The creator economy is running into the Apple Tax — this startup is fighting back

Fanhouse wants to send 90 percent of payments to creators

Apple is colliding with the platform fanhouse On whether it has to cut in-app payments to creators. The incident underscores how little Apple understands about the maker economy, the likely result being less money in creators’ pockets — and more money for one of the world’s most profitable corporations.

The founders of Fanhouse — which is basically fans-only with no nudity — says the platform will be taken out of the App Store in August if it doesn’t start paying more than the 30 percent fee when people use it via the iPhone app. do shopping. Streamer, one of the creators of Fanhouse breadwichery, says that the deduction would mean loss of rent for the two months so far from his earnings. The company doesn’t have a lot of options to push back, but it is start a campaign today To put pressure on Apple to ease its rules around payments to manufacturers.

Fanhouse is only the latest company to clash with Apple over App Store terms that are seen as increasingly steep and domineering. Sure, it’s a small app, and its disappearance won’t be a problem for Apple, but the situation speaks to the challenges facing maker-focused apps in the App Store. As the maker economy continues to grow, the rules mean that Apple will take more money from not only businesses, but individuals.

“People are using this platform to make a living, starting with me, our first creator,” Jasmine Rice, a fanhouse maker and one of the co-founders of the platform, tells The Nerdshala. “I use it to pay my family bills. I use it to pay for my mother’s medical expenses.”

Fanhouse, which launched in 2020, initially went beyond the App Store’s Bouncer and offered payments on the web without any problems. Now that Apple has seen the potential for profit, it’s given the same ultimatum to the fanhouse that it gives to (almost) everyone: The fanhouse will either have to pay up or boot from the store.

The app itself only takes a 10 percent cut, so the platform’s creators could soon earn a whole lot less. Rice says she would be fine to hand over a 30 percent cut of its profits from fanhouses to Apple. But once that 30 percent has to cut into creators’ profits, it starts to hurt. people, not just the platform. “This money really means for some people a second job, that they have a place to live, that they can afford tuition,” Rice says. “And we tried to explain it to Apple.”

Fanhouse allows creators to subscribe for access to a private social media feed where they can post updates about their lives or publish photos and videos. Creators can also make money from tips, or they can post “locked” updates that fans must pay to see. Each account also has a public feed that can be viewed without a subscription, which is why the app was able to slip through the App Store unnoticed until now.

apple told ledge It is working with Fanhouse to bring the app into compliance with its rules. company is mentioned Its in-app purchase guidelines And said fanhouse was previously dismissed because of a similar violation.

Apple requires a 30 percent deduction from in-app purchases of “digital” goods, such as fortnite Skins or Netflix subscriptions, although there are many exceptions to this. That figure has been reduced to 15 percent for multi-year subscriptions and apps that make less than $1 million. (Fanhouse has over $1 million in revenue, but it pays nearly all of it to creators.) And it’s up to Apple to decide what qualifies as “digital” and what doesn’t. For example, Apple allows Patreon to offer third-party payment solutions for creators instead of using in-app purchases to avoid fees. Other apps are not granted that privilege. Apple and Patreon did not respond to a request for comment on the arrangement.

Apple’s App Store rules didn’t even accept creators until this week. On Monday, they were updated with a new clause saying that creator-created content and experiences are allowed in apps — as long as they’re powered and monetized properly for Apple.

The problem is likely to get worse as platforms offer creators more ways to get paid. Twitter plans to take 20 percent off ticketed audio rooms later this year, of which Apple will take another 30 percent if fans pay on their iPhones. Facebook is waiving its deductions on fan subscriptions and other sources of creator revenue for next year, but Apple will still take 30 percent when purchases are made through its stores. Twitch already lets Apple cut subscriptions and tips made through iOS by 30 percent, but it hikes prices there so viewers have to cover the additional costs.

Other creator-focused services aren’t offered on iOS simply because of Apple’s rules: Spotify doesn’t let listeners pay for podcast subscriptions, despite offering them, and is available on the OnlyFans platform at all due to Apple’s restrictions. is not. sexual or pornographic material.” Newspapers construction equipment criticized these policies last month, writing that “Apple is now one of the main obstacles to independent creators thriving on the Internet.”

Apple is currently stuck in a legal battle with Epic, the maker of fortnite, Its on App Store fees. Apple is happy with its cut: it generated $64 billion in revenue last year, According to CNBC analysis. During testing, Apple CEO Tim Cook said that allowing other payment options would “briefly eliminate our total return on our IP.”

“I think it speaks to producer illiteracy,” says Bradwichery, a narrative game streamer who works part-time as community manager for Fanhouse. “Corporations like Apple, don’t you think that if you invest in creators and treat them well, they’ll be inspired to create more content and make more money?”

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