Apple, Youtube, Instagram, Patreon, Tyler Le/BI
Apple's in-app fees are eating away at creator earnings without giving much back in return, according to disgruntled members of the influencer industry.
The tech giant takes a 30% cut of purchases made in iOS apps, and this levy has spread to more creator platforms. Patreon is the latest to be hammered by the extra charges, joining Substack, YouTube, Facebook, and Instagram.
Apple also imposes these costs on smaller platforms that creators use to earn, such as Kajabi, Mighty Networks, and Passes. The fee takes a percentage of donations and purchases made through Apple mobile devices, affecting marketers, followers, and creators themselves.
The iPhone maker is doing this to generate more profit from its Services division, as the smartphone market matures. While this makes financial sense, it represents a big change for Apple, which has traditionally supported artists and other creative types.
"There's no denying the positive impact Apple has had on the creator economy," said Lindsey Gamble, who advises influencers on marketing strategies. "Yet, the 30% fee it charges now is having a negative impact."
Gamble said Apple is making it more expensive for creators to run their businesses by increasing the cost of reaching big audiences. The fees also leave creators with a smaller cut of donations and other support from fans and force them to either raise subscription prices or absorb the extra costs.
Apple is far from the only platform taking a cut from creator earnings. YouTube takes a percentage of a creator's ad revenue. But the difference is that YouTube provides a clear service by placing those ads on a creator's video, and splits the earnings. That's much more than Apple provides, industry insiders say.
Apple didn't respond to a request for comment from Business Insider.
Creators also lament that besides taking more money, Apple hasn't done much else for them in recent years. One area where Apple did lead for creators was podcasting, but it has since neglected the space and lost its lead to YouTube and Spotify.
In its big entertainment initiatives, Apple has left creators wanting.
The Apple TV+ video streaming service has spent buckets of money on shows and movies, but almost exclusively worked with Hollywood A-listers, ignoring social-media creators. That's a contrast to some other streamers, which have tried to embrace influencers.
Hulu has two reality series starring TikTok-famous families: "The D'Amelio Show" and "The Secret Lives of Mormon Wives." Netflix has a reality show about the TikTok content house, Hype House, and HBO's Max gave influencers Rosanna Pansino and Lauren Riihimaki their own shows. Amazon is the latest streamer to welcome influencer-led content through its deal with YouTuber MrBeast.
It wasn't a foregone conclusion that Apple would ignore influencers in its streaming content strategy. YouTube, another tech giant, has made huge strides on TV screens without relying on Hollywood-style content.
As for podcasting, in 2021, Apple launched a paid membership feature for podcasters that included the chance to be featured at the top of the Apple Podcasts feed. Even though this feature can be a valuable discovery tool for podcasts, Apple hasn't done much to develop it since. And its overall investment in growing the podcast ecosystem has been lackluster compared to rivals.
Despite disappointing creators in its creative initiatives, Apple has been sure to claim its fees from the apps many use to support themselves financially.
Patreon is the latest creator platform hit with Apple's in-app fee. Starting in November, all in-app purchases made on the membership platform via iOS devices will be subject to the 30% revenue cut.
Patreon gave creators two options: raise in-app prices or cover the fee themselves. A third option, which Patreon itself doesn't promote but creators use, is redirecting fans to Patreon's website to subscribe.
But Patreon is far from the only platform subject to the fees. On YouTube, for example, followers can donate to creators through features like SuperThanks, Superchats, and Stickers on videos and livestreams. If made in-app via iOS, these donations are also subject to Apple's fee.
A big problem for creators is that they cannot do much to change Apple's policies or priorities. But they can try to circumvent its fees — and many do.
One creator economy insider, who asked to remain anonymous to protect their working relationship with Apple, said the app they work for intentionally drove traffic to its website and provided discounts for signing up that way.
"The founders just couldn't run the business with a 30% 'loss' on each app subscriber," this person told BI.
That practice could become more widespread.
"Over time, as more creators rely on subscriptions and tipping for monetization, the fees could become more of an issue and could lead to more creators viewing Apple as more of a taker than a giver to the creator economy," Gamble said.
Jim Louderback, a creator economy advisor, recently wrote that creators should Boycott Apple in his newsletter, "Inside the Creator Economy."
"How about creators band together and boycott all Apple products?" Louderback wrote. "Google's store takes less, but still has an outsized vig too that impacts creators. Perhaps the creator-friendly White House can add this to the Apple monopoly action — after it figures out how to penalize Google for its own transgressions. Even more reason for creators to band together and stick up for their rights."
