Under the Radar

198: Store Wars


00:00:00   Welcome to Under the Radar, a show about independent iOS app development.

00:00:04   I'm Marco Arment.

00:00:06   And I'm David Smith. Under the Radar is never longer than 30 minutes, so let's get started.

00:00:10   So as we are recording this, the Apple developer community is in the middle of another one of its sort of,

00:00:17   I feel like it goes through these cycles of drama.

00:00:20   And that's been the case for more than a decade that I've been an Apple developer,

00:00:25   that there's always some kind of drama du jour.

00:00:29   And we are currently in the middle of what seems like a fairly substantial drama.

00:00:33   Like this is the, we've kind of, if you go from, you know, the dramas can base from like the high school production to,

00:00:40   you know, maybe the community theater, like this is now like the Globe Theater Shakespearean drama.

00:00:45   Like we are full on two giant titans of industry, like fighting each other over huge sums of money and lots of things.

00:00:53   And specifically I'm talking about Epic and Epic Games and the kind of big drama they've been doing with Apple,

00:01:00   where they created, they sort of snuck an update into Fortnite that introduced non-in-app purchasing,

00:01:08   and then they turned it on, and then Apple removed it from the store, and then they released a video about that,

00:01:15   and filed a lawsuit, and then Apple is threatening to remove them, their developer account,

00:01:21   because they're in violation of the developer agreement.

00:01:24   And I mean the ins and outs of it aren't particularly interesting, I think, for the purposes of our discussion.

00:01:30   Like, I mean, this is, you know, we're a show about independent app development.

00:01:33   Like, as interesting as it is, as a follower of Apple, and a follower of Apple News,

00:01:39   and just like from a, and obviously it's like, for you, you know, it's like for ATP,

00:01:43   and it's kind of discussions, this is like prime grist for that mill.

00:01:46   But I think for us, and for the purposes of our discussion, what I thought would be interesting

00:01:50   is to just start off at least by talking about it from a perspective of like,

00:01:54   does this impact us, does this matter, is this something that as a developer we should be worried about,

00:02:00   concerned about, take action based on, etc.

00:02:03   And I think that is probably, you know, ultimately the more constructive thing,

00:02:08   because as much as I enjoy, you know, just from a, it's like, in many ways this is like,

00:02:15   you know, some interesting thing is happening to like my favorite sports team or whatever,

00:02:18   like seeing this happen is certainly like, there's an interesting, an interest factor to it,

00:02:22   though I certainly prefer it if it wasn't happening, but it certainly is interest.

00:02:26   But as a developer, it's, I'm of two minds about it, because I think on the one hand,

00:02:31   they're arguing and fighting about things that I don't think, you know, it's like,

00:02:37   in the short term, don't really affect what I'm aiming to do.

00:02:41   Like, if Apple was at some point allowing additional payment methods,

00:02:46   I personally don't think I have any interest in using them.

00:02:49   I would expect to continue to use In-App Purchase for the foreseeable future,

00:02:53   because for me and the, you know, the apps I make and the way that I make them,

00:02:57   most of the benefit that I'm getting is, you know, Apple provides a tremendous benefit

00:03:01   in terms of ease of use, in terms of integration with the platform,

00:03:05   and they are taking care of a lot of things that I then don't need to,

00:03:09   and so I can just focus on making my apps, focus on making my user experience as good as I can,

00:03:14   and don't have to think too much about that kind of thing.

00:03:17   And while there might potentially be an advantage if I, you know, say Stripe,

00:03:22   you know, subscriptions for something that I could use, like, I would consider it,

00:03:26   but I suspect more likely than not, I would just stick with the built-in thing

00:03:30   because of the kind of network effects of having it there.

00:03:35   But at the same time, like, I do also, this kind of thing does make me worried

00:03:39   about the future of the App Store and the future of, you know, this environment

00:03:44   where I've found my own, you know, I've been able to kind of carve out my little niche,

00:03:48   and I can, you know, hang out here, and I can, you know, make just enough noise

00:03:53   to make a living and to have a sustainable business,

00:03:58   but I have no interest in becoming so large or so kind of visible that, you know,

00:04:05   it disturbs the sort of, the calm sustainability of what I have.

00:04:09   It's like, I have my, it's sort of in some ways, it's like, I've been able to find myself

00:04:12   this teeny little lake up in the mountains, and I can just hang out there, and it's great.

00:04:15   And like, I don't really want my little lake to become part of the, you know,

00:04:19   part of this big ocean or this big river. Like, I just enjoy this little place that I have.

00:04:22   And maybe that's short-sighted, but when I see things that potentially are going to come

00:04:27   and upset that, it worries me. Like, when I see the, you know, sort of discussion

00:04:32   or movement around, like, additional app stores and what that might mean,

00:04:37   or sideloading on iOS, like, it worries me, because things like a big part,

00:04:42   or at least, certainly in the early days, and I think continuing to this date,

00:04:47   like, one of the big advantages of iOS as a platform is the general sense

00:04:52   that customers have of safety, of security, of the fact that if you get an,

00:04:57   if you download an app from the app store and it does weird stuff, you just delete it,

00:05:01   and like, all of it's gone. And all of its little tendrils are gone, and it,

00:05:06   it's like, you don't have to worry about it. And I think that is just a tremendous benefit

00:05:11   that if you start to, like, as soon as that's not 100% true,

00:05:16   in many ways it becomes, like, not true at all. And while, you know, if you allowed sideloading,

00:05:22   and that is usually not, you know, not a thing most people use, it's like, sure,

00:05:26   but now it's complicated, and it's different, and I'm not sure I really want that complication.

00:05:31   So, like, I don't know, I've gone back and forth about this a lot over the last, sort of, week

00:05:36   since this all kind of started to unravel about what I thought, and it's like, in the end,

00:05:40   I just hope that it gets resolved amicably, and we can kind of keep going as we are,

00:05:45   because I like that thing, and like, broadly, I kind of agree with Apple, and

00:05:50   I think that's probably an unusual opinion, it seems, like, based on the, certainly the,

00:05:55   those who are vocal about, on this topic, but it's like, generally I agree with them, and I kind of like

00:05:59   their stewardship of the App Store, and their ability to make choices, and I don't always agree with them

00:06:05   in detail, but I certainly, sort of, by and large, definitely agree with them in the broad strokes.

00:06:12   Yeah, I think among our community, and Apple commentary, and fans, and everything, we see a broad

00:06:18   variety of what people want here, what do people want to happen, what is their ideal outcome.

00:06:24   We have many people who want the idea of sideloading, and alternative App Stores to be permitted,

00:06:30   we have many people who are okay with the App Store still being the only way to distribute apps,

00:06:35   but having relaxed rules around in-app payment systems, and I'm in that camp, by the way,

00:06:41   and then we have people who want everything to stay exactly the way it is, and say, Apple deserves

00:06:45   everything they got, and, you know, and they deserve 30%, and it's their platform, they can dictate whatever they want.

00:06:50   And I think, you know, from the point of view of, you know, what it means for our businesses,

00:06:58   and for developers like us, you can look at what existing stuff works, and you can think,

00:07:05   well, we want to keep that, alright, but then you can also look at what existing stuff doesn't work,

00:07:10   what is actually likely to happen here, and what isn't, and I think there's a huge potential

00:07:18   on iOS for lots of different kinds of apps that Apple currently does not permit, or makes too prohibitive.

00:07:25   Lots of different services, business models, app types, etc. And a lot of that is stuff that we don't want.

00:07:31   A lot of that is bordering on malware, or it's like kind of hacky stuff. The OS on a technical level

00:07:38   can prevent many of the problems of that, and if what you want is like a safe OS, where you don't have to worry

00:07:44   about actual malware, and what an app can do, or like, you know, apps that will infect your phone

00:07:50   and not be deletable fully, we don't need the App Store policy to do that. The OS does that on a technical level.

00:07:56   So there are certain technical walls in place that if you are trying to think about, like, well,

00:08:03   what if it turns into the Windows market? It won't, it can't, for technical reasons.

00:08:08   And I think also we have to realize, like, even if alternative app stores and sideloading were possible here,

00:08:16   first of all, that could be good for us. If you look at the Mac, you have the Mac App Store,

00:08:22   which, this is a different situation, because that was never the only way to get software on the Mac,

00:08:27   and it better not become the only way, but that was never the only way to get software on the Mac.

00:08:31   And it's not even the biggest way to get software on the Mac. As far as I know, I think most Mac software

00:08:36   is probably still sold outside of the App Store, at least much of it. And so there's a lot of inertia on the Mac

00:08:44   behind alternative methods. And you also have alternative app stores on the Mac.

00:08:50   One of the biggest ones is SetApp. And there have been a couple other ones over the years,

00:08:55   but I think SetApp is a good example here, because, and I know SetApp just launched something on iOS, sort of,

00:09:00   but that's for another day. You know, SetApp is an example where you can have alternative app stores on this platform,

00:09:06   the Mac, and it seems to be just fine. It's just another place for developers like us to distribute our apps.

00:09:14   And for some developers, you know, it doesn't make sense, it doesn't work out. For some developers, it does.

00:09:19   I know some developers who have apps there, and it's been fine for them, or even good.

00:09:25   Or at least it's been a small benefit if nothing else. And so we can see on the Mac, like, having alternative app stores

00:09:33   doesn't necessarily have to be a bad thing for developers or for users. It could be a good thing.

00:09:39   It isn't guaranteed to be a good thing, though, and it could introduce problems, like you said.

00:09:44   We enjoy a certain benefit on iOS that people are not really afraid to install apps, because they know that they can just install it.

00:09:54   It goes through Apple's system, it seems legit-ish, although I think the general quality of apps doesn't necessarily

00:10:03   lend as much legitimacy as we like to think in customer minds. But it seems sort of legit.

00:10:10   It at least seems that if you pay for an app, you will generally usually kind of get what you are paying for.

00:10:16   But then, you know, most apps aren't paid for. Most apps are downloaded for free, so even that level of legitimacy is less necessary.

00:10:23   The important part of what makes people comfortable downloading apps on iOS is that they know that it's not going to, you know,

00:10:29   infect their device with a virus, and that when they delete the app, it's really gone. All traces of it gone.

00:10:35   And again, that's a technical thing that can be applied to apps installed from any app store or from any sideloading method.

00:10:43   So I think most of the good stuff that we have now is not really under threat if other app stores were permitted.

00:10:52   Now, it could go a different way in a negative way for us, though, if other app stores become dominant.

00:10:59   You can imagine a situation where, suppose Epic gets their app store, and suppose this becomes allowed,

00:11:06   and then maybe there's Steam on iOS, and a lot of other game app stores make stores for iOS.

00:11:13   Well, if you're a game maker, do you then have to cooperate with all these other stores because they have so much market share on iOS

00:11:20   that you can't just not be in them to have a viable distribution platform?

00:11:25   That's not great for iOS game developers to have that mechanic in place, where there's one or more additional dominant app stores

00:11:35   that you have to also submit your app to, share your revenue with, etc., and cooperate with their rules and their platform,

00:11:42   which might be more onerous or have rules you don't want to comply with.

00:11:45   So we do have to be a little bit careful what we wish for here.

00:11:48   But I think a hybrid approach where other app stores aren't permitted, but sideloading is, I think would be fine,

00:12:01   and totally technically doable on the phone. Like, right now, apps don't have, at a technical level, not a policy level,

00:12:08   at a technical level, third-party apps don't have the ability to install additional apps. They can't do that.

00:12:14   They can be installed via sideloading via an enterprise certificate, an enterprise distribution.

00:12:20   So again, there's already even a sideloading system in place, and it's just not used very widely, really.

00:12:25   But they can be installed that way, but they can't themselves then install their apps.

00:12:29   So at a technical level, Apple could say, "Fine, sideloading can now be used by everybody,"

00:12:35   basically broadening the enterprise distribution system, and there's now no more policy against doing that.

00:12:41   But other app stores still aren't permitted, which wouldn't get Epic what they want, but it would actually, I think,

00:12:48   be fine for the platform as a whole. You would still possibly have other mechanisms for things like how you get

00:12:55   those enterprise distribution links. Maybe people have their own web storefronts or things. I don't know how that would work,

00:13:00   but it seems like it would be possible. But again, I wouldn't be concerned about that from our point of view,

00:13:04   for the most part, unless some other distribution channel becomes dominant.

00:13:08   So I think really what we're looking at is what happens with Apple's rules, and what do they allow,

00:13:15   and how does this lawsuit end up? Now, one way it could end up is Epic could realize they're going to lose

00:13:21   and just drop it, and it just disappears. And okay, nobody's really helped by that, or hurt too much by that.

00:13:28   It just kind of goes away. One way it can end is some kind of private settlement, where Epic gets the rules changed

00:13:37   just for them. And that's bad for everybody, I think. I see that. Suppose Epic negotiates with Apple,

00:13:44   and they have a 15% commission on all their purchases. Basically the same deal that Netflix has had,

00:13:52   Amazon got, all these deals, the whole thing where Apple says they treat all developers the same,

00:13:57   all those counter examples? Yeah, maybe we get another one of those here. So maybe Epic has their own private deal

00:14:03   with Apple where they pay a lower rate. I don't love that outcome at all. That to me is just like,

00:14:08   let's extend the hypocrisy further. And for smaller developers like us, that doesn't do anything for us.

00:14:12   Because we're never going to get that deal. So it's not really serving our interests if big companies pay lower rates

00:14:20   than we do. That's how the world works many times, but in reality we don't want that.

00:14:26   So if Apple actually changes rules in relation to this, or as an effect of this, or as a rule of this,

00:14:36   suppose they allow alternative payment methods for in-app purchases, which I think is probably the most likely

00:14:45   biggest win scenario here. I can see them giving up on that before I see them allowing sideloading.

00:14:51   So suppose they allow other in-app purchase systems. I agree with you. I probably wouldn't use it for my apps

00:14:59   as they stand today. But it would enable new ideas to be built that aren't buildable today.

00:15:06   Like I've talked many times in the past about how I had this idea where you'd pay overcast 20 bucks a month

00:15:11   and I'd split it up between the podcast you listen to that participated so you could pay podcasts directly.

00:15:16   And one of the biggest reasons I didn't do that, well first of all it turned out to be a terrible idea,

00:15:21   but a second reason I didn't do it is...

00:15:24   It's always a good reason to not do something, I guess, because it's a bad idea.

00:15:27   Yes, it's a bad idea on a number of fronts and nobody wants it. But besides those two very big reasons,

00:15:33   a third big reason I didn't do it is that Apple taking 30% of everybody's monthly payment really puts a damper

00:15:41   on that plan. It really makes it seem crappy. So Apple would take 30% and I figured for me to administer the program

00:15:47   I would need about 10% at least. So that's 40%! It's like almost half of what people are paying is just eaten up in fees

00:15:55   before it actually gets to the podcasters. It made it a really uncompelling offer.

00:16:01   And that's one of the many big reasons why I decided not to do this kind of thing.

00:16:06   But that kind of thing would become possible again. If you could do your own payment processing in the app,

00:16:12   and you could bring that commission rate down to like 3% the way it normally is with most direct payment processors

00:16:18   like Stripe, and you're usually paying about 3%. Then plans like that become significantly more feasible.

00:16:26   And so there are entire businesses that we are being held back from that we can't do right now.

00:16:32   You could also potentially see something involving potential additional flexibility around things like trials and upgrade pricing.

00:16:41   Things we've been asking for forever. Some of this would require additional policy changes that are probably unlikely to happen,

00:16:49   but we can dream. Down this path, if things are forced to change, there could be really great things for us to enable new business models

00:16:58   and to make our existing business models better or easier. And then also, think of all the hoops that users have to jump through now

00:17:07   for the user experience to be awful in the few apps like Netflix that have this "reader app exemption"

00:17:15   where they're allowed to have a separate payment system, they just can't ever mention it in the app.

00:17:18   Or how to create an account, who knows, go to our website, we can't tell you that.

00:17:22   If that rule became, if in-app purchase systems by other people became permissible, that rule would become moot.

00:17:29   And so you could imagine there would be a much better user experience to do a lot of things.

00:17:36   In your apps, you could have that one huge area of rejection risk gone.

00:17:41   So for instance, right now in Overcast, I sell ads that display in Overcast, the Visual Banner ads for podcasts.

00:17:46   I have to be very careful that I don't open up a web view anywhere in the app to my main website

00:17:55   that could potentially lead an app reviewer to click click click click and find the page where you buy the ads.

00:18:01   Although it's funny, Instagram offers those ads for direct purchase in their app. I don't know how they get away with that.

00:18:07   Maybe it's somehow exempted, maybe I can offer this by policy. I don't know, I haven't tried.

00:18:11   But I can't sell those ads in my app and I have to be very careful not to accidentally lead people down a path where they can find those ads in the app.

00:18:19   And that doesn't affect my business at all. The ads sell just fine without that.

00:18:22   But it would be better if I could sell them in the app. I would probably sell more of them, probably for higher rates.

00:18:27   So I would love to offer that kind of capability in the app. I'm not going to do it for 30%, but for 3% that I'm paying anyway?

00:18:36   Yeah, I'll do that, fine. So you can imagine, even for developers like us who aren't running these massive platforms where we'd have all of our customers inputting their credit cards, theoretically,

00:18:45   there is still a lot of reason to do this for us. And so I think the outcomes that could happen from this epic lawsuit, it will probably not result in anything that big, honestly.

00:18:58   I don't think this is going to have a good chance of affecting change that big, but it might. And we can at least say as indies, whatever fallout happens from this, it's either going to probably not affect us at all.

00:19:11   Or maybe it'll improve things in a way that might benefit us. And I think that's only a potential good.

00:19:17   Anyway, we are sponsored this week by AppFigures. Among app publishers and developers, AppFigures is already well known for the Universal Analytics dashboard.

00:19:26   But there's actually a lot more you can do with the platform. They also provide a complete set of App Store optimization tools, which is becoming more of a necessity.

00:19:35   I've actually personally been using AppFigures since 2010. I listed up this morning. 2010 is when I have been using AppFigures. And I used it first for Instapaper and for everything I've made since then.

00:19:45   And I've actually only recently started exploring all these other tools that they offer. Because they're great for things like your sales reports. Just seeing how are my apps doing, how are they ranking, how much money am I making, how much money am I spending in search ads.

00:20:00   They have all that integrated and it's wonderful. But there's a whole bunch more too. So if you want to do more, you aren't sure of next steps, they have a lot of great guides and resources to help with that.

00:20:10   They've also recently added the ability to see how your competitors are performing. So you can always know where you stand and what your competitors are doing to improve their bottom line.

00:20:19   Plus you get access to complementary guides and learning materials to take advantage of those tools. All of this comes at a reasonable price. There's never been a better time to check it out.

00:20:27   Head over to AppFigures.com to try AppFigures for free. If you like it, use our code RADAR3030 to get 30% off for the next three months. That's AppFigures.com and code RADAR3030 for a 30% discount for the next three months.

00:20:44   Our thanks to AppFigures for their support of this show.

00:20:48   Something that I always feel a bit stuck on though in all these discussions, and this is an argument that you just made, the spirit of the argument isn't right, but the premise feels a bit funny to me.

00:21:01   It's a bad user experience in the Netflix app right now, or in the Kindle app, or whatever. Those kinds of things where the reader exemption leads to a bad user experience.

00:21:13   It's this funny thing that comes to mind. It's just as much Amazon's choice that it's that user experience as it is Apple's.

00:21:23   What Apple is saying in the core of their offering is that if Amazon used the Apple in-app purchase system, that they would be allowed to do that.

00:21:37   I know specifically with books it gets complicated because of the way publishing royalties work, but generally speaking, if Netflix offered the subscription inside of the app, certainly Apple has a financial interest in doing that.

00:21:53   The place that I start is that Netflix doesn't have a right to be on the iPhone. Apple is the steward of their platform. They created it, they maintain it, they manage it, and they set the rules.

00:22:11   Any developer who wants to be part of that platform, who wants to do that, they're voluntarily entering into that agreement. We get our agreements in App Store Connect and we sign them, and we're agreeing to abide by Apple's rules.

00:22:27   Certainly, we can lobby for those rules to change, I suppose, but once you've agreed to those rules, then being upset or being feisty that you have to abide by them always feels a bit slightly disingenuous to me.

00:22:45   Netflix is confusing people because of this rule. They're choosing to do that, or Netflix could offer subscriptions inside of their app and be in full compliance and have an easy onboarding experience for those users.

00:23:03   It's a funny thing because the iPhone is certainly an essential part of so many people's life. Because of that, it becomes almost as though it's a utility.

00:23:17   It's something that, in the same way that you regulate and manage the water company or the electric company, there are special and different rules for something if you consider it to be a universal utility.

00:23:32   And certainly Apple would actively be pushing against that that's the case. Instead, they're creating a specific curated experience. Do they do that perfectly? They certainly don't. But that is their opportunity and their right to manage that store however we want.

00:23:51   It's funny because if I made a physical product and I sold it in Walmart, and I didn't like the cut that Walmart was giving me, and so I went into the Walmart and set up a little stall in the middle of the store and started selling it myself,

00:24:08   Walmart would be well within their rights to throw me out of their store. That would be an entirely reasonable and inappropriate thing to say, "No, you can't just come into our store and start selling your own things. That's not what we're doing here."

00:24:25   That feels perfectly reasonable in the physical world. For some reason, there's the nature of digital distribution, I suppose, because so many things are possible. It makes you start to feel that everything should be permissible as a result.

00:24:41   I very much come down into this place where I'm still tremendously grateful that Apple has this opportunity for developers. I feel grateful and privileged to be able to make a living by putting my apps into the App Store.

00:24:56   I don't take that for granted, that this is some right that's given to me. I am entitled to do that. Sometimes Apple has had rules and policies that I disagree with or that have hurt me in some ways. That's just part of the deal.

00:25:12   I do my best to instead focus on avoiding areas where Apple's interests and my interests might be in conflict. Instead, focus my area into things that Apple clearly has. If we both have aligned interests in something, like they have an interest in a technology or a platform or in an area,

00:25:31   and I put my energy and effort into that, time and time again, that energy has been rewarded. It has been sustainable. As a small business, I think that is the pragmatic and the best approach that I can recommend for people to take.

00:25:46   It's to focus instead on trying as best we can to align. From a lobbying and making noise on Twitter perspective, arguing for different things sounds great. But as a business perspective, I'm just going to continue doing as best I can to align myself with Apple, align myself with their interests.

00:26:08   I think that's ultimately going to be the best thing I can do for me and my business going forward. Who knows what's going to happen with Epic, but I think for me, that's what I'm going to keep doing.

00:26:18   Well, I think that's the right approach for all of us, all of us small developers. What you just said, I disagree with half of it. But I also recognize that the pragmatic approach for small developers, and most developers even of any size, is not to try to fight the system because you'll lose.

00:26:43   And in the end, there is a lot we can achieve by working within the system. But at the same time, it's almost like when political parties or governments fight, what you can do as an individual in this giant battle of titans is not much.

00:27:02   You can do a little bit, you can vote with your money here and there, but there's not much you can do really. And so all you can do is hope that the bigger people than you win whatever side of the fight you want to win, and then in the meantime, keep doing your business and do whatever you can to work within the system you have.

00:27:22   And that's great. But I still hope that real change happens as a result of this because in addition to all the freedoms around things like the 30%, can you imagine having a better alternative for payment systems than StoreKit? StoreKit sucks.

00:27:41   If you've ever used anything else to get payments, StoreKit is terrible. And Apple's whole in-app purchase system has so many rough edges and limitations. It's terrible.

00:27:55   And so if better things became more permissible, not only would we be able to potentially use them ourselves or build against them, but also that might make Apple compete a little bit more and make StoreKit less sucky. And that would be great for everybody who uses it.

00:28:12   I would love to have Apple have to compete on this front and to have more options. And I think ultimately we see that. We see when Apple has competition, they do better. They make better stuff and it's better for all of us.

00:28:28   So that's why I'm rooting for people like Epic and Spotify in this particular fight. Because I want Apple to be forced to be a little bit more competitive for our in-app purchase flows and for our payment processing stuff.

00:28:44   And if other payment processes become permissible, I think that'll result in better stuff for all of us.

00:28:51   Sure. And I mean, absolutely, I certainly get that. I would love, you know, better tools is always better. I have such anxiety about the unintended consequences that I suspect any kind of these fundamental changes to the App Store would have.

00:29:07   And I feel like many of those unintended consequences wouldn't be good for me. And so I don't relish looking forward to a future where they may be forced upon Apple and the App Store. And if the cost of those changes is potential uncertainty and we get positive change in StoreKit APIs,

00:29:29   I don't know. That's a tricky balance for me to get excited about. But I certainly agree that I would like StoreKit to be better. That would be great.

00:29:38   It can't get any worse.

00:29:41   Thank you for listening everybody, and we'll talk to you in two weeks.

00:29:45   Bye.

00:29:47   [BLANK_AUDIO]