In a twist, Apple claims 30% of donations to teachers of its Insight Timer meditation app

The CEO of the meditation app Insight Timer, Christopher Plowman, is disappointed. He doesn’t believe teachers who leverage his in-app purchases to reach their students should share 30 percent of their revenue with Apple — its commission for in-app purchases — and for the past 12 months, Apple has also agree. After Apple relaxed its rules on in-app donations in 2022, Insight Timer took advantage of the option to customize a digital donation feature that allowed Insight Timers teachers to collect “tips” from their user profiles and during live events . Apple has reviewed the app and approved its release on the App Store. Now the tech giant has changed its mind — it wants to collect a commission from that content, and Insight Timer had no choice but to comply or shut down its iOS business, Plowman says.

The issue here is somewhat complex, but it highlights the challenges developers face navigating today’s App Store and its ever-growing set of rules, which are often open to misinterpretation by both app makers and Apple’s app reviewers. Instead of pairing a representative to work with a subset of Apple’s developer customers—the app makers who help Apple generates huge profits from its Services division — Apple App Review is often a win-or-lose process where a rogue reviewer can reinterpret Apple’s policy differently than others, upsetting a developer’s entire business in the process.

This was the case with Insight Timer, a popular meditation app with approximately 25 million installs and 3 million monthly active users. Like many App Store businesses, Insight Timer generates revenue by selling subscriptions. In 2023, he earned about $20 million in subscription revenue, with one-third of that (30%) paid to Apple, according to commission guidelines.

However, the company also offers a donation feature that allows customers to tip their favorite meditation teachers to thank them for their time and effort.

“Our teachers are very involved in our community. They spend a lot of time answering questions, recording video responses and audio responses and things like that,” explains Plowman. When Apple added a new rule about donations, the CEO realized he could take advantage of the option to supplement teachers’ income with larger digital tips. Because Insight Timer doesn’t take a cut of user donations to favorite teachers, those donations shouldn’t be subject to Apple’s commission — or so Plowman believed.

At the Department 3.2.1 of Apple’s App Review Guidelines, the company explains that apps can trigger Apple’s in-app purchase if the app allows individual users to “give a monetary gift to another person” and “100% of the money” goes to the recipient of the gift. Insight Timer leveraged this option to allow its users to tip meditation teachers, healers, musicians, and others who use its app to teach classes on meditation, stress management, finding happiness, or spiritual enlightenment, and more. Insight Timer implemented the feature using Stripe as a back-end payment provider, as allowed by the rule.

Users can choose to donate money to the teacher, but they don’t have to. Insight Timer’s main business is selling premium subscriptions to its app, which offer additional features such as offline listening, calendar recording, and unlimited access to its lessons. Fifty percent of that revenue is shared with the teachers, so they don’t have to rely on donations to fund their work. During the time the commission-free donation feature was live, Insight Timer users gave about $100,000 a month to the app’s teachers, Plowman says.

Apple appeared to have blessed this use case, as the tech giant went on to approve 47 more updates to its Insight Timer app over a 12-month period. When a question arose, Insight Timer explained that these were donations — no cut of that revenue required — and Apple would approve the app.

Image Credits: Insight Timer

Late last year, those approvals stopped. One app reviewer told Insight Timer that these donations were no longer considered monetary gifts — they were now “digital content.” This meant that they were now subject to Apple’s procurement. This decision does not harm the results of Insight Timer, since the main activity of the application is subscriptions. Instead, it hurts the community of educators who generate additional funds through user donations. Now, with Apple demanding 30% of that revenue, teachers are taking a 30% pay cut overnight, so to speak.

Plowman says he’s been going back and forth with Apple about this feature, trying to figure out why the donation option Apple previously allowed — 47 times! — was now subject to commission. Apple compromised and said it would allow the donation link on teachers’ profiles to be subject to its no-commission rules, but all other donations — from live events, from meditations — had to be commissioned. It would not allow these links to point to the donation link on teachers’ profiles.

“And I thought, well, what’s the point of having an ice cream parlor across the street if you’re not going to let customers cross the street to buy the ice cream?” argued Plowman.

In the end, the two parties did not reach any solution. Plowman has been given until February to comply with Apple’s decision or his business will be banned from the App Store.

He expressed his frustration this week a LinkedIn post where he calls on Apple’s leadership to change, but without the usual vitriol for Apple critics like Epic Games and Spotify when they argue against the App Store’s procurement structure.

“Well, in the end, I agreed,” Plowman told TechCrunch in an interview. “I don’t want to fight Apple — I don’t choose to fight Apple. I think this problem is largely due to regulators not stepping in. Apple is a public company, but it has shareholders — it does what it’s allowed to do,” he says.

Plus, Plowman adds, his company has 100 employees. He has investors. (It has raised about $30 million over the past 10 years since Evolve Ventures, Altos Venturesand Bridge Builders Partnership.) He has no choice but to comply.

Plowman believes the issue with changing Apple’s interpretation of its own rules is just one of the problems with the current supply model.

More generally, Apple’s rules are vague about what is and isn’t digital content.

“If I’m a teacher, sitting in front of a computer screen and conducting a workshop, those are my billable hours. This is like an Uber driver giving someone a lift or someone renting out their house,” he said. Apple told him if the monetary gift was a one-to-one donation, then it is commission-free, but once the teacher runs a workshop with at least two people, it becomes “digital content.”

“Apple says iPhone users and App Store users are Apple customers. And, fair enough, we can say that. And on this basis, [Apple] he says he’s entitled to take commissions when he sees fit,” says Plowman. “But in that case, why don’t companies like Airbnb and Uber pay Apple anything? . . . If I’m an Insight Timer teacher . . . why do I have to pay 30%?” he asks.

Apple has not returned a request for comment at this time.