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Web downloads and alternative marketplaces

The future or doomed to failure?


With the Digital Markets Act (DMA), the European Union has passed a law that is intended to ensure fair and open digital markets and to which the App Store must also adhere in future.


One of the changes is that the App Store will have to allow 'side-loading' via other marketplaces (so-called alternative marketplaces) and via the web in future. What many app developers have wanted for years is now actually happening, at least in the EU.  


Smartphone gets apps from various different sources.
Alternative marketplaces and web downloads.

But before you shout 'hurray', the most important thing first: web downloads are only permitted for apps that have generated over 1 million (!) downloads in the EU in the last calendar year. And the hurdles are also quite high for alternative marketplaces. The new options are therefore unlikely to play a role for most providers... But first things first.


Anyone who wants to continue to distribute their apps in the EU via the App Store can of course do so. Anyone wishing to offer web downloads in the EU must meet the following requirements:


  • App Developer Account within the EU

    • You must have an Apple Developer Account that is based in the EU. This should be the case for most local providers.

  • Member of the Apple Developer Program for at least two years

    • Your account must be at least two years old. This means that the option is not available for new app developers.

  •  Over 1 million downloads in the last calendar year in the EU

    • Web downloads are only permitted if you have recorded over 1 million initial iOS downloads of your app in the past calendar year. This excludes most accounts.

  • Only apps from the Developer Account

    • You may only offer web downloads if you also 'host' the app in question via the App Store Developer Account.

  • The website must be operated by the app provider and registered in App Store Connect

    • This means that you cannot distribute your apps via several websites, but only via your own websites.

  • New terms

    • You must accept the new terms and conditions for the EU. I have summarized the changes this entails for you in this post.


We note: Providers who actually exceed the 1 million download mark and also meet the other requirements are allowed to offer web downloads via their own registered website in future.

Also if you want to distribute your apps via alternative marketplaces, there are a number of requirements. For example, you must first check and accept the terms and conditions of the marketplace provider before you can set up a connection in App Store Connect. Then you need a security token to be able to 'connect' the alternative marketplace. The biggest problem is probably that there are hardly any alternative marketplaces to date.


Will web downloads and alternative marketplaces prevail? My conclusion.


Ultimately, customers will decide which channels they use to download apps and not the European Union. In my view, the primary factors influencing customer decisions are 'trust', 'convenience' and 'variety'.


Trust

The App Store enjoys a high level of trust that has been built up over many years. It will be extremely difficult for alternative sales platforms to make up for this trust.


Convenience

Being able to download all apps within an 'eco-system' so that they work smoothly on different devices and interact seamlessly with numerous additional features is a huge advantage.


Variety

All apps in one place. Anyone who switches once and doesn't find what they are looking for will quickly return to their usual marketplace. It will take a very long time for alternative marketplaces to build up a similar portfolio.


In short: If an alternative marketplace has no more or better to offer than the App Store, customers are unlikely to switch.

From the perspective of new marketplace operators, I am also rather skeptical that we will see many alternative marketplaces. The development costs are too high, the distance to the existing players is too great and it is too difficult to acquire developers for a new platform in the first place. After all, distribution via every additional platform means significant additional work for app developers.


I only see opportunities to enter the market, if at all, through exclusive content, innovative features and lower prices.


Exclusivity

Fortnite only available on a Fortnite website - works. The same applies to strong brands and apps that are so popular that users are willing to use alternative offerings.


Innovation

The App Store has hardly developed at all in recent years - at least on the front end. In my opinion, the last major update was the division into 'Apps' and 'Games' and the introduction of the 'Today' tab, and that was in 2020. And many areas of the App Store are still editorially curated. What if a new provider created a completely new AI-based customer experience? Not searching or browsing, but automatically receiving context-sensitive recommendations. How about voice control instead of app downloads? How about more community features and solutions for the most popular games, all in one place? Yes, that could work. And I'm sure I can think of even more things if I think about it longer...


Price

Price is always an attractive factor, even for developers. More favorable commissions or completely new pricing models (the first X sales are commission-free) should open up another avenue for new marketplaces.


In my opinion, it will be at least another two years before we see alternative marketplaces that could even begin to pose a threat to the app stores. Web offerings will work for large IP, but will hardly change the app business at its core. Given the market opportunity (and potential threat), I assume that the big players are already working on new ideas or will buy them in.


What do you think about the whole thing? I am very keen to hear your opinion on the subject.



 

All content in this article has been researched and compiled from public sources. If any errors have crept in, please let me know so that I can correct them.






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