six colors

by Jason Snell & Dan Moren

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Linked by Jason Snell

Apple cuts affiliate commissions on apps

Most people would be surprised that Apple offers websites (including this one) a small commission on app referrals. So the news that it’s cutting those commissions from 7 percent to 2.5 percent on May 1 probably doesn’t resonate. It’s inside baseball stuff, right?

Yes, except: A lot of websites that spend a lot of time and energy reviewing apps are funded, at least in part, by affiliate revenue. It’s a negligible part of Six Colors revenue, but I believe it’s still a major factor in sites like AppShopper, TouchArcade, AfterPad, and even MacStories.

These commissions came out of Apple’s cut of app revenue, so this is essentially Apple reclaiming a lot of money—and assuming that the money in its pocket has more overall value to Apple than the promotion of third-party apps by external websites. In the end, it’s probably the developers of third-party apps (who lose independent exposure) and the people who have built businesses around the app ecosystem (who are losing almost two-thirds of their affiliate revenue) that will suffer, while Apple keeps rolling on.