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Google and Apple facing backlash from app developers over app distribution 'tax'

After Fortnite, Netflix is also now looking at ways to bypass the need to pay a large cut of its revenues to Apple and Google.

  • Published: August 23, 2018 12:28 PM IST
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App developers are looking at new ways to distribute their apps, as Google and Apple continue to levy high charges on app revenues on the official Google Play Store and App Store distribution platforms. More app developers are going the Epic Games way by skipping launching key revenue-making apps on the official app stores, in order to avoid sharing any revenue with Google or Apple. The latest in the list is Netflix, which is looking at ways to bypass the distribution ‘tax’.

Apple and Google collect large percentages of revenues from apps, both paid or ‘freemium’. The distribution platforms get a cut of any sales either through an up-front app cost or in-app purchases, and those collections can be rather high for certain apps that tend to sell a lot through subscriptions or in-app purchases. Epic Games, which recently brought its popular game Fortnite to the Android platform, has done so without involving the Google Play Store.

Netflix recently announced that it is also exploring a way to bypass the App Store for selling its subscriptions on iOS devices. Currently, users can subscribe to various Netflix plans directly through the app, which also ensures that 15 percent of this revenue must be paid to Apple. In order to avoid paying this ‘tax’, Netflix is looking to send users to its own site to complete the payment, although this will make the process a bit longer and more complicated for users. However, that 15 percent which no longer needs to be paid to Apple may well make the process worth it for Netflix.

Similar to Epic Games and Netflix, Valve is also exploring similar options. However, these attempts are seeing backlash from both Apple and Google, which naturally want to protect their interests. App revenues are a massive source of income for both of these companies, which by virtue of controlling the respective smartphone operating systems, also make their own app distribution platforms as the easiest way to download apps. Bypassing the stores is possible, but makes it considerably harder for users to get these apps on their devices, due to security layers and complicated installation procedures.

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Nonetheless, it does seem that the revenue savings are making these options worth it for high-revenue app developers. While these kind of workarounds are currently only being attempting by big name publishers such as Epic Games, Valve and Netflix, it could lead to a wave of backlash and revolt, as more app developers stand up against the app ‘tax’ levied by Google and Apple.

  • Published Date: August 23, 2018 12:28 PM IST