people see every day.
Casting that as "payment processing fees" is like complaining it's outrageous for a farmer's market to charge $200/day for a 10x10 booth because 100sf of parking lot can be had for $10/day somewhere else: you have to willfully misunderstand the business for the argument to make any sense.
> The reality is these fees are for access to an audience.
This is called a monopoly rent and is the sort of thing antitrust law is intended to prevent, when it's working properly.
> Google spends a lot of money developing Android and creating a storefront that huge numbers of people see every day.
Google gives Android away for free. They choose to do that, and if they didn't then it would lose to a competitor that did, because operating systems are a classic example of somewhere that free software works in the absence of anti-competitive behavior. If Google didn't develop Android then Samsung and Amazon and Canonical and Mozilla would do it, and parts of it would be more like Debian, which would be better.
> Casting that as "payment processing fees" is like complaining it's outrageous for a farmer's market to charge $200/day for a 10x10 booth because 100sf of parking lot can be had for $10/day somewhere else: you have to willfully misunderstand the business for the argument to make any sense.
Does the farmer's market also take actions to interfere with you being able to build your own storefront?
I wasn't trying to say that those fees are only for payment processing.
Anyways, to your point about audience: That's BS. The reason Google Play is the dominant store definitely has a lot to do with that, because nobody is going to publish on "My Awesome Android Store" if it doesn't have users. However, the reason they have that audience is because of their anticompetitive tactics. It's all a cycle that feeds into itself, and it's how they're able to become the only game in town and charge literally whatever they want.
Epic has the ability and resources to potentially build a store with enough of an audience to attract more developers and compete with Google Play, but it won't happen as long as Google is allowed to continue acting anti-competitively.
I'm not GP, but that's a really good point and one to keep in mind.
I suppose the question is, did the farmers market threaten all the other land owners if they allowed a competing farmers market to open up? Or throw metaphorical wrenches in the way to a competitor?
Google's exclusivity agreement makes it much harder for alternatives to emerge. Even with this though, I get that they are funding open source development and need to protect it somehow lest it be stolen (cough by Amazon cough) and made a competing platform. I'm quite unsure where the balance should be.
App stores, like payment processors, have economies of scale in the sense that you need a critical mass of users to sign up for them and trust them with their payment info, so you're not going to have a thousand of them, but you could certainly have a dozen. At which point they would have to compete on things like fees and keep each other in check.
But not if each platform has only a single dominant payment processor.
Unless I'm mistaken, Google has made threats, such as "if you include a competing app store, then you don't get any of the google apps, google play services, etc, and you can't use the Android trademark.
We saw in the early 00s a proliferation of "Android" devices that didn't have the Play store, and they were mostly DOA
An unwillingness to co-operate is not generally considered a threat.
> and they were mostly DOA
Maybe those stores should have invested a few dozen billion dollars in building up a comprehensive first-party app ecosystem that made them attractive to users.
Economies of scale, and all. Nobody's going to your farmer's market, because everyone's going to the mall that has a Walmart.
Your comment doesn't deserve the downvotes (which are supposed to be about whether a comment is good/substantive, not the reactionary "I disagree with this" that it's become) so I upvoted it to balance.
You are of course right that there is more work involved beyond a traditional payment processor. However, 30% of everything?? Even the standard 3% that payment processors take is ridiclously high. It's rent-seeking all around.
So, uh... I hate to break it to you, but payment processing is almost as monopolized as mobile app stores are. The fees are not as egregiously high as 30%, but they are still supracompetitive and eat up retailer margins. Payment processing even has similar censorship problems, as evidenced by the campaigns to defund porn companies by cutting them off of payment networks.
