Why Online Creators Are Mad at Apple’s Fees

This article is part of the On Tech Newsletter. Here is a collection Past columns,

People who draw crowds on YouTube, Tiktok, Instagram and other sites are increasingly asking their followers to pay for their support. We can do this for extra access like personal chats or newsletters of our favorite online personalities or for good vibes to support the online work we love.

And if there’s one thing that unites a lot of people trying to make money from paying fans, it’s the irritation on Apple.

You may know that some app makers are angry at the fees that Apple charges for some digital purchases in iPhone apps. If you buy extra life in a video game app or subscribe to a dating service on your iPhone, Apple collects as much as 30 cents for every dollar you spend.

But many people who earn money from their online work also pay these fees indirectly to Apple.

Here’s an example: Let’s say you like this cycling channel on YouTube and click into your iPhone’s YouTube app to subscribe for 5 per month. Your money is divided into three ways. Apple gets 1.50. YouTube charges 1.05. The cycling channel earns 2.45, or less than half of what you think you are paying.

Many Internet makers say that Apple Pal does not deserve as much of their earnings as they see the company’s negligible involvement in the relationship between creative online work and fans. And they say Apple’s fees – on top of sites like YouTube, Facebook and Twitter – are doing creative business, which is already difficult, even more difficult.

“It’s a ridiculous tax they’re taking for no reason,” said online personality Hank Green about Apple’s fees.

One Apple told me that a fee for a small minority of what people do in apps is a fair return for the company’s role in the Internet economy and for making it easier to pay for content from our phones. People are more confident in paying by credit card on Apple’s file than handing over account information to people on YouTube or Instagram.

He insisted that Apple does not take a cut when people pay for personality online from a web browser or when people use a virtual tip jar on an app like Twitch.

This week, On Tech is focusing on economics for online creators who are so good at entertaining or sharing information online that they make it a job. Tensions between the creators and Apple are likely to escalate only as fan payments become more prevalent, both in popular apps and from specialist subscription services such as Patrion, Onlife and Substack. (Fans and substakes just don’t have the apps. Patrion, the musicians for the people, the online personality and the podcast paying service, doesn’t charge Apple a fee from the producers.)

Apple’s fee green and other livelihoods may not be a big burden for other creators. But Jasmine Rice, co-founder of a service called Fanhouse for people to subscribe to video creators, said that for most people who are struggling to make money from their online work, paying Apple could be as much as a month’s rent or other expenses.

Fanhouse launched a public battle with Apple last year to force the company to change its fees for manufacturers. Rice told me that his company tried to persuade Apple to increase its commission Cut it from 10 percent commission The fanhouse that the fans pay collects from the creators instead of the full amount. Apple said no, Rice said and gave Fanhouse a six-month grace period to pay the full fee.

One of the things I’ve heard over and over again from these online professionals is that Apple is not only the creators’ earnings but also the way of promising ideas.

Lee Jin, an investor in Internet makers, said she had business ideas that could not get off the ground because Apple’s fees undermined its profitability.

“There are so many mouths to feed, and the reduction in revenue in the app is really, really much more,” Gin said. (She wrote more about this topic last year.)

If Apple doesn’t help make smartphones the most popular computer in history, the Internet economy and revenue potential for creators will be very low. But now we are seeing the established norms and financial systems in the early days of digital life that hold back the 2022 Internet.

Tomorrow in On Tech: How an Online Personality Makes Money from Digital Work Differently.

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