Apple slashes affiliate commission rate on apps from 7 to 2.5%

Apple on Monday alerted members of its link affiliate program to a sharp reduction in their take from apps and in-app purchases, down from 7 percent to just 2.5.

The change will take effect May 1 around the world, Apple explained. The rate will stay at 7 percent for all other Apple media, including music, movies, books, and TV shows.

"We will also continue to pay affiliate commissions on Apple Music memberships so there are many ways to earn commissions with the program," the company noted.

It's not clear why Apple made the change other than to retain more profit from App Store sales. Under the program, websites — including AppleInsider — can claim a small percentage of the proceeds from linked apps without affecting how much developers earn.

The lower rate could impact the bottom line of small- to mid-sized websites, particularly those focused on app news and reviews. While in most cases a site will only earn a few cents per download even with the 7 percent rate, that can still translate into hundreds of dollars with enough readers.

In June 2016 Apple announced a switch to a new revenue model, through which it would take only 15 percent from App Store subscriptions instead of its normal 30 in the case of customers subscribed for over a year. It could be that the company is looking to shore up lost revenue.

Apple may also be less worried about attracting outside publicity, given the overall success of the iPhone and the App Store, and an improved review system introduced alongside iOS 10.3.

31 Comments

SpamSandwich 32917 comments · 19 Years

About 7 years ago

sog35 said:

Its time to charge Uber 0.5% of all sales on the app.

Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

While struggling app designers have to pay Apple 30% on every App sale.

That's not a completely unreasonable demand.

carnegie 1082 comments · 10 Years

Does anyone know whether the 7% (soon to be 2.5%) commission comes entirely out of Apple's share of App Store proceeds or comes out of developers' shares as well?

In other words, is Apple paying 23.3% of its 30% for these commissions while what developers get from App Store sales is unaffected? Or, is Apple paying 7% of its 30% while developers are paying 7% of their 70%?

I suspect it's the former. But if anyone knows for sure, I'd appreciate their sharing their knowledge of the situation.

sog35 said:

SpamSandwich said:

sog35 said:

Its time to charge Uber 0.5% of all sales on the app.

Its ridiculous that Uber gross BILLIONS in sales and yet pays Apple $0.

While struggling app designers have to pay Apple 30% on every App sale.

That's not a completely unreasonable demand.

It really isn't.

Apple can afford to play hardball. Uber can't. Not having Uber on the iPhone would be a minor inconvience for about 1% of the iPhone base. But Uber not having iOS customers would destroy 80% of their sales.

Frankly I'm shocked Cook has not played this card yet.

As long as he also did it to Lyft and any other cab-style services.

Mike Wuerthele 6901 comments · 8 Years

carnegie said:

Does anyone know whether the 7% (soon to be 2.5%) commission comes entirely out of Apple's share of App Store proceeds or comes out of developers' shares as well?

In other words, is Apple paying 23.3% of its 30% for these commissions while what developers get from App Store sales is unaffected? Or, is Apple paying 7% of its 30% while developers are paying 7% of their 70%?

I suspect it's the former. But if anyone knows for sure, I'd appreciate their sharing their knowledge of the situation.

It comes out of the 30%.

Related: It doesn't really affect us much at AI, but it potentially makes a hard situation of identifying garbage apps and discovering good ones worse, as there's no real way for places like TouchArcade and other focused venues to make a living anymore.

Mike Wuerthele said:

carnegie said:

Does anyone know whether the 7% (soon to be 2.5%) commission comes entirely out of Apple's share of App Store proceeds or comes out of developers' shares as well?

In other words, is Apple paying 23.3% of its 30% for these commissions while what developers get from App Store sales is unaffected? Or, is Apple paying 7% of its 30% while developers are paying 7% of their 70%?

I suspect it's the former. But if anyone knows for sure, I'd appreciate their sharing their knowledge of the situation.

It comes out of the 30%.
Related: It doesn't really affect us much at AI, but it potentially makes a hard situation of identifying garbage apps and discovering good ones worse, as there's no real way for places like TouchArcade and other focused venues to make a living anymore.

Judging by the panicked tweets coming from other sites, I take it quite a few were depending on app links for revenue.