Facebook Will Help Users Get Around Apple’s Transaction Cut

Facebook is setting its sights on the creator economy, hoping to enable millions of people to make a living from its family of apps.

But the company wants to promote offline transactions between creators and companies to avoid cutting 30% of Apple’s in-app purchases, Instagram chief Adam Mosseri said on Wednesday.

“When there are digital transactions that happen on iOS, Apple insists that they take 30% of that. There are very few exceptions. For transactions that occur on iOS, we will have to abide by their rules … but generally, we will look for other ways to help creators earn a living and facilitate transactions that happen elsewhere, “Mosseri told” Squawk Box ” from CNBC.

“So, for example, if we could help brands and creators examine and find each other, they could take those transactions offline. For affiliate marketing, they are real goods, not digital goods. in places where creators can really earn a living on a stable basis, “he added.

Apple typically earns a 30% commission on purchases of software or digital app products distributed through the App Store. That would mean that the creators would eventually have to split the revenue from the goods sold within the app between themselves, Facebook, and Apple. (Facebook hasn’t said how much cut will be needed, but said it will be less than 30%.)

To avoid that, Instagram could pressure creators to connect offline with brands or others, in an effort to make money off the iOS operating system. It will be a key issue for the company, which has spent the last few years fighting Apple.

The fight for creators is intensifying, with social media companies courting creators to spend more time on their platforms in order to generate more ad revenue. But creators currently have a say in where they want to spend their time, which is why social media companies are increasingly trying to attract influencers in a way that could eventually be beneficial to both of them.

Companies are introducing things like earning marketing commissions, direct tips, and subscription content.

“If we are going to be the best home for online creators, we will have to offer a suite of these types of monetization products because there is a lot of competition and it is heating up quickly,” Mosseri said.

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