Apple's App Store is quietly a major source of the company's revenue. Every time an iPhone user subscribes to a service through Apple's billing platform, the Cupertino giant skims up to 30 percent off the top of each recurring charge. The practice has been so brazen that a court ruled Apple must allow third-party billing to be offered, then, last year, the same court found the company in contempt for violating that ruling when it charged developers a comparable fee to implement their own billing tools.
But app developers had already adjusted to Apple's fee skimming long before the court case was decided. Rather than eat a 15-30 percent loss on subscription revenues, many developers simply offset those costs by charging customers more when they subscribe through the App Store. A service that might be $10 when you subscribe on the company's website becomes $13 when you subscribe on the App Store. It's a phenomenon that's become known as the "Apple tax."
YouTube Premium is a prime example. We've noted that some users can swap existing music subscriptions for YouTube Premium, but it's a different story when subscribing through the App Store. Indeed, when we look at pricing for YouTube Premium, we can see Google charging an Apple Tax. When subscribed to through the YouTube website, the monthly subscription cost for an individual is $16. However, head to the App Store, and the price tag increases to $21 a month. That's $5 leaving your wallet each month for no reason other than helping Google to cover Apple's tolls, making it much harder to get your money's worth from YouTube Premium.
Some people prefer to bill their subscriptions through Apple's App Store because of how predatory first-party billing can be. Once you give some companies your credit card information, it can be nearly impossible to get them out of your pocket. After digging around in settings menus to find the "cancel subscription" button, which appears deliberately hidden like Waldo, you're made to go through three confirmation screens, presented with a special, one-time-only discount offer, and then made to fill out a survey explaining why you want to cancel. And that's if you're lucky. Some subscriptions from smaller outfits will make you send an email, or you might resort to replacing your credit card in order to stop the subscription from being charged.
There may be situations where paying an Apple tax on your subscriptions is worth a few extra dollars for the peace of mind that comes with the ability to cancel them in just a few taps on your smartphone. Apple would love to keep collecting its fees from your subscription, but the company also wants you to enjoy using your iPhone and is therefore not as straightforwardly incentivized to act like a gremlin with your credit card.
Even so, it's worth saving money where you can. Thankfully, YouTube Premium makes it reasonably easy to cut off a subscription on its own billing platform. Canceling is a relatively straightforward process, and Google won't give you much guff about your decision to stop giving it money. If you're currently overpaying for YouTube Premium through the App Store, or if you've been considering signing up for the service, you're better off doing so away from the tax collector at Apple's walled garden gates.
