Photomyne: How Much Of The Price Is Left After Apple, Google, And Direct Billing
This follow-up isolates the fee spread between Apple, Google, and direct billing. As of the report date, only 7% of Photomyne’s app subscribers were coming through its website and portal, so the economics are real, but not yet large enough to reset the income statement on their own.
What This Follow-Up Is Testing
The main article already identified platform tolls as the active bottleneck. This follow-up takes that argument one step further: how much of the price actually stays with Photomyne after Apple, Google, or direct billing, and how much of that already shows up in the 2025 numbers.
The short answer is sharp. The fee gap is very real, but it still has not changed the structure of the business. On the direct route, the company can move from app-store fees of 15% to 30% to a basic processor range of 2.9% to 4.9%, before the fixed fee and before certain cross-border or FX add-ons. That is a spread of dozens of percentage points. The problem is that as of the report date only 7% of the company’s app subscribers were coming through the website and portal, while 84% were still coming from App Store and another 9% from Google Play.
That is the core point. Payment can leave the store, but most users still have not. So even if direct billing is economically better, Photomyne is not yet at the point where direct billing alone can clean up the income statement. At the full-year level, platform-use costs reached $4.738 million, but advertising expense reached $11.566 million. The store is one layer of friction, not the only one.
There is another important qualifier. The new U.S. economics are not fully locked in. Apple opened the door in May 2025 to external purchase links and buttons without an added Apple commission, but in December 2025 the U.S. appeals court sent the question of a “reasonable commission” back for further determination. Google, for its part, stopped charging commission in October 2025 on U.S. purchases through external links, but the company says Google has already signaled an intention to impose a partial commission later on. So the opportunity is real, but the framework is still not fully settled.
The Fee Gap Is Real, But Not Yet Locked In
The annual report gives a fairly clear picture of the subscription fee ladder. On Apple, a subscription in its first year carries a 30% fee, and from the second year onward it falls to 15%. On Google, subscriptions are presented at 15%. On the direct route through the website and portal, payment runs through processors at a basic range of 2.9% to 4.9%, with a fixed fee, and with a possible additional 0.5% to 2% for certain international transactions or FX conversion.
What matters here is not only the level of the fee, but its shape. On Apple, the gap between a first-year subscriber and a mature subscriber is 15 percentage points. That means retention and longer subscription life already reduce the toll even before the user is pushed to the website. The direct route offers an even bigger spread, but there the company also has to get the user to pay outside the store, preserve a smooth checkout experience, and comply with Apple, Google, and processor requirements.
The U.S. angle also needs to be handled carefully. North America produced $11.877 million of revenue in 2025, almost 70% of the total. The company does not break out the United States inside that figure, so the immediate exposure to the new U.S. rules cannot be quantified precisely. Even so, this is clearly not a marginal market, which is why the U.S. rule changes matter for the economics of the subscription model.
Payment Can Leave The Store, The User Mostly Hasn’t
This is where potential and current reality diverge. As of the report date, 84% of the company’s app subscribers were coming from App Store, another 9% from Google Play, and only 7% from the website and portal.
The revenue layer is still heavily tilted to Apple as well. The company defines Apple as its material distribution platform and says about 81% of total revenue comes from end-user purchases on App Store. Google accounts for about 7% of revenue. At the same time, the stores still control version review, ranking, in-store featuring, and the ability to suspend or remove an app. So a shift to direct billing does not remove platform dependence. It only tries to cut the fee layer and strengthen the direct relationship with the user after the user has already arrived.
That distinction matters because it explains why the direct route is an economic improvement move, not a full escape from the platforms. Photomyne still depends on Apple and Google as discovery gates, operating gatekeepers, and platforms that can affect exposure and income generation. If the store changes policy, delays an update, or limits visibility, external billing does not solve that.
Why The Savings Still Do Not Flow Cleanly Into The Income Statement
In 2025 Photomyne reported $17.010 million of revenue. Of that, $15.801 million, about 92.9% of total revenue, came from app activity. In other words, store economics and subscription economics are not a side issue here. They are almost the whole business.
The other side of the equation shows up in cost of revenue. Platform-use costs stood at $4.738 million out of total cost of revenue of $5.404 million. In other words, about 87.7% of cost of revenue sits inside the platform layer. That is why the company sees the direct route as a genuine profitability lever.
| Core 2025 layer | USD million | % of revenue | Why it matters |
|---|---|---|---|
| App activity revenue | 15.801 | 92.9% | Most of the business still sits inside the subscription and store model |
| Platform-use costs | 4.738 | 27.9% | This is the main toll the direct route is trying to cut |
| Advertising expense | 11.566 | 68.0% | This is the next bottleneck even if the fee burden falls |
| Gross profit | 11.606 | 68.2% | Still not enough to cover the marketing layer |
But this is also where the picture becomes more complicated. Selling and marketing expense reached $12.641 million, and $11.566 million of that was advertising. So even if Photomyne succeeds in shifting more users to direct billing, it still has to deal with the fact that user-acquisition cost remains enormous.
That chart needs to be read carefully. It does not mean every new dollar of revenue is burned immediately, because the company itself explains that in a subscription model the payback on marketing spend is not immediate, and subscription renewals generate cash receipts over time without the same level of reacquisition spending. But it does say something else very clearly: cutting the platform fee alone will not close the gap in the income statement as long as the advertising layer remains almost as large as the whole revenue base.
That is also why the strategic presentation puts things in the right order. Photomyne does not present direct billing as the first growth engine. It places it inside the stage of moving from investment to cash-balance. In the slide, brand exposure comes first, then the onboarding and conversion path to a paying subscriber, then retention and LTV expansion, and only then the use of payment methods with lower commission than the app stores. In other words, management is implicitly saying that the real payoff from direct billing depends first on retention, brand, and the company’s ability to keep the user engaged long enough for the economics to matter.
What Has To Happen Next For The Direct Route To Really Change The Story
The most important number here is not 30% and not 15%. It is 7%. As long as only a small share of subscribers comes through the website and portal, Photomyne is benefiting more from the potential of the direct route than from its actual weight in the mix.
For the move to really change the company’s economics, several things need to happen together. First, the direct route needs to become materially larger in the subscriber mix, not just something the company says is important for profitability. Second, onboarding and conversion have to remain strong enough that shifting users away from store billing does not hurt purchase flow or renewal behavior. Third, the fee savings cannot be fully absorbed by higher advertising spend or by incentives needed to persuade users to pay outside the store. Fourth, the U.S. regulatory relief has to remain stable enough for the company to build on it.
That is exactly why this follow-up matters to the Photomyne thesis. The company is already pointing in the right direction on two fronts: a stronger direct relationship with the user, and cheaper payment rails. But as of the report date this still looks like an economic improvement lever inside the existing model, not a business-model inversion. App Store remains the main gate, Google the secondary gate, and the direct website route is still relatively small.
Conclusion
Photomyne is not wrong to identify direct billing as a profitability lever. With fee spreads of 15% to 30% in the stores versus 2.9% to 4.9% in direct processing, before certain add-ons, there is real money on the table. The problem is that this money still does not sit in the right place in the mix.
As of the report date, most subscribers were still coming through the stores, Apple alone was still responsible for the large majority of revenue, and advertising expense was still heavy enough to absorb much of the savings even if part of the move to the direct route succeeds. So the meaning of the direct route today is not that the company has solved its subscription economics. It is that it has opened a more profitable path for each user it can get to pay directly and retain over time.
If over the next two to four quarters the direct route begins to rise materially without hurting renewal behavior, and if platform costs start to decline as a share of revenue, the read on Photomyne can change quickly. If not, direct billing will remain a correct idea with too little weight.
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