Under the Radar

133: Collective Bargaining


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

00:00:04   I'm Marco Arment.

00:00:05   And I'm David Smith.

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

00:00:10   So sometimes in our development lives, we find ourselves dealing with or kind of beholden

00:00:15   to one of the big tech companies, some kind of giant power that has way more power and

00:00:21   influence and resources than we do, and we just kind of have to deal with it.

00:00:25   And developers are not the first people to ever face this problem in the world.

00:00:29   One way that people who provide work or labor have in the past gained power and leverage

00:00:37   and negotiating power against bigger, more powerful entities that they depended on was

00:00:42   unions.

00:00:43   Unions are complex.

00:00:44   They can be good, they can be bad.

00:00:47   Basically there is a group of people who is trying to start something called the developers

00:00:54   union.

00:00:55   It's kind of a bad name.

00:00:56   It's not really a union in the typical sense.

00:01:00   It's almost like a coalition, I guess, or it's like a very fancy online petition, basically.

00:01:08   So you can see it's at the developersunion.org.

00:01:11   And a couple of people I know are involved with this, and it's interesting.

00:01:17   Their stated goal is to create basically a group of developers that advocate and kind

00:01:26   of campaign with Apple or lobby Apple to make App Store development more financially viable

00:01:35   and more sustainable.

00:01:37   And the first goal they chose is they're asking Apple to commit by July to allow free trials

00:01:46   for all apps in the App Store by next July, so about a year from now.

00:01:52   And they say after that they're going to start advocating for a more reasonable revenue cut

00:01:55   than the 70/30 split and other community-driven developer-friendly changes.

00:02:01   The specific group here I think is, you know, it's fine.

00:02:04   It's a group of people.

00:02:05   I don't know most of them.

00:02:06   I do know a few of them.

00:02:07   I do think it's an interesting topic to talk about the amount of power and leverage that

00:02:13   we have as developers with companies that we depend on like Apple or even bigger things.

00:02:19   If you're making a Twitter app, there's been changes in the Twitter API recently that are

00:02:24   pretty app hostile.

00:02:26   And there's the question of what kind of leverage do those app developers have over Twitter

00:02:30   to negotiate this and what kind of power do they have.

00:02:34   And there's always basically in this day and age, most of the things you do, you're depending

00:02:38   on at least one tech giant for some critical part of your business.

00:02:43   So it is, I think, worth discussing how much power do we have?

00:02:47   How do you know when you have power?

00:02:49   And what are some effective ways to gain that power or to use it as leverage?

00:02:54   >> Yeah.

00:02:55   It's such a nuanced topic though.

00:02:57   I find I was thinking about what we're going to talk about.

00:03:03   Because I feel like at its core so many of these types of things ultimately comes down

00:03:08   to a question of idealism versus pragmatism.

00:03:12   That it would be lovely if Apple, in the example of the developers union and what they're trying

00:03:20   to advocate for, it would be lovely if they had a series of policies that encouraged sustainable

00:03:27   small businesses on the app store.

00:03:28   Like if that became a desire, a goal, an objective for Apple, that would be great.

00:03:34   And the idealistic part of me sort of likes that thought of that being something that

00:03:41   Apple takes seriously, that they start to care about, and that they take that caring

00:03:46   and they turn it into policy changes that are specifically geared to making that happen.

00:03:51   Like that sounds wonderful.

00:03:54   Then the other part of me, the more pragmatic part of me says, "I don't think that's actually

00:03:59   going to happen.

00:04:00   I don't think that's something that a company like Apple sort of necessarily would care

00:04:05   about or at least not in a way that would have a dramatic change."

00:04:11   And if it did, then it's like in a weird way, it would be difficult.

00:04:18   It just changes the set of problems I have to work with.

00:04:20   That if in some ways now it's like it's super sustainable, now there's more competition.

00:04:25   None of these things have no consequences.

00:04:28   There might be more delightful consequences, but any change you make in a situation like

00:04:36   this is going to have a variety of knock-on effects.

00:04:39   And so it makes me think then on the practical side, part of what I've just sort of—my

00:04:45   typical approach is to say, "The situation will never change.

00:04:49   The situation is what it is.

00:04:50   What can I do about it?

00:04:52   How can I structure my business around that?

00:04:53   How can I work out that if I find myself in a position where I don't really feel like

00:04:58   I have big power or much power influence?"

00:05:04   That's probably true at the low level, but there's usually at least something where

00:05:09   you have to be able to look at what you do have, and you have some amount of leverage,

00:05:15   and you can provide some amount of value to even a bigger company.

00:05:19   For example, one of the things that comes to mind for me is I don't feel like I have

00:05:23   much power influence at the high level, but at an individual level, at the low level,

00:05:30   I provide a service to Apple every summer typically where I try all their APIs out and

00:05:36   find all the weird issues and bugs and problems with it, and by doing that and doing something

00:05:41   that I've been doing for a long time, I can exert a certain amount of—I have a certain

00:05:46   amount of pull and connection with a variety of people within Apple who, having their goodwill,

00:05:52   is then beneficial to me.

00:05:54   And that side of things is finding that a teeny point of utility that I have to them

00:06:00   where I'm not interchangeable and emphasizing it, but that tension between "boy, it would

00:06:06   be nice" and "what is actually going to happen in reality?"

00:06:10   I feel like is such an awkward thing to navigate.

00:06:12   Yeah, I think when talking about trying to form any kind of power or collective bargaining

00:06:22   power against Apple, I think the reality is they don't care about a group of a few hundred

00:06:30   independent developers.

00:06:31   They just don't care.

00:06:32   They have, like, what, hundreds of thousands or millions of developers registered with

00:06:37   them?

00:06:39   And so anything that you can organize with a few hundred to a few thousand people on

00:06:44   a website is going to only ever be a very, very small percentage of their developers.

00:06:50   Furthermore, if you look at what apps are actually used and the frequency of what apps

00:06:55   are actually used and bought and downloaded and things like that, a lot of them aren't

00:07:01   indie developers.

00:07:02   A lot of them are big companies.

00:07:03   And a lot of those big companies do have power and influence over Apple.

00:07:07   For instance, look at the drama that happened with Uber back about a year ago when it was

00:07:12   found that they were abusing the unique identifiers of the phone to track people.

00:07:16   Look at all the drama that always erupts around whenever Facebook has some creepy thing they're

00:07:20   doing with their app or they're abusing a part of the system to get more data or stay

00:07:24   running more in the background.

00:07:27   The reality is that Facebook and Uber have immense power over Apple because Apple can

00:07:33   threaten to say, "Look, if you don't fix this, we're going to take your app out of the store."

00:07:38   But Apple also knows that they can't really take those apps out of the store because if

00:07:42   they do, they're going to have a big problem with their customers.

00:07:44   If their customers buy an iPhone and that iPhone can't run Facebook, that's going to

00:07:49   be a pretty big problem for Apple.

00:07:52   All the fallout from that is going to land on Apple, not on Facebook.

00:07:56   And Apple knows that.

00:07:57   So Apple knows that in that relationship, they kind of have to reach some kind of deal

00:08:04   with Facebook where like, "Okay, we'll find a happy medium where we can work together

00:08:07   on whatever you want to do."

00:08:10   Same thing with Uber, right?

00:08:11   That's why when Uber was found to be doing this gross, horrible thing, they got a private

00:08:16   phone call from Tim Cook, not just kicked out of the app store with an email, like what

00:08:20   most of us would get.

00:08:22   So there are entities and companies that do have bargaining power over Apple.

00:08:29   We are not those entities.

00:08:31   If all of our apps got removed from the store, if every app made by an indie developer got

00:08:36   removed from the store tomorrow, there would be angry people, but it wouldn't be anywhere

00:08:42   near what would happen if Facebook was removed or if some of the big games from the big game

00:08:47   publishers were removed or if Netflix, the big companies like that, they're the ones

00:08:52   with the power here.

00:08:53   We unfortunately aren't.

00:08:55   Additionally, the world of indie developers is quite large and quite diverse.

00:09:02   So any effort to organize, if you look at the way unions in the physical world do it,

00:09:10   it's fairly easy to make contact with, to reach, to meet with every employee at a factory.

00:09:19   That's something that is reasonably done in the real world.

00:09:25   There is no way really for any of us to reach all or even most or even a majority or even

00:09:33   a plurality of indie developers.

00:09:35   There are just too many of us, too many different areas, too many different languages, too many

00:09:40   different cultures.

00:09:42   There'd be no way for any large effort to actually try to contact and then organize

00:09:50   indie developers in a useful way.

00:09:53   So any kind of organization like this would always be limited to some small community

00:09:59   relative to the larger group.

00:10:02   And so there's no way that's ever going to have power to be able to demand things

00:10:07   from Apple and have a reasonable chance of getting those things done.

00:10:11   There are different ways to do that, but mass organization and trying to do what unions

00:10:18   do in regular industry or real life, I guess, whatever, it's kind of a weird term, but

00:10:24   trying to do what unions do with factories and stuff is not going to work in the indie

00:10:29   iOS developer scene because it's totally different.

00:10:34   The numbers are totally different, the situation is totally different, and developers might

00:10:39   not want to be a part of this.

00:10:43   Even if you can reach them, people have different opinions.

00:10:46   A group of people who dictate a list of things like this, their primary thing is to get Apple

00:10:55   to commit to allowing free trials for everything.

00:10:59   I didn't put my name on this because, first of all, I think that's a lost cause.

00:11:04   I think that battle was fought and lost long ago.

00:11:08   Apple has been very, very clear that they don't think that that's a good model for

00:11:13   the app store, that they want people to use various in-app purchase and subscription things

00:11:17   instead.

00:11:18   I didn't want to put my name on this because I feel like I'm asking for something that

00:11:22   I'm never going to get, and that puts you in a bad negotiating position to have the

00:11:26   very first thing you're asking for be something that you just have no chance of.

00:11:32   Even something like this, I read this, I know people who are in this, and even I wouldn't

00:11:38   put my name on it.

00:11:39   That's just one example.

00:11:42   Any effort you try to have to try to mass organize iOS developers, you're going to have

00:11:48   this problem where developers are pretty resistant to that kind of thing, even if you can reach

00:11:53   them.

00:11:54   The reality is you probably won't reach a large percentage of any developers.

00:11:59   >> Yeah, and I think that diversity angle is in many ways the root of why, it's the

00:12:08   funny thing about why we as a group have little, in general, would have limited power against

00:12:15   a larger organization.

00:12:18   By the nature of our diversity, of all of the different interests and genres of apps

00:12:24   and approaches and even business structures that we have, that diversity is in many ways

00:12:31   what makes us a rich and interesting community that I think can make some really compelling

00:12:36   software that our goals are often not necessarily just the same type of goals that Netflix or

00:12:44   Facebook or Uber has.

00:12:46   Our goals are, I know many developers who develop apps because they love making apps,

00:12:51   and the business side of it is much more diminished than a company that is entirely focused on

00:13:00   the bottom line and extracting every possible penny out of their customers.

00:13:06   The diversity there is what makes us interesting, but also diminishes dramatically our power

00:13:17   in the situation.

00:13:18   I think in many ways it is because we all have different goals and needs and wants that

00:13:24   what I would want, I don't even honestly, I was trying to think about what I would want

00:13:30   Apple to change in the App Store.

00:13:34   Things like free trial, I don't think I want that.

00:13:38   If it happened, it would be fine, but it wouldn't really affect me.

00:13:41   None of my apps really would benefit from having a free trial necessarily, I don't think.

00:13:46   I can imagine and I know of many apps where it would benefit, but for my apps personally,

00:13:52   I'm not sure that really fits the type of app I make.

00:13:56   A better revenue split with Apple, sure, sounds great, but the reality is I make most of my

00:14:02   money outside of Apple's cut.

00:14:03   I make most of my money from advertising that I put in my ads.

00:14:08   That's the business model I'm in.

00:14:10   That's actually, it would be nice.

00:14:12   I'm never going to say no to more money, but just as an example of, as somebody who

00:14:19   has been an independent developer for such a long time, those types of topics aren't

00:14:23   the things that, if I could sit down with Phil Schiller or whoever the appropriate decision

00:14:29   maker at Apple was and was advocating for things, I'm not even sure there's that many

00:14:33   of these types of more policy changes that I would look at.

00:14:37   I would be looking for things that are much more tactical probably and low level, like

00:14:41   seeing changes in the way iTunes Connect works or being able to A/B test screenshots.

00:14:49   I could imagine a variety of things like that that I could see wanting to change.

00:14:54   Or even more over, you start to get into other things where it aren't necessarily related

00:14:58   to my business or being an independent developer that I think would just be good things in

00:15:05   a more fundamental way, where it's like I think about how what I don't like about the

00:15:09   App Store most in some ways now is the degree to which it is focused around gambling style,

00:15:17   inapp consumable, inapp purchase applications.

00:15:21   That's more of almost a philosophical or political desire for change there rather than one that's

00:15:28   strictly coming out of a business, a felt need that I have in my business.

00:15:35   This is just me and my opinions.

00:15:36   When I see something like this, it's the difficulty around the diversity that a group of independence

00:15:43   brings by our fundamental nature.

00:15:48   Being an indie is short for being independent.

00:15:52   That independence makes it very hard to imagine a collective thing where by nature, by becoming

00:16:01   a collective, you lose independence by definition.

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00:17:43   So you know, I think the big issue here with trying to organize in a union fashion basically,

00:17:50   to summarize what we've said, is that basically we don't have any way to accumulate enough

00:17:55   power to matter.

00:17:56   Because you're never going to reach too many developers because developers are such a diverse

00:18:01   group.

00:18:02   Even if you try to organize developers, even if you could reach them, it's really hard

00:18:05   to get everyone to agree on what the causes and priorities should even be.

00:18:11   And one of the biggest problems with that is that, with using this kind of structure,

00:18:16   is that there's basically no way to enforce people staying in a union or complying with

00:18:25   the union.

00:18:26   You know, one of the biggest, like most dramatic things you hear about with unions, and one

00:18:30   of the ways they can exercise their power, is by a strike.

00:18:33   But there's no way to actually have a union of developers enforce a strike.

00:18:39   Like what are we going to do, I'll pull our apps out of the store?

00:18:43   In the real world, with unions for like a factory and stuff, you can enforce that with

00:18:47   social pressure, with intimidation, in worse ways.

00:18:53   But there are ways to encourage and enforce compliance and actual, like you know, being

00:19:00   a union, like actually unity and standing up with everyone else.

00:19:04   In the app store, there's no way to do that.

00:19:06   Like what's going to happen if a whole bunch of people pull their apps out of the store?

00:19:10   Well a whole bunch of other people will keep their apps in the store and make more money.

00:19:13   Like there's just no way to actually pull that off.

00:19:16   So basically I think this whole structure is not great.

00:19:21   And what's instead, the way to accomplish things with Apple, first of all, is to recognize

00:19:28   whether what you're asking for is realistic or not.

00:19:32   With things like reducing the cut, Apple already has given us a way to reduce it from, to increase

00:19:39   our part from 70 to 85.

00:19:41   And that is with subscriptions after the first year.

00:19:44   And when they first said this, I thought, great, but you know, I don't think it's ever

00:19:47   going to be that meaningful to me.

00:19:49   Well I now have one of these subscriptions, and as of this past fall, I now have people

00:19:53   on the 85% tier.

00:19:55   And it turns out that so many of them are on the 85% tier, because so many of them stuck

00:19:58   around for the second year, that my average app store cut is now 79%, which is great.

00:20:05   This is way better than I would have expected how this would go.

00:20:09   So they actually are giving us ways to do it in small ways like that.

00:20:13   Free trials, again, there are ways within App Purchase to kind of approximate that,

00:20:19   and people have tried a lot of them.

00:20:20   And people have largely found a way to adapt to that.

00:20:22   So simply taking advantage of what we have in the Apple system, like taking advantage

00:20:27   of the things they do give us, is, as you mentioned earlier in the show, mostly the

00:20:31   pragmatic option.

00:20:33   Because here's one thing they're not going to do.

00:20:35   They're not going to all of a sudden become beholden to a group of 100 indie developers.

00:20:39   As we mentioned earlier, that's just not enough developers to matter.

00:20:42   They're also probably not going to reduce their cut for everybody, because why?

00:20:48   They make tons of money with that, and they are trying to grow their services business,

00:20:53   and that's the biggest part of their services business.

00:20:55   So there's actually massive Wall Street and potential board incentive to not voluntarily

00:21:03   lose their services revenue for no apparent reason.

00:21:07   I think if they actually did that and services stopped growing for a few quarters, Tim Cook

00:21:12   would have a big problem on his hands from investors and the board and everything else.

00:21:16   So that's not going to happen.

00:21:18   It's just not going to happen.

00:21:20   So instead, focus on things you can do.

00:21:23   So things like policy changes, API changes, editorial changes, those are all things that

00:21:27   we can do by using the press, by using blogging and Twitter and podcasts.

00:21:34   We do have influence over things like that, because Apple is sensitive to bad press.

00:21:39   We also have the ability to simply argue and make good points in public, because inside

00:21:45   Apple most decisions that we see on the outside had or have an argument behind them that happened

00:21:51   inside.

00:21:52   And they use public blog posts and comments and articles and things like that to help

00:21:58   bolster one side or the other of those arguments inside.

00:22:01   And those can and have changed the way these decisions are made or changed the outcome

00:22:07   when they're good arguments or when enough people or when influential enough people are

00:22:11   making them.

00:22:12   So this is how to argue with Apple.

00:22:15   This is how to put pressure on Apple, is make good arguments and use the press.

00:22:21   Those are the tools we have.

00:22:23   Beyond that, unless you're planning on becoming Facebook or Uber, you basically have to work

00:22:28   within the system that we have.

00:22:30   And that's not necessarily a horrible thing, but it is the reality of it.

00:22:35   If you don't want to work within the Apple system and you don't have any interest in

00:22:42   doing the things that we can do, if you only want things they're never going to give us,

00:22:48   you don't really have a lot of options here, because you don't have any power.

00:22:51   In any negotiation, it's very important to recognize, do you actually have any power?

00:22:57   And what is that power?

00:22:58   And what is the value that you are providing to this big entity that you are threatening

00:23:02   to take away if they don't comply with your demands?

00:23:05   And if that value isn't really big, they're probably not going to comply with your demands.

00:23:10   So my suggestion for pragmatism and for healthy business practices in the App Store is to

00:23:16   just work within what we have.

00:23:19   Make good arguments with blog posts and stuff like that when you have them, but otherwise,

00:23:24   this is the system we have and it's better off to just be in it.

00:23:27   >>

00:23:28   And I think that approach, which I think is broadly, I think it's what both of us have

00:23:32   been doing for years now, is the approach of recognizing what abilities and power we

00:23:43   have and the things that we really uniquely bring.

00:23:47   I think we have, like when you and I talk about things in the App Store, it has the

00:23:53   weight of someone who has been doing this for a long time and who has a lot of experience

00:23:59   in it.

00:24:00   And so if that is being used internally as a argument for something, it is in many ways

00:24:06   it is building up a reputation that hopefully carries some weight that if, at the very least,

00:24:12   would get someone's attention or at the very least would be a useful mechanism inside of

00:24:18   that.

00:24:19   Because in reality, in weird ways, there was a time when I was fairly pessimistic about

00:24:26   the App Store.

00:24:27   I'm pessimistic.

00:24:28   There was a period probably maybe about six to seven years into the App Store where I

00:24:34   started to really be a little bit more down on it and started to question whether this

00:24:38   is where I wanted to make my living.

00:24:40   But I would say more recently that's not the case, that I've seen substantial and

00:24:46   measured improvements in the App Store year on year on year.

00:24:50   Thanks, Phil.

00:24:51   Yeah, it's like, "Thanks, Phil.

00:24:52   It's great.

00:24:53   It does seem to coincide with some leadership changes," which is great.

00:24:57   And so from that perspective, I look at it and I just think, "These things are going

00:25:02   in a good direction."

00:25:03   And I like that.

00:25:06   It's cool to see.

00:25:07   It makes me feel confident that this is still a good place for me to make my business.

00:25:12   And because those changes are there, it makes me feel comfortable to just keep on with the

00:25:17   approach of finding interesting and creative ways to work within the rules as they are.

00:25:24   I think in many ways, that is what I found to be very successful.

00:25:28   It's like, "Well, Apple won't give us X."

00:25:31   It's like, "Well, okay.

00:25:33   How can we approximate X?

00:25:34   How can we find an interesting and creative way around that?"

00:25:38   And often that creates new and interesting opportunities.

00:25:41   It ultimately, in a lot of cases, seems to shift slowly Apple's policy or it creates

00:25:48   reasons and examples for them to want to invest time, energy, and effort into doing something.

00:25:55   I think the degree to which Apple apps have started to move towards a scription model

00:26:02   for a lot of their businesses, which by and large seems to be...

00:26:07   It's not a universal fix or it's not a universal solution, but by and large seems to be working

00:26:12   well for a collection of applications.

00:26:15   I think there's issues around subscriptions that have gradually been worked on and improved

00:26:20   beyond things to do in just the revenue split.

00:26:22   But on the technical side, every year it seems like at W3C, there's a whole new set of things

00:26:29   that Apple is investing engineering time into to make it better.

00:26:33   And I'm sure that it's coming from experiences that developers are having when they actually...

00:26:39   If Apple gives us something, if we start using it, we find the issues, they are gradually

00:26:43   responsive to that.

00:26:44   And it would be lovely if they were instantaneously responsive, but that's not realistic.

00:26:49   I don't think that's something that I would ever really expect or put hope into because...

00:26:54   And the reality is it's probably wise for them to steer this...

00:26:58   It's like the App Store is kind of a big ship and steering it with a slow rudder at the

00:27:04   back, making small course adjustments, seeing how they turn out, make a small course adjustment

00:27:09   to see how it turns out, is honestly probably what I would prefer.

00:27:12   That making large sweeping changes abruptly sounds kind of terrifying in some ways.

00:27:17   I'm not saying this is what these...

00:27:18   Anyone is specifically advocating for, but by and large, Apple's approach of this gradual

00:27:23   improvement, as long as I find myself in a place where I feel like every year the App

00:27:29   Store gets slightly better, that it's gradually improving, then I'm happy.

00:27:35   I like that stability that that provides, and I like the feeling that maybe it's easier

00:27:40   in some ways at an individual level, both personally with people you might know who

00:27:46   work within Apple or going to WWDC, and I go to the iTunes Connect Lab and I talk to

00:27:51   the people who work on the iTunes Connect team, not because I think that that specifically

00:27:55   is going...

00:27:56   Like things I'm saying there are specifically making change, but it's planting seeds in

00:28:01   people's mind that they have a counter example in their head when they are at the meeting

00:28:07   and they're discussing this thing.

00:28:08   I talk to them about something that I find frustrating.

00:28:12   Maybe when that comes up in a meeting in six months, they have that counter example in

00:28:16   their head.

00:28:17   That kind of personal connection and that kind of personal intervention is the kind

00:28:23   of thing that we do have power in, and that's the power that I think we can best use as

00:28:29   independents is embrace our uniqueness, embrace our individuality, and use that as best we

00:28:36   can because I think that is far more powerful and far more likely to succeed than trying

00:28:42   to build a cooperative that would have a singular vision or a singular goal.

00:28:50   We lose what we are in some ways by doing that, as noble and as good meaning as the

00:28:58   initial thought may be.

00:29:00   >>

00:29:12   Thanks for listening everybody, and we'll talk to you next week.

00:29:35   Bye

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