Content creators using the online platform Patreon may have to raise prices for their backers to compensate for tech giant Apple claiming a 30 percent share of all transactions completed within the platform’s app on iOS devices such as iPhones or iPads.
On Patreon, individuals or companies can charge for the material they create, either as one-time or recurring monthly payments. Content on Patreon can include anything from podcasts and personal training to music, comics, and more. Much of it is digital, but creators can also offer physical goods.
Starting in November 2024, Apple will charge Patreon a fee for all products and new memberships purchased through the Patreon iOS app.
Apple already imposes this fee on many other apps and providers in its App Store. Patreon only recently began enforcing the fee, although the reason for the exemption is unclear.
Apple did not respond to CBC News’ request for comment. In an emailed statement, Patreon says it “doesn’t have much flexibility with this change” and is trying to prevent it from seriously impacting creators’ earnings.
It was noted that the new fee would not apply to existing memberships, but only to new transactions within the app on Apple devices.
Patreon says it is preventing “disruptions” to creators’ earnings by, among other things, developing automatic price increase tools in the iOS app to maintain creators’ earnings.
The company also said it does not recommend that creators keep their prices unchanged because Apple’s 30 percent cut will come from the money the content provider would otherwise have earned – not from Patreon’s revenue.
Creators are not happy with this change
This move has been met with mixed to negative reactions from some Patreon creators.
“I’m mad at Apple,” said Ernie Smith, a Patreon user and editor-in-chief of the tech newsletter Boredom.
According to Smith, who lives in Virginia, Patreon should leave the Apple ecosystem, “cut its losses on this whole app thing” and accept payments only on its website, where there would be no Apple fee.
“When I signed up for Patreon, it was just a website, you know?” he said, laughing.
Apple requires the app Patreon to use iOS’s in-app purchasing system, which charges a 30% transaction fee, and some content creators fear this could hurt their revenue.
For Edmonton-based Patreon user and podcast producer Craig Baird, the change could force him to raise prices for his backers.
The price increase may not seem drastic at first, he says, since the lowest tier of his own Patreon, Canadian History Ehx, costs $3 a month.
But nothing about the product he creates or Patreon itself has changed to justify this increase.
“It feels like Apple’s costs are being passed directly on to me,” he said.
It’s currently unclear what the dollar value of those increases might be. Podcasters like Baird don’t have specifics on how many users pay through the Apple ecosystem, and Patreon has declined to share that data with CBC News.
While it’s possible to raise prices only for Apple users, App Store rules might prevent it from actively telling people about cheaper alternatives.
Baird said he had to find a way to implement this change because many of his podcast listeners use Apple Podcasts and would automatically be directed to the iOS Patreon app to pay when they clicked a link on his show.
“No choice” for app developers and users
Industry observers and technology analysts point out that Apple’s iOS system is one of the most popular operating systems for mobile phone users in the world, so if app providers want to gain access to iPhone users, they have to rely on the decisions of the tech giants.
“App developers have no choice but to pay these taxes, as you might call them, to the platform owners,” says Mohammad Keyhani, associate professor of entrepreneurship at the University of Calgary’s Haskayne School of Business.
Apple has won and lost several court battles in recent years against Fortnite Developer Epic over similar policies, with Epic losing several rulings over its attempts to circumvent Apple’s 30 percent fee.
In one case, a court ruled that Apple could not prevent developers from offering alternative payment methods that could circumvent the 30 percent fee. But Keyhani said Apple responded by instead charging a 27 percent fee on anything that used alternative payment methods.
Developers who try to find alternatives to these fees risk being banned from the Apple App Store.
He said governments may start to take notice as companies like Apple or Google become gatekeepers not only of what happens on devices around the world, but also of how customers pay for what they want to do.
“Governments, judges and judicial systems around the world will realize that these companies have now effectively implemented a tax system for all types of value creation that takes place in the economies they control, namely the app platforms,” Keyhani said.
However, London, Ontario-based tech analyst Carmi Levy is not sure whether Canadian authorities would act quickly to stop these companies’ behavior.
“Canada tends to lag behind when it comes to introducing new laws that would curb the excesses we are seeing in the technology industry,” Levy said.
He noted that those who rely on services that rely on Apple platforms will have to accept that they may not have as much say as they would like.
“The sad truth is, if you’re a creator using Patreon to generate subscription revenue and advance your career, someone else built the playground and someone else makes the rules. And in this case, that’s Apple.”
