Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Rebecca Zisser/Axios

After years of grudgingly handing over as much as 30% of their mobile revenue to Apple or Google, some app makers and digital service providers are exploring ways to cut out the middlemen.

Among the recent examples: Epic Games is distributing Fortnite for Android outside Google's Play Store. Netflix is testing the removal of the ability to subscribe from within its iOS apps. Spotify, which once offered a discount to iPhone customers who subscribe outside of the app, has discontinued the ability for new subscribers to pay via the app.

The bottom line: Apple and Google make big bucks off their cut of subscriptions.

  • Sensor Tower estimates that Apple, for example, made $85 million in the first half of 2018 from those subscribing to Netflix, $26 million from Pandora subscribers and $15 million from those purchasing Hulu.
  • Google, it estimates, made $17 million off Pandora subscriptions and $14 million from those subscribing to Netflix, over the same period.

Be smart: While selling virtual goods doesn't carry the same expenses as operating a brick-and-mortar store, there are still some costs to Apple and Google. Credit card fees are the most notable hard cost, along with the costs associated with hosting the app stores and delivering digital content.

And, while there are savings to be had, there are other costs associated with cutting out the app store.

  • With Apple, it's a simple dollars and cents equation. Does the increase in sales you get offering subscriptions or content sales in the app offset the cut you have to give to Apple? And if what you are selling is the app itself, there really is no choice — there isn't any way to get around Apple's App Store if you're distributing iPhone apps.
  • On Android, it's more complicated. There are plenty of options to go around Google, but doing so requires missing out on the most widely used method for getting apps — and it also requires users to turn off a security setting that helps stop malware.

History lesson: It's not like anyone likes handing over 30% of sales to Apple or Google. Still, most of the industry has just adjusted to this as the cost of doing business. But not everyone: Amazon, for example, pulled the ability to buy books from its Kindle and Audible audiobook iOS apps in order to avoid having to give a cut to Apple.

What they're saying:

  • Startup investor/adviser Steven Sinofsky tells Axios that Apple and Google don't just distribute apps, they created the ecosystems, curate the stores and help spur demand. And the option to go around those stores, he noted, is rather limited. "Just because Fortnite or Amazon do it does not mean the newest game has, or should have, the same leverage."
  • "It feels like something bubbling up here. The dollars are just getting so big. They just don’t want to be paying Apple and Google billions," Macquarie analyst Ben Schachter told Bloomberg, which raised the issue in a story Wednesday.

Go deeper

Updated 3 hours ago - Politics & Policy

Report: Pentagon watchdog finds Ronny Jackson drank on duty and harassed staff

Rep. Ronny Jackson walking through the Canon Tunnel to the U.S. Capitol in January. Photo: Stefani Reynolds/Getty Images

Rep. Ronny Jackson (R-Texas) allegedly made "sexual and denigrating" comments about a female staffer, drank alcohol and took sleeping medication while working as White House physician, according to a report obtained by CNN Tuesday night.

Driving the news: The Department of Defense inspector general's report stems from a years-long investigation. Jackson has called the allegations "false and fabricated."

DOJ pressed to enforce Al Jazeera foreign agent ruling

Illustration: Aïda Amer/Axios

The Justice Department is being pressed to enforce its own demand that the U.S. arm of Qatari broadcaster Al Jazeera register as a foreign agent.

Why it matters: The launch of Al Jazeera's new right-of-center U.S. media venture, Rightly, has refocused attention on the media company's alleged links to Doha, and DOJ's efforts to crack down on media outlets viewed as foreign interest mouthpieces.

Poll: Immigration is America's most-polarizing issue

Data: The American Aspirations Index/Populace; Chart: Will Chase/Axios

Immigration was found to be the most polarizing issue in America based on new polling from Populace.

Why it matters: Americans have surprisingly similar priorities for the U.S., but immigration stands out as one of the few issues with clear partisan differences. It underscores the challenge for advocates and lawmakers hoping to pass immigration reform in the coming weeks amid narrow margins in Congress.