Tech Brew Ride Home - Wed. 11/18 – Crack! Apple Cuts Its App Store Vig In Half

Episode Date: November 18, 2020

The App Store has cracked open a bit. Apple will cut its vigorish in half, for most developers, but not the ones that make them the most money. Robinhood is probably gonna join the cavalcade of IPOs. Marissa Mayer is back. And the biggest social network you’ve probably never heard of is coming from France. Sponsors: Amazon.com/ridehome Netgear.com/bestwifi Links: Apple will reduce App Store cut to 15 percent for most developers starting January 1st (The Verge) 'Fortnite' now offers Houseparty video calls on PC, PS4 and PS5 (Engadget) Robinhood Seeks Advisers for Potential IPO Next Year (Bloomberg) Marissa Mayer wants to clean up your contacts, and that’s just for starters (Fast Company) Beats debuts new glow-in-the-dark Powerbeats, available from Apple starting tomorrow (9to5Mac) Beats launches a glow-in-the-dark pair of Powerbeats for $200 (The Verge) Yubo could be the next big social app as it raises $47.5 million (TechCrunch) Not Dead Yet: News Site Mistakenly Runs Dozens of V.I.P. Obituaries (NYTimes) Tonight's bonus episode taping. 9pm eastern. 6pm pacific. https://zoom.us/j/91680804823 Meeting ID: 916 8080 4823 Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Wednesday, November 18th, 2020. I'm Brian McCullough. Today, the App Store has been cracked open just a bit. Apple will cut its vigorous in half for most developers, although not the ones that make Apple the most money. Robin Hood is probably going to join the cavalcade of IPOs. Marissa Mayer is back, and the biggest social network you've probably never heard of is coming from France. Here's what you missed today in the world of tech. We wondered if and when Apple might blink, and it seems that they just did. Apple announced early this morning that it will reduce its App Store cut from the traditional 30% to only 15% for any developer that earns less than $1 million per year in revenue

from their apps in the App Store. This is starting January 1. App Store Small Business Program is what Apple is calling it, quoting the verge. Developers will be asked to apply for the program, and Apple says it will be releasing more information about that process and other eligibility requirements and deadlines in December. Apple did not elaborate on why it's choosing not to automatically enroll developers into the program, but it's possible requiring that developers enroll may reduce the potential for fraud or other abuses that could arise if Apple simply auto-enrolled everyone below the threshold. Apple did spell out some of the program's rules today. The company says it will look at developer proceeds for the year of 2020 to determine eligibility starting in January.

New developers can also qualify right away for those app makers that exceed the the $1 million threshold at any point in 2021, they will automatically be removed from the program and subject to the standard 30% cut. If a developer falls back below the $1 million threshold in a future calendar year, Apple says they can re-qualify for the program and its reduced commission rate. This isn't the first time Apple has reduced commission rates for certain developers. The company's most recent change of this magnitude occurred in late 2016 when it first began allowing subscription services to keep an extra 15% of revenue if a subscriber stays signed up through an iOS app for longer than 12 months. Apple has also reduced its app store cut or exempted

certain services altogether, as it did for signups to Amazon Prime Video. And more recently, for in-app Prime Video rentals and purchases, but the company often only cuts such deals behind closed doors and has not typically extended those benefits to developers. It does not negotiate directly with, end quote. So one way to read this would be Apple trying to get ahead of all of the antitrust chatter. But their most vocal critics in that regard, the epic games and Tinder's and Spotify's of the world, wouldn't be affected by this change. So maybe the way to look at this is it's an attempt by Apple to appease the legions of indie developers who they've pissed off several times this year as we've discussed. As Steve Trotton Smith tweeted, quote,

Apple reducing its commission to 15% will make a huge difference to small businesses and developers like me and could have ripple effects across the industry and across other platforms. It's a gesture of goodwill that arguably could have come sooner this year being what it was, end quote. And yet, already this morning, I'm seeing a lot of quibbles. For instance, along the lines of why is Apple making folks apply for this program? Dieter Bone has a theory, quote, it's quite a thing that Apple chose to make devs apply instead of just making it an across-the-board cut. I suspect that it's because it would be easy for people to game a $1 million cap system with multiple accounts, so Apple just wants a more direct relationship, end quote. Also, it seems to be structured in a weird way. The 15% is only on the

first million dollars earned, quoting Marco Arment. I'm not sure why they set it up this way rather than like progressive taxation, but you now have a rational incentive to pull your app from the store after it makes $999,99,99, unless you are really sure, it's going to make at least $1,215,000 for this year and next year, end quote. And as Mustafa Hamui tweeted, quote, If I were a developer making $1.8 million a year on the App Store, I now have a strong incentive to divide my company into, each of which is making $0.9 million a year, end quote.

Also, people are pointing out what this really means for Apple dollars and cents-wise. According to Censor Tower, this new move will affect around 98% of developers that pay Apple a commission in the App Store each year. In other words, 98% of devs make less than a million dollars a year in the app store. But obviously, that's the vast majority of all devs that operate in the App Store. And yet, this 98% apparently only accounted for less than 5% of App Store's total revenue last year. So don't think that Apple suddenly is taking a 50% hit to its App Store revenue. Or as Jack Nicas tweeted, quote, Put another way, Apple is keeping its 30% commission on the roughly 2% of companies that generate 95% of its app store revenues, end quote.

Something, something, a whole bunch of companies dashing towards IPOs, although this one is aiming for Q1 of 2021 and everyone else is trying to get out the door before the end of the year. Sources are saying Robin Hood is asking banks to pitch for roles in an IPO that it intends to run early next year, quoting Bloomberg. Robin Hood raised an additional $460 million in a Series G funding round, lifting its valuation to $11.7 billion, the company said in September. Robin Hood's investors include Sequoia, DST Global, Ribbett Capital, and Andreessen Horowitz, index ventures, and D1 Capital Partners. An IPO would follow a huge boom and volume on the platform with stay-at-home orders during the coronavirus pandemic driving up retail trading. Robin Hood has also tapped into a new demographic, Millennial and Gen Z traders. Robin Hood has 13 million accounts on its platform, which allows for trading in options, gold and cryptocurrencies, as well as equities and funds, end quote.

Marissa Mayer is back. So is her longtime colleague Enrique Munoz Torres. The Google and Yahoo vets are launching an app called Sunshine Contacts, an AI-powered contact organizer app for iOS, quoting Fast Company. Typically, contacts are littered in a few different places, says Rohit Chandra, Sunshine's VP of Engineering, and a former colleague of Mayor and Munoz Torres' at Yahoo. Quote, they'll be in your iPhone, they'll be in your email, and maybe Google contacts, and with some of them, the information would just be sitting in an email that somebody may have sent to you.

If I'm trying to reach out to somebody, it becomes my job to figure out where the latest information is and what's accurate. It's a headache that all of us have, end quote. If someone's current, complete information is actually within easy reach, it can feel like a little miracle. Sunshine Contact's aim is to make it an everyday reality, and its approach follows the model set by Google's search engine. back when mayor was one of the people figuring out how it should work. On the surface,

there's an approachable streamlined interface. Beneath that, AI and other forms of computer science are working hard to find and organize vast amounts of information. Contact management might not sound like an idea with the potential to become the next Google or Yahoo. That's because Sunshine Contacts is just the first app in what Sunshine's co-founders envision as a large portfolio of offerings. Quote, from the get-go, we're thinking about a strategy and a product line that, if executed correctly, we believe should lead to us scaling beyond a relatively trivial number of users, says Munoz Torres, and over time, really having an impact at the scale that we've seen in previous places, end quote.

Fortnite now offers House Party video calls on PC, PS4, and PS5. Users need to have the House Party app installed on an iOS or Android device, which they can then use as a sort of functional webcam. That might seem like a convoluted way to do things, but at the same time, given how social Fortnite gaming is, maybe this is really the easiest way to go. Everyone's got a device on hand, right? Quoting Engadgett. The integration is clearly meant for close friends and families.

The groups you would normally organize in private parties or Discord servers rather than superstar streamers. House Party has recognized the possible privacy implications. The company has emphasized that the House Party service is restricted to people over the age of 13. And only your House Party friends, as well as the friends of anyone in the room, will be able to join your call. You can also block people, and if you want to cap the number of participants, hit the lock button at any time. Finally, every webcam feed will be cropped around the player's face and given a colorful background. What about other platforms such as Xbox and

Nintendo? For now, they're incompatible, quote, we will let everyone know if we're able to support more platforms in the future, the Fortnite team said in a press release, end quote. It has debuted a new glow-in-the-dark version of its Powerbeats wireless headset, which is available from Apple beginning today, running you $200 bucks, quoting 9-5 Mac. The new Powerbeats were designed in collaboration with the lifestyle brand Ambush, making this release the first official collaboration between Ambush and Beats and the first glow-in-the-dark beats product. In terms of features and functionality, these are the same powerbeats that users have grown to love.

They feature a wireless design with a connector cable between, each earbud. Most notably for Apple users, the power beats feature Apple's H-1 wireless chip for Hey Siri and support for the new automatic device switching features in iOS 14 and MacOS 11 Big Sur, end quote. Quoting from the verge, the glowing power beats could prove useful for runners out on the street in the dark. They're the first glow-in-the-dark product that Beats is made. Yun-Anne, Ambush's co-founder and creative director, said she was inspired by Tokyo's energetic nightlife when working on the project with beats. Quote, I live in the middle of Shibuya, and I am always inspired by how the city just glows at nighttime,

she said. I thought it would be really cool to design a product that could capture that same city energy when you're outside late at night listening to music, end quote. This is an interesting raise that could end up being hella interesting because it might end up being the next big thing in social media. The biggest social network you might not be aware of is probably Yubo, a French social app with more than 40. million users. They've announced a 47 and a half million dollar series C led by existing and new investors, including Iris Capital and Gaia Capital Partners, quoting TechCrunch. With a focus on younger people under 25, the company has managed to attract 40 million users, a fraction of them hang out every day

in live streaming rooms, meet new people, and spend money for more features. That's right, the company isn't betting on ads. You can pay to unlock items or subscribe to the app. Ubo expects to generate $20 million in revenue this year. That's twice as much revenue than it generated in 2019. It's a social media app that wants to reverse the current trend of social networks. You can't follow other users. You can't like content. As we've seen many, many times in the past, once you introduce a following feature,

the ability to like, and algorithmic recommendations, your social network becomes a virtual stage. A tiny portion of your user base performs on that stage. The vast majority consumes content. influencers emerge and monopolize your attention. We've seen that trend with Vine, Instagram, YouTube, Twitter, TikTok, even LinkedIn. Yubo isn't looking for performers. The company wants to help you meet other people, play games, hang out, and create new friendships. In many ways, it feels like a way to hang out with teens that don't attend your high school. When you open the

app, you get a list of rooms that you can join. Users can live stream from their phone and chat with other users. You join rooms depending on what you're looking for, local people, people talking about politics, people playing games, etc. Once again, the idea isn't to create a giant room with a handful of performers and tens of thousands of viewers. There's no tipping mechanism, so it's not like Twitch. In 95% of rooms, there are only streamers. Rooms have between five and 10 people on average, co-founder and CEO Sacha Lazzimi told me. You can add people as friends and chat with them in the app. In addition to rooms, you can find new friends by swiping left and right on profile pages in interaction borrowed from Tinder. We had 25 million

registered users in December. Today we have more than 40 million users, Lassimi said. Most users are based in the U.S., the UK, Canada, Australia, and France. And engagement has been going up as well. The number of hours spent in live rooms is up 400% year over year. With in-app purchases and subscriptions, you get additional features. For instance, you can boost your live stream, promote your profile on the swipe page, or feature your profile at the top of the online section. It's a way to get more people in your room, receive messages from more users, and have more interactions in general. We think it's the future of monetization for social platforms. If you focus on ads, you're competing with Facebook, TikTok, and Snap, Lazimi said, end quote. So see my question yesterday about how

something like this can scale. Ubo stresses that it is investing heavily in real-time moderation processes. In fact, Yubo says it spends a third of its money investing in moderation right now. Yubo even checks your ID when you sign up in order to confirm your age. And you know, this does remind me more of IRC channels from the 90s than it does anything else, but there's a fine line between that and a chat roulette-style flameout. So we'll be interesting to see if this gains more traction. And then if it does, everything old is new again. Finally, today, while a French social media up-and-comer would be interesting, let's stay in France for something a bit embarrassing. If you work in digital media, then you're used to wrestling with content management

systems. CMSs can be maddeningly complex and idiosyncratic. Tell that to Radio France International, which accidentally published about 100 pre-written obituaries for prominent people. The blame? It was in the midst of moving its site to a new CMS, according to the station, quoting the New York Times. For a brief moment this week, startled readers of a French news site had to grapple with the apparent demise of Queen Elizabeth II of England, Pelae, the Brazilian soccer legend, Clint Eastwood, Brigitte Bardot, and dozens of other celebrities and world leaders. As it turned out, the website of Radio France International had mistakenly published about 100 pre-written obituaries for prominent figures. Several hours after the obituaries ran on Monday,

the public radio station, which broadcasts in France and abroad, apologized and started taking the reports offline. It said unedited drafts had been accidentally published as it moved its website to a new content management system. Online platforms like Google and Yahoo News, then automatically picked up some of the articles. The radio station said in a statement that it wanted to, quote, apologize first and foremost to those concerned by the obituaries and who might have been hurt by the premature announcement of the deaths, end quote. If you're unaware, it is actually very common in media to pre-write or at least pre-research obituaries for folks you think are, shall we say, likely to die in the nearish future. But obviously, accidentally publishing them ahead of time,

is not the idea. As Stephen Belevin tweeted, people can make mistakes, but it takes computer assistance to make mistakes at scale, end quote. Once again, office hours with Chris Messina, inventor of the hashtag,

and all around product development and product launch guru, are tonight at 9 p.m. Eastern, 6 p.m. Pacific. Link to the Zoom meeting are in the show notes. Remember, we are going to record video. So hope to see you all then. By the way, I never did post the video of the listener Colin episode to the YouTube channel, but I hope to have done that by this afternoon.

By the time you hear this, talk to you tomorrow.