What you need to know
- The App Store Small Business Program will benefit 98% of developers.
- The program reduces the App Store fee from 30% to 15% for developers making less than $1 million per year.
Reported by AppFigures, Apple's App Store Small Business Program, which reduces the company's fees for businesses making less than $1 million a year to 15%, will benefit 98% of developers.
The report figured 98% by looking at how many developers make money on the App Store and comparing that to the revenue earned by each developer.
To understand the impact, we first have to look at how many developers can make money on the App Store. Using Explorer, we can see that of the 2 million apps available in the App Store right now, 376K are either a paid download, have in-app purchases, or monetize with subscriptions. Those apps belong to 124.5K developers. Of those developers, only a little under 2% earned more than $1,000,000 in 2019. Surprised? That means that roughly 98% of all developers that can make money in the App Store as of right now will qualify for the program, which opens in 2021 and keep more revenue in their pocket instantly.
Larger developers and apps like Google, Tinder, Disney, and Candy Crush are among those who earn more than $1 million from the App Store every year and will be ineligible for the program.
Google, Tinder, Bumble, Disney, Dropbox, and LinkedIn are some of the companies who got coal in their sock this year. What about games, you ask? That's pretty much everyone else who isn't qualifying for the new program. Lead by no other than the Candy Crush King, more than half of all $1M+ club members happen to be games. Next on the list, and with a large gap, are Health & Fitness, Social Networking, and Entertainment, followed by Photo & Video. Keep in mind, these numbers are for 2019. 2020 threw the store for a loop, increasing revenue for these categories by significant margins.
It also appears that there is a healthy distribution when looking at developers who earn over $1 million.
Developers making just under 1.5M account for roughly 39% of all developers that don't qualify. The smallest group—developers making more than $150M (just 1.5% of the $1M+ club)—is responsible for more 29% of the group's revenue. The next group over—those making between $50M and $150M—is responsible for another 24%. Even in the $1M+ club, only a handful of developers earn Apple (and themselves) the most revenue.
A handful of developers who make over $1 million a year, like Spotify and Epic, have fought back against the program, but it appears that Apple has made the vast majority of developers happy with the new program.
