In a recent post, Elon Musk, the CEO of X, revealed his intention to engage in a conversation with Apple’s CEO regarding the revenue-sharing model on the App Store. Currently, Apple takes a 30% cut from subscription revenue and one-time sales made through the platform in the first year. Afterwards, this cut drops to 15%.
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Musk’s concern with the existing system is that the fee is deducted from the total amount earned by creators on X. He proposes a different approach, suggesting that Apple should deduct this cut from the money X itself makes off creators, rather than from the creators’ total revenue.
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Rare exception for X on the App Store
Notably, Apple recently granted an exception to X by allowing it to use the single character “X” as its app name on the App Store. Nonetheless, convincing Apple to reconsider its revenue-sharing strategy might be a much more challenging endeavour for Musk. This proposed change could potentially alter Apple’s entire business model concerning app revenues, making it a hard sell to Apple’s leadership, such as Tim Cook or Eddy Cue.
Changes in X’s revenue model
Musk also outlined some modifications to X’s revenue model. Going forward, the company plans to reduce its share of revenue from creators to 10% after the initial 12 months, but only when the creators’ payouts exceed $100,000.
Overall, Musk’s proactive stance on discussing revenue-sharing and his efforts to improve X’s revenue model demonstrates his commitment to fostering a fair and mutually beneficial environment for creators and platforms alike. Yet, it remains to be seen how Apple will respond to his proposals and whether they can find common ground on this matter.
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