Patreon today said Apple will soon take a 30 percent cut of new subscriptions bought via its iOS app.

This is because, according to Patreon, the app maker is being strong-armed by Apple into dropping third-party billing options from its iOS application, and instead must use the iPhone giant's own in-app purchasing system. It's either do what Cupertino says, or risk having the software booted out of the iOS App Store, we're told.

Patreon provides a way for fans to subscribe to artists, podcasters, and other creative types, thus financially supporting those creators with monthly payments. The plans, in terms of the cost and what you get in return, are defined by the content creators.

"Apple has their own payment system called In-app Purchases and they are requiring that Patreon use their payment system in-app purchases instead of our payment and billing systems in the Patreon app starting in November of this year," explained Patreon CEO Jack Conte in
a video. "If we don't do this, Apple might kick us out of the app store which would be terrible for creators and terrible for Patreon because iOS is actually now the most used platform for communities on Patreon."

Apple told Patreon last year that it had to comply with iOS platform rules, which includes the requirement to use Apple's billing system, and in January 2024 the app began charging a 30 percent fee for digital products sold through the Patreon iOS app.

Starting in November 2024, Apple is extending its 30 percent fee to apply to subscriptions through the Patreon iOS app.

The result is that for new subscriptions (but not existing ones), artists utilizing Patreon through its iOS app will have to increase their membership prices to absorb Apple's 30 percent commission or accept reduced income.

So a $10 monthly subscription transaction using the Patreon website or its Android app, which would bring in $8.61 after Patreon's current 8 percent platform fee and 2.9 percent plus 0.30 payment processing fee, would net just $6.20 if the customer used an iOS device and the creator receiving the funds paid Apple's commission.

Under this scenario, Apple's fee of $3.00, which includes payment processing, is almost four times more than Patron's $0.80 platform fee.

To avoid this, Patreon has created a widget that allows creators to increase the price of subscriptions only in the iOS app to offset Apple's fee, a service already available for digital goods sold through the iOS app. Thus a $10 monthly subscription could be set to have a $14.50 list price in the iOS app to cover Apple's cut.

In this scenario, Apple is collecting $4.35 while Patreon is getting $1.16, per month.

The change in November will also bring an end to two alternative forms of billing - First-of-the-month billing and Per-creation billing. Apple will only support subscription billing, which recurs a month after the initial subscription date.

While this is what most of those offering subscriptions currently use, according to the app developer, those still relying on alternative billing models (eg, those who create content on an irregular schedule) won't be able to add new members in the iOS app from November onward until they adopt subscription billing.

Pateron said it will be helping creators make the transition through November 2025.

Apple did not respond to a request for comment.

In a post to Mastodon, Casey Liss, an iOS developer and podcaster, wrote, "This is so gross. When is Apple going to realize that rent-seeking anywhere and everywhere is not only a bad look, but will get them regulated straight to hell? (And at this point, it's more than deserved. Bring it on.)"

Governments around the world are already bringing it on, though without much to show for it so far. Apple was sued by the US Department of Justice in March for alleged anticompetitive behavior. Among various claims, the DOJ's complaint accuses Apple of using contractual terms to force app makers to pay fees while denying competitive alternatives.

The court filing says, "Apple’s smartphone business model, at its core, is one that invites as many participants, including iPhone users and third-party developers, to join its platform as possible while using contractual terms to force these participants to pay substantial fees. At the same time, Apple restricts its platform participants’ ability to negotiate or compete down its fees through alternative app stores, in-app payment processors, and more."

And last week, Apple presented a new plan for complying with Europe's competition-focused Digital Markets Act after its initial gambit failed to satisfy. The iBiz has also had to accommodate app store competition in Japan and third-party payment options in South Korea. ®

https://www.theregister.com//2024/08/12/patreon_apple_ios/