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Execs talked not 'leaving money on the table' when setting App Store fee

App Store
App Store (Image credit: iMore)

What you need to know

  • Emails from the Epic v. Apple case showcase Apple executive discussions on App Store fees.

As reported by The Verge, emails unveiled in the Epic Games v. Apple lawsuit bring to light the company's internal feelings on why it takes a 30% cut on App Store transactions. While the fee is standard practice across all App Stores, it also benefited Apple from "leaving money on the table."

The emails date back to a 2011 discussion, which included Apple software and services leader Eddy Cue, around how Apple would handle subscription video applications on the Apple TV — an important conversation, given the rise in popularity of streaming services. And while the discussion doesn't offer much insight on Apple's existing 30 percent fee for the App Store, it does reveal how malleable those rules were when it came to maximizing profit.

App Store icon

App Store icon (Image credit: iMore)

Discussions around subscription fees for video applications on the Apple TV eventually landed on sticking to the 30% cut that currently existed on the iTunes and App Store. One executive said that, while they wanted to remain open to other deal structures, they wanted to ensure to protect the 30% fee that had long been the standard in the App Store.

One point of concern for Apple was structuring the new fees in such a way that they didn't undermine the payment structure it set on the App Store. "I don't want to do any deals where we get less than 30%. That is what it is on the app store and we can't be making a different deal here. If that is not possible than I want a one-time bounty but we need to very careful here so this doesn't spillover to the app store," one exec wrote. (The emails are threaded such that it's hard to tell who is replying to whom.)

Back in November 2020, Apple launched the App Store Small Business Program, which cut its App Store fee from 30% 15% for the first time. The program is available to any developer making less than $1 million per year in revenue on the App Store, which Apple says will cover 98% of developers.

Joe Wituschek
Joe Wituschek

Joe Wituschek is a Contributor at iMore. With over ten years in the technology industry, one of them being at Apple, Joe now covers the company for the website. In addition to covering breaking news, Joe also writes editorials and reviews for a range of products. He fell in love with Apple products when he got an iPod nano for Christmas almost twenty years ago. Despite being considered a "heavy" user, he has always preferred the consumer-focused products like the MacBook Air, iPad mini, and iPhone 13 mini. He will fight to the death to keep a mini iPhone in the lineup. In his free time, Joe enjoys video games, movies, photography, running, and basically everything outdoors.

1 Comment
  • Very interesting story. Back when this was done, there was really no precedent for this sort of service. People got software over the internet from the vendor, (or scammer, hacker) and just installed it. Creating a curated store was fairly new (not brand new), and the only thing to base it on was retail. Guarantee developers wouldn't want the cut manufacturers of hard goods get in retail. Just like software cost is hard to understand sometimes because you can't really see what you get, and many have no concept of what it takes to develop and maintain it, so do stores suffer from a lack of understanding of what it takes to support one. Right now we are the point that the developer, having made a fortune, partially because of the efforts of the store owner, wants a bigger fortune, and the store owner, having made a fortune, partially because of the quality of the merchandise, doesn't want a smaller fortune. I think the only winners here will be the lawyers.