We Need New App Gateway Rules for the Creator Economy to Thrive
Apple and Google need to be grateful, not greedy with their App taxes
Apple and Google have had a monopoly on in-app payments for too long. As subscriptions become more the norm of how the Creator Economy scales and how businesses make a living online, Apple and Google need to relax their duopoly.
It simply isn’t a fair interest with how things are currently run.
On Substack, they already take 10% and another 3% from Stripe, you cannot subscribe to a writer on Substack’s iOS app, since that would be another 30%. The Creator would barely get anything. Do you see what I mean?
Apple and Peloton developing new subscription ecosystem services are a sign of the advent of the Creator Economy.
While Apple takes 30%, on Android Google takes either 15% or 30% depending on a set of factors. Amid increasing global regulations over app stores and their commission structures, Google last week announced the launch of a pilot program designed to explore what it calls “user billing choice.”
The program will allow a small number of participating developers, starting with Spotify, to offer an additional third-party billing option next to Google Play’s own billing system in their apps. As podcasting and gaming become more popular, developers and creators both need to catch a break to create a more fair internet.
While Google already offers a similar system in South Korea following the arrival of new legislation requiring it, this will be the first time it will test the system in multiple worldwide markets. Apple and Google already make huge margin money on these fees, for Google that’s about $12 Billion a year.
Spotify said the pilot will roll out to all markets where Spotify Premium is available, which is 184 total markets worldwide.
“This pilot will help us to increase our understanding of whether and how user choice billing works for users in different countries and for developers of different sizes and categories,” said Sameer Samat, Google’s vice president of product management.
Apple and Google have just been beyond evil about this for years. Apple is set to be hit with another fine next week for not fully complying with an order to open its App Store to rival forms of payment for dating apps in the Netherlands, Dutch antitrust watchdog ACM told Reuters. They are skirting the rules in the EU and they don’t even care about wracking up the fines, which amount to little slaps on the wriest they barely feel.
For Google, meanwhile, the pilot is very much a defensive move on the company’s part. Like Apple, the company has spent significant time and resources lobbying against legislation like the Open App Markets Act, which was recently advanced by the Senate Judiciary Committee.
Should the bill become law as it stands, it would prevent app marketplace owners with more than 50 million users in the US from locking third-party developers into their payment systems. It would also empower and augment the Creator Economy outside of the grips of this terrible duopoly on apps that hurt developers and creators.
As the debut pilot partner, Spotify will introduce both their own billing system alongside Google Play’s own when the pilot goes live. Google did not say which other developers it has lined up for future tests. You can imagine when Substack makes an Android app, it would be a good candidate for such a test to make it viable for Creators to operate on its app. An app that doesn’t help you convert your audience into paying supporters isn’t that helpful to a starving artist’s bottom lines.
Spotify, of course, has also been one of the larger developers to push for regulatory changes to app stores’ existing billing systems and structure, having testified before Congress on the matter, joined lobbying groups, and backed app store legislation — including the Open Markets Act, which would require companies like Apple and Google to permit alternatives to existing app stores.
It’s just sick really on the American global internet with all of these duopolies from Ads and App Stores. For instance, If Apple's commissions were uniformly at 30%, it grossed $85.71 billion in App Store sales in 2021 at the highest, based on CNBC analysis. That’s a good portion of Apple’s total profits to be honest and total revenue, basically unregulated. That’s not an atmosphere where developers and creators can thrive on an open and free internet.
The Tyranny of Silicon Valley
While the change may seem minor, it could prove to be a major crack in the fortresses that Google -- and Apple -- have built around their massive mobile-app economies since laying the foundations for them more than a decade ago.
As the Creator Economy bridges to the Metaverse, it’s hoped the future of the internet will be more decentralized, empowering and about personal brands instead of a few centralized Silicon Valley companies calling all the shots. The Ad and App store duopolies held way too much power at the beginning of the internet.
Substack is a humble app, brand new and barely used, for writers to thrive as podcasters and musicians do on places like Spotify, a lot would have to change. The downloads of Substack’s iOS app have been disappointing to say the least, but it’s a start at least. Where else can you go to discover Newsletters on an app?
Substack is not on SmartNews, as far as I’m aware. There is the horrendous clickbait of Medium. The future of Subscriptions is clearly going to power the Creator Economy further, the success of digital media such as the New York Times, Financial Times, Wall Street Journal, Insider, the Guardian and Bloomberg is just the beginning.
Our Creativity Shouldn’t be Paying Real-Estate Fees and Rent Just for the Right to Exist
Even in a VR and video-first internet of the Metaverse, writers will continue to congregate, inspire, inform and entertain us as always. Demand for them might even be higher as bots proliferate the future of blogging and even social media enters its deepfakes era. True writers could become nearly an extinct species of the former greatness of the written word. A place like Substack could become absolutely precious.
Let’s hope by then Apple and Google will have been made to submit to a more equal internet. A place where developers and creators don’t pay taxes to platforms and monopolies. Our Creativity shouldn’t be paying real-estate just for the right to exist!
For the future of gaming, game-streamers, game developers and so many of us in the Creator Economy, it’s about new laws that protect our rights and our freedoms. The exact commission split of the Spotify deal with Google are a mystery for now, but it’s going to be more generous than the current 85%-15% split. The implications this could have for the broader mobile economy, much of which is powered by gaming, are massive.
Spotify has been pushing for this for years. Spotify, alongside Epic Games and Netflix, has been one of the most vocal opponents of the 30% app store cut on Android and iOS. It’s not just for entertainment giants like Netflix, Spotify or Epic though, it’s for the little guys that it really matters. Substack is pretty little in that regard. Creators on Substack are perhaps among the most fringe creators in the world, not counting those political idols active on Twitter or former journalists with generous $100k advances.
We the little creators in the Creator Economy don’t even have a voice. How many articles did I write on Medium or LinkedIn or Wordpress in my lifetime toiling away? At least 4-5 thousand. That’s a lot of hours to be paid pennies to the page. So that’s where I’m coming from.
Behind the Top lists of Substack, are writers you’ve never heard of will likely never read. Beyond the podcasts who make it, are hundreds of indie podcasts who will never have more than 100 listeners. Should the little guys be paying 15-30% of their profits to huge platforms and huge monopolies that make $Billions of dollars in app-store taxes that have no real justification?
Though it has directed much of its ire toward Apple, Spotify has still supported lobbying efforts, legislation and regulation in the U.S. and abroad that’s begun to chip away at both platforms’ once-rigid policies. Progress has been slow, but steady. Epic games and Spotify have made real headway, and if they win - it’s a win for the entire future of the Creator Economy.