The last couple of days have been interesting for Apple. After reporting their best ever third quarter results – US$53.3b revenue and $11.5b profit with 17% growth – on the back of growing iPhone revenues and cloud service sales which which have doubled over the last three years. All that has delivered a jump in share price to over US$208 resulting in Apple reaching a market capitalisation of over US$1t. That’s a “t” for trillion. But the news isn’t good for everyone inside the Apple bubble.
Members of Apple’s affiliate program, which rewards people who refer others to the App Store with a commission for any sales they deliver, were told yesterday that their commission, which was cut last year from 7.5% to 2.5%, will be cut back to zero. The applies to referrals to the iOS and macOS app stores fr apps and in-app content.
Referrers will continue to receive a commission for music, movies, books and TV shows.
Many websites rely on affiliate programs as a key source of revenue. And for independent publishers who review apps, those commissions, small as they may be, help pay the bills.
Here’s what it means to some publishers. Eli Hodapp from TouchArcade, a site that has been reviewing apps since they became a thing a decade ago, says the cut in the program is a massive strike against his business saying “I really didn’t think it would be Apple that eventually kills TouchArcade”.
At the heart of Apple’s decision seems to be the comment by Apple that “increased methods of app discovery” make the dependence on affiliates linking people into the store less necessary. Those methods include things like searching for a specific app but seeing ads for a different app at the top of App Store results. Yeah – that’s great Apple. And yes, that was sarcasm you may have detected.
I think there are two issues here.
Firstly, it’s pretty insensitive for Apple to announce record profits on one day and then kill off a commission program that brought them more sales.
Secondly, that small commission was a way for Apple to support the community and ecosystem that has grown around their products. Some might remember the days when Michael Dell said of Apple in 1997 “I’d shut it down and give the money back to the shareholders”. Not long after that Steve Jobs returned as the interim CEO and the company turned around. But in those darkest days, Apple was supported by a hardy community that refused to give up.
It seems that supporting the community of people that refer others to Apple is no longer such a priority.