Several weeks ago, Apple announced that it was set to reduce commission rates from 7% down to 2.5% for all iTunes Affiliates. Apple has made a 180-degree change on the issue, announcing that only in-app iOS purchase commission rates would be dropped down to 2.5%, and all other commission rates would remain the same.
iTunes Affiliates are partners have websites and apps that link to various iOS and macOS applications in the iTunes store itself. The program also includes music, movies, books, and most videos that are listed for sale. When a consumer clicks on the links to the application in the ad, and continues to make a purchase, the partner earns a commission for the sale, 7% of the sale price for Mac and iOS purchases. That commission rate is being reduced to 2.5%, as confirmed by Apple in a blog post, but only for in-app purchases. For example, common in-app purchases include those in games that give players more lives for a one-time purchase.
Apple backtracked on its early plan to cut all commission rates to 2.5%, as developers and affiliate partners made an outcry not to drop the rates. There are several benefits and cons to reducing commission, and it rarely makes partners happy. However, Apple has a very generous 70/30 plan for app developers that are selling their applications, and some in-app purchases are only subscription renewals, meaning partners are already making money and can afford a commission reduction. With both implementation of the new commission rate and WWDC 2017 (Apple’s annual developer’s conference) right around the corner, we will continue to hear about the changes leading up to the event, and I am sure Apple will mention the change to developers at the press event. Apple made the right move to keep the commission rate at 7% for most sales, and overall the change should keep a nice balance for both developers and affiliate partners.