Email, Why Did It Have to be Email?
Will the ‘Hey’ fiasco finally tear down Apple’s in-app wall?
Okay, part two of this. Because I really don’t want to be doing email right now. But I’m perfectly happy to write about email!
The second story today was more ridiculous. Yesterday, you may have read about Hey, a new email product from the folks behind Basecamp. It looks interesting. I’m not sure it’s for me exactly, but I appreciate any and all efforts to solve this problem. I definitely want to try it out. Consider this my blatant plea for an invite. (Update: got one — thanks, Jamie!)
Anyway, today Hey was back in the news for a different reason: Apple decided to block an update they submitted after determining that they were circumventing the App Store’s in-app payment rules. …I’m sorry, let me re-state that… After determining they were circumventing the App Store’s utterly arcane and potentially anti-competitive in-app payment rules. This isn’t even a controversial statement at this point, basically everyone is saying it.
In order to get into the App Store, Apple wants Hey to offer their service as an in-app payment. And yeah, sure, in-app purchases are nice and seamless. As an end-user, I’d like that too. The problem is the rub: with in-app purchases, Apple takes a 30% cut out of transactions. This is something they’ve been doing for a decade-plus now, and many businesses have thrived in this world. Including, of course, Apple. Mostly, perhaps, Apple.
But just in case you haven’t been outside in a while — which you haven’t, because no one has — 2020 is a pretty different world than 2008. Pandemics aside, Apple can no longer with a straight face say that the 30% cut from apps, originally stated to help Apple “keep the lights on” and run the App Store break-even, is warranted.
I’m not saying Apple shouldn’t get a cut. They absolutely should. They are offering a service and they should be compensated for that service. What they need is an entirely new rule book around how they get compensated. One that is not so black and white. One for the 2020 world of mobile not the 2008 one.
Yes, yes, Apple has cut the 30% rate to 15% for second year subscriptions. That’s not nearly enough. There needs to be far more granularity in the model, given all the different types of models and businesses they’re supporting. And they clearly know that as they already have all these seemingly arbitrary rules around these cuts if the business happens to be large enough. It’s time to go deep with going granular.
Further, it’s beyond time to allow services to let their customers sign up and pay for a service as they wish. I’m fine with Apple saying you need to offer in-app payments (assuming the cut is right, per above) as long as they don’t prohibit you from signing up other ways. Like, say, with Hey directly. Right there. From the sign up page in the app. Apple should compete by offering the most seamless sign up, not by putting up a barrier (or full-on wall) around all other options.
Anyway, it feels like the winds are changing. This Hey situation is interesting in that it’s timely — the week before WWDC — but it’s hardly the first time Apple has over-reached here. And with each passing year, the sleights seem more out of touch with reality. This situation feels like a perfect front end to the back end movement of anti-trust investigations on these matters being asked for by Spotify and also just today, Rakuten.
Hard to see how Apple bobs and weaves from such a one-two punch in this environment. I suspect the 30% cut morphs and the in-app requirement is altered sooner rather than later. The writing has been on the wall, and I appreciate that it may now be most clear in the form of an email app.
