Apple is terminating its affiliate program for iOS and Mac apps, effective October 1. That move is seeing a backlash from developers – and could discourage press outlets from covering apps.
Full disclosure: CDM added affiliate links for apps in our Apps section, which is helmed by Ashley Elsdon. In fact, this is at the moment how CDM supports Ashley’s contributions to CDM; we simply migrated his affiliate program from his former site Palm Sounds to CDM, and had planned to further develop this in the future.
But it’s not just media who are concerned about the change. I’ve heard from several developers who have emphasized that the move will cost them, too. Those developers often include affiliate links on their own sites, thus taking a portion of Apple’s own royalties. The logic is simple: if you go get an app through the developer’s site itself, it’s really their site, not the Apple App Store, that is helping you find that app. By eliminating the affiliate program, the argument goes, Apple is essentially claiming marketing services as part of their 30% royalty share without doing anything.
Some examples from public comments on Twitter:
As a dev, had no idea about $ weighting of site app referral links vs ads. Apple should well know the value of the music app ecosystem to *them* & that it is already a very, very tough place for most indie devs. This change makes it yet harder for the ecosystem. #crazydecision
— intermorphic (@intermorphic) August 5, 2018
“What's getting overshadowed in the iTunes affiliate story is the app developers themselves.
We're driving traffic to the App Store from our own web sites, yet Apple now wants to take a full 30% from those sales, even though Apple isn't doing anything to market those sales.”
— David Lublin (@DavidLublin) August 3, 2018
(Intermorphic is the ground-breaking developer of interactive music tools that has worked with the likes of Brian Eno; David Lublin is a Mac developer and founder of Vidvox, creators of VDMX.)
This saga began effectively in 2017; Apple pledged to drop the commission rate from 7% to 2.5%, then, following a backlash, limited that change to In-App Purchases only.
The announcement from Apple is itself revealing:
With the launch of the new App Store on both iOS and macOS and their increased methods of app discovery, we will be removing apps from the affiliate program. … All other content types (music, movies, books, and TV) remain in the affiliate program.
[emphasis mine]
Forget 7% or 2.5% or 0%. The real story here is not just about affiliates, but about Apple’s intended avenue of discovery. That is, they want you to discover, learn about, and consume apps entirely on their platform. They’ve made moves to hire their own editorial staff. Effectively, they’re keeping resources inside Apple.
And that itself should be chilling. The Internet has transformed quickly in the face of dominance of a handful of corporations. And those corporations are all tightening their grip. In the phone market, two companies – Apple and Google – have an effective duopoly. In search, one company – Google. (One exception is the search recommendations provided by … Apple.) Online advertising is dominated by Google. Retail is dominated by Amazon. Social media is effectively now just Facebook (via Facebook, Instagram, and WhatsApp).
Long-time independent Apple publisher TidBITS has some tough words on the situation, from industry veteran Adam Engst. And you should listen to him, as Adam is very much in that “last man standing” category as we’ve watched independent technology media collapse.
Apple’s Termination of App Store Affiliate Payments Is Unnecessary, Mean-Spirited, and Harmful
I was going to say, it isn’t necessarily Apple’s obligation to keep us alive except … well, it absolutely is. Independent media contributed to the growth of Apple’s platforms, and now with iPhone device sales flattening, the massively wealthy corporation may actually be making a strategic error even as far as its own self interest.
But that aside, I think Adam says something here that’s bigger than app affiliate revenue or even Apple, rather reflecting on the state of the Internet:
Any media-savvy organization, whether it’s a multinational corporation or full-fledged government, can increasingly control public perception not just by manipulating social media but also by bringing content creation and dissemination in-house. It’s all about control in a media world that no longer has gatekeepers. Apple pulled out of Macworld Expo years ago because it could just as easily hold its own product release events, and now we’re seeing Apple do the same to industry publications by competing with them via App Store editorial.
And that’s really the issue. Whether Apple’s affiliate program makes sense either for Apple or for publishers, the message killing the program spells it out: Apple wants to be the editorial. And the companies I’ve mentioned (Google, Apple, Facebook, Amazon) in various ways want to be the Internet. Those of us not working for those companies are free to criticize. And we may have to face the reality that this changes the practicality of our businesses. That may or may not be an existential crisis, but it isn’t something to ignore and wish away.
Developers will have to consider this in their business plans, particularly as Apple charges them for advertising on top of the share of revenue they take as a royalty. (This is one reason, among others, pro audio developers have almost universally rejected the desktop App Store.)
And publishers face a choice about whether we can compete with Apple, or whether we should exit the business entirely.
That said, even if this sounds bleak for us on the independent side, consider: Apple can only be Apple. They can only be in the business of selling their devices and apps. But we can easily switch business in a way that ceases to contribute to their business. In the long run, that may be more Apple’s problem than our own.
I hope that Apple will still reconsider the decision in the face of feedback from developers and press. I certainly don’t consider this to be typical of the treatment of media relations, who in my experience do still value the media (ahem) as part of their job role. And whatever Apple decides, my personal bias remains: businesses work better together than they do apart.
Addendum: the competition
I realize I focused entirely in this story on Apple, which isn’t entirely fair.
It’s worth noting that Google has not ever had an affiliate program.
Who does? Microsoft does, with a 7% commission rate. That is available with generous rewards for apps, in-app purchases, and – crucially, given that they’re much bigger ticket items – Microsoft hardware.
Using the Microsoft Affiliate Program to earn additional 7% on Windows Store sales [2016 Microsoft developer post, but still relevant and a good overview of how this works]
Now, does that make the Microsoft platform better for the user or developer? That’s arguable, clearly. But what I think it may demonstrate is a difference in philosophy and strategic positioning. Google, for all their claims of “openness,” are first and foremost an advertising – and by extension, content – platform. Microsoft built value around an ecosystem and interoperability of businesses inside that ecosystem. What’s interesting about the Apple affiliate decision is, since there wasn’t any particular urgency to making the change, it suggests Apple is shifting their strategy to take more control over content around their platform and not just what gets delivered through the store.
When the affiliate decision is long since forgotten, that strategic shift may prove to have been meaningful.