Fanhouse adds a 30 percent surcharge to in-app purchases to cover Apple tax
After pushing back against Apple’s App Store fees last year, creator platform Fanhouse is introducing in-app purchases to its iOS app — now with a 30 percent surcharge to pay Apple — to let users subscribe to their favorite creators. The app’s co-founder, Rosie Nguyen, announced the changes today on Twitter. The company wrote that the changes are being made “as a result of apple’s b.s.”
On Fanhouse, creators charge a subscription fee that allows fans to access exclusive (SFW) content like updates, photos, and videos. Followers can also tip creators or purchase “locked” content. The app promises its creators will receive 90 percent of payments, with the remaining going to the app.
Fanhouse was initially able to slip a “subscribe” button into its app that directed users to make payments online — violating Apple’s rules requiring digital purchases to go through its own in-app payments system and pay its typical 30 percent fee. After Apple demanded changes, the company tried to pressure Apple into updating its rules so creators could keep a larger cut.
Nguyen told The Verge last year that Apple’s tax hurts individual creators, not just the platforms they use. Fanhouse was told it would need to start paying Apple 30 percent of creators’ earnings or get booted from the App Store. In June, Fanhouse received an extension through the end of 2021 to either come into compliance or face removal.
Ultimately, Apple didn’t relent. “There’s basically nothing Apple was willing to accept as an alternative,” Nguyen told The Verge last week. Fanhouse will now introduce a system of virtual tokens that users will purchase that will be priced to include Apple’s 30 percent cut on iOS — meaning the Apple tax is passed onto the users. Nguyen said fans still want a way to access creator content even with an increase, and creators will still get to keep 90 percent of their subscription revenue post-Apple tax.
It’s fucked up, and we were forced to implement IAP today or not even exist as an app. We’ve been fighting this for months, and we will keep trying to fight it. We’re talking to senators, we’re supporting the Epic case, and we’re remaining transparent with all of our users. (20/)
— jasminericegirl (@jasminericegirl) January 26, 2022
On the platform’s website, users are urged not to buy tokens in-app, where they cost more than on the web. According to the site, 2,000 coins costs $30 on the app and $20 on the web. On Twitter, Nguyen wrote, “If the app wants you to enter payment information, don’t. It means ‘give Apple 30% of your money.’ Purchase coins on web, and you can freely use them in app after.”
Fanhouse isn’t the first platform — or the biggest — to try to get Apple to change its rules. The court battle between Epic, the maker of Fortnite, was in part over App Store fees. How Apple collects fees from platforms, especially as more and more roll out subscription options for individuals, means the question will be increasingly relevant to creators and developers.