Apple’s Brewing Battle Over Creator Commissions; Stir Hires from Instagram

Apple’s high-profile trial with Epic Games stoked the complaint that Apple’s 30% cut of every in-app purchase hurts social media creators. These gripes are lasting beyond the trial’s end last month, suggesting that even if the judge rules favorably for Apple, creators may be increasingly willing to fight a PR battle to pressure the company to relax its tax.

“They are insanely suppressive. The creator economy would be 10x larger today if Apple’s fee was 3% instead of 30%,” said Sahil Lavingia, founder of Gumroad, which helps creators sell digital products to their fans, in an interview. “I would say it’s the number one bottleneck to the creator economy today.” 

Ten years ago, Lavingia launched Gumroad to provide tools like a shareable buy button. He said the startup, last valued at $100 million, would be “much larger” if it weren’t for the high fees from app stores operated by Apple and Google. (He’s written at length about other factors that held Gumroad back.)

Lavingia notes creator-economy startups such as blogging platforms Substack and Medium have also focused on developing features for browsers, where they can avoid App Store commissions on subscription fees. In Medium’s case, data from Sensor Tower and Similar Web show far more browser views than app downloads. 

“No one consumes that content via mobile app, and I think that’s purely because of the 30%,” Lavingia said.