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Legacy apps must comply with Apple's App Store subscription rules by June 30 - Page 6

post #201 of 257
Quote:
Originally Posted by Menno View Post

Go look at Netflix's costs before you try talking about things you don't understand, ok?

Netflix's net income is NOT GREATER THAN 30%. Heck, their GROSS profit is only 37%.

Apple wants 30% of the REVENUE, not 30% of the PROFIT. Even Apple couldn't sell that one to anybody. Just saying.
post #202 of 257
Quote:
Originally Posted by Sacto Joe View Post

Again, not even wrong. There's a difference between the subscription service deal and the ebook reader deal. You're concatenating them. Yes, a subscription service, as in a MAGAZINE subscription or some such, will need to be run through Apple. That's not the same as a Kindle reader, which only needs to remove the link through to Amazon's website.

That's what I thought. The press release was ambiguous. But according to the guidelines it applies to any app that can read or play content from any source regardless of whether it's purchased content or subscription-based. So Amazon's Kindle app would be required to provide in-app purchases via Apple's system.

This is the specific guideline:

"11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions."
post #203 of 257
I think people are missing the point that this is 30% off the gross transaction not the net. Even Uncle Sam doesn't tax you on the gross.. you get to offset your costs first. This is on top of every arrangement the publishers have already made to procure their content. In some cases giving apple 30% of the gross my put a company in the red on the deal. This is not like selling an app in the app store. I can accept 30% there as I don't have an iPhone app for sale anywhere else and it is a closed market. I'm paying to distribute my app and I get some benefits of marketing in the app store which is worth 30%. Content is so differently structured and is available in so many different forms that having one distribution channel dictate how you price and utilize the others is just plain wrong. Especially after the others have long been established and your contractual obligations structuring your costs have long been in place.

What next? does ebay have to give a cut? skype? amazon on their other items? if a third party does a mash up using APIs does that put the Amazon or Ebay on the hook even if their official apps are clean?
post #204 of 257
Quote:
Originally Posted by Sacto Joe View Post

They have that right.



No, it will cause Amazon to rewrite their app so it doesn't click through to their web site. BFD



Not even wrong. People can still buy through Amazon directly, then download the book to the Kindle reader. They just won't be able to click in the reader to get to the web site.



Again, not even wrong. There's a difference between the subscription service deal and the ebook reader deal. You're concatenating them. Yes, a subscription service, as in a MAGAZINE subscription or some such, will need to be run through Apple. That's not the same as a Kindle reader, which only needs to remove the link through to Amazon's website.



This is not true. Ereaders that don't link to websites won't have a problem.



11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected

11.12 Apps offering subscriptions must do so using IAP, Apple will share the same 70/30 revenue split with developers for these purchases, as set forth in the Developer Program License Agreement.

11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

11.14 Apps that link to external mechanisms for purchasing content to be used in the app, such as a buy" button that goes to a web site to purchase a digital book, will be rejected

The bolded section is what you should read.
post #205 of 257
Quote:
Originally Posted by tawilson View Post

Apple wants 30% of the REVENUE, not 30% of the PROFIT. Even Apple couldn't sell that one to anybody. Just saying.

You know I agree with you right? Context is everything. Please don't comment on a conversation before reading it.

Cancel that... unless you're trying to imply that 30% of profit is somehow worse than 30% of revenue.. if so, you should go re-read your account textbooks.
post #206 of 257
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post #209 of 257
Try to sell on Android. Oops, you can only sell for free with ads.
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post #210 of 257
Quote:
Originally Posted by fuwafuwa View Post

Try to sell on Android. Oops, you can only sell for free with ads.

EDIT: We're not talking about going from iOS to android. We're saying that this current model makes selling on iOS unprofitable, so even if they DONT GO ANYWHERE ELSE, they'll stop offering an app on iOS. There is NO POINT to offering a service if you lose money by doing so.
post #211 of 257
Quote:
Originally Posted by poke View Post

Here's what Apple says in the App Store Review Guidelines:

11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected

11.12 Apps offering subscriptions must do so using IAP, Apple will share the same 70/30 revenue split with developers for these purchases, as set forth in the Developer Program License Agreement.

11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

11.14 Apps that link to external mechanisms for purchasing content to be used in the app, such as a buy" button that goes to a web site to purchase a digital book, will be rejected


Looks like this would definitely effect Amazon, Hulu and Netflix.

11.13 puts a different complexion on things. It appears to go beyond removing links to external websites. It appears to say that iAP must be part of an app if an app reads purchased content.

That means that starting in June, resellers will be penalized for selling into the iOS market. As a result, content creators will have a huge incentive to sell directly to Apple.

In effect, Apple appears to have just declared war on resellers.

Wow.
post #212 of 257
Quote:
Originally Posted by Menno View Post

The "So What?" comes because Apple is essentially closing off their system more. This WILL cause Amazon and others to stop selling services on their platform, so if someone wants to buy a book on the go they HAVE to go through iBooks.

No you don't. I buy non-DRM'd books from webscriptions and load them into iBooks, Stanza, etc.

As for Amazon leaving, I guess I'd be annoyed if I bought Kindle books and primarily read them on the iPad. However, if that's the case then Amazon is really freeloading since i'm using very little of their infrastructure. The most costly is to develop is the ebook reader.

Quote:
In layman's terms it's a bait and switch. They created an app market and then used that app market to get people to pick up their product instead of alternatives. Now that people have their product, they're making it so publishers HAVE to go through them and not amazon or another service.

Amazon could have pulled the Kindle app at any point so Apple at no point sold the iPad based on the availability of any particular app. The app store will continue to exist.

Quote:
The "SO WHAT" is that this means further locking for those consumers.

Actually looking into it only really impacts Amazon. B&N and Sony both use ePub with Adobe DRM. I believe that the iFlow Reader currently supports that but it is tied to a book store. Still, adding Adobe DRM to someone like Stanza should be possible even if the app price goes up. Optimally iBooks adds Adobe DRM in additon to Fairplay but that'll be a cold day in hell.
post #213 of 257
Quote:
Originally Posted by Sacto Joe View Post

11.13 puts a different complexion on things. It appears to go beyond removing links to external websites. It appears to say that iAP must be part of an app if an app reads purchased content.

That means that starting in June, resellers will be penalized for selling into the iOS market. As a result, content creators will have a huge incentive to sell directly to Apple.

In effect, Apple appears to have just declared war on resellers.

Wow.

Exactly. That's why this is so upsetting to me. After welcoming Kindle, and Netflix, and Hulu, and their users, into the iOS platform, and even advertising their presence as a benefit of the iPad and iPhone, Apple is turning around and asking for an unreasonably high fee to stay in the platform.

I don't really care about Amazon or Netflix or Hulu, though I do like those companies, and their products, which are superior to their competitors, including those provided by Apple. I care because as a user, I bought an iPad in part because these sorts of services were a part of the iOS software library. Now, because Apple's terms are incredibly onerous and usorious, it is likely that these applications will be pulled off the platform.

Why shouldn't I be pissed at Apple about this change which will most likely have a negative impact on my enjoyment and use of my iPad?
post #214 of 257
Quote:
Originally Posted by nht View Post

No you don't. I buy non-DRM'd books from webscriptions and load them into iBooks, Stanza, etc.

But most people don't buy their books from a DRM free source. Most purchase through a webstore like Kindle or ibooks, or buy physical copies. Furthermore, a lot of popular content is only available (legally) with DRM.

This is why Apple is requiring this in-app subscriptions policy. They KNOW it will force all of their competitors out of the market.

Quote:
As for Amazon leaving, I guess I'd be annoyed if I bought Kindle books and primarily read them on the iPad. However, if that's the case then Amazon is really freeloading since i'm using very little of their infrastructure. The most costly is to develop is the ebook reader.

No, if you buy a book from the Kindle 90% of the infrastructure you're using is Amazon. The ONLY Apple part you're using is the small amount of space it takes to store the app on their servers for download. You already paid for the device, either at retail, or by signing a contract with a carrier. All data transmission, server costs, royalties, etc. for that book are covered by Amazon, not Apple.

Quote:
Amazon could have pulled the Kindle app at any point so Apple at no point sold the iPad based on the availability of any particular app. The app store will continue to exist.

I wasn't implying that it wouldn't survive. But one of the reasons it got to the point it is today is because of big ticket apps LIKE Kindle and Netflix.

Quote:
Actually looking into it only really impacts Amazon. B&N and Sony both use ePub with Adobe DRM. I believe that the iFlow Reader currently supports that but it is tied to a book store. Still, adding Adobe DRM to someone like Stanza should be possible even if the app price goes up. Optimally iBooks adds Adobe DRM in additon to Fairplay but that'll be a cold day in hell.

No, it impacts the consumer. Because if I as a consumer want to read a book on my ipad/iphone I'll now be FORCED to get it through Apple (or hunt down a third party somewhere and sideload it, which most customer's won't). And if in 2 years I decide I went the new HpOS tablet, I'll lose ALL the money I invested into my ebook collection because you know Apple won't build an app for other platforms.
post #215 of 257
Quote:
Originally Posted by Fireball1244 View Post

Exactly. That's why this is so upsetting to me. After welcoming Kindle, and Netflix, and Hulu, and their users, into the iOS platform, and even advertising their presence as a benefit of the iPad and iPhone, Apple is turning around and asking for an unreasonably high fee to stay in the platform.

I don't really care about Amazon or Netflix or Hulu, though I do like those companies, and their products, which are superior to their competitors, including those provided by Apple. I care because as a user, I bought an iPad in part because these sorts of services were a part of the iOS software library. Now, because Apple's terms are incredibly onerous and usorious, it is likely that these applications will be pulled off the platform.

Why shouldn't I be pissed at Apple about this change which will most likely have a negative impact on my enjoyment and use of my iPad?

There's more at work here, IMHO. I think this is actually a play for the content producers. Look at it from the producer's point of view: If the resellers go along with this deal, then the producers have to pay both Apple and the resellers. But if the producers go directly to Apple, they remove the middleman and get the 70% all to themselves. Seems to me that's a no-brainer.

On the other hand, if the reseller walks, then the producer, if he wants to sell on iDevices, sells directly through Apple anyway.

In the long run, the reseller's goose is cooked, but you as the consumer will still get your product at a fair price. And frankly, the reseller has pretty much brought it on himself by cutting Apple out of the loop in the first place.
post #216 of 257
Quote:
Originally Posted by Sacto Joe View Post

There's more at work here, IMHO. I think this is actually a play for the content producers. Look at it from the producer's point of view: If the resellers go along with this deal, then the producers have to pay both Apple and the resellers. But if the producers go directly to Apple, they remove the middleman and get the 70% all to themselves. Seems to me that's a no-brainer.

On the other hand, if the reseller walks, then the producer, if he wants to sell on iDevices, sells directly through Apple anyway.

In the long run, the reseller's goose is cooked, but you as the consumer will still get your product at a fair price. And frankly, the reseller has pretty much brought it on himself by cutting Apple out of the loop in the first place.

No, if Apple cuts out all competition on their devices, there is nothing that prevents them from setting their own prices.

The reseller's we're talking about had established customer bases LARGER than the iOS customer base before the iPhone came out (namely Amazon). They offered the app as an additional benefit for their customers, and a lot of people bought iPhone's because they could read their books on it, or they could watch netflix on it.

If apple prices them out of the market, apple's going to lose customers. There are a ton of people who don't want all their content locked with itunes DRM. If I buy a book, I don't want to be forced to iOS devices in order to read it.
post #217 of 257
Quote:
Originally Posted by anonymouse View Post

Overhead? What overhead? There's no overhead

Exactly. There's no rational justification for Apple's 30% cut.

Quote:
it's a simple revenue sharing system. If your app generates revenue, you agree to share it.

And I say to Apple what Cee Lo Green sings about, as I join a class action lawsuit.

Perhaps consumers can get in on the class action fun, too, by claiming Apple is harming them in unusual and unexpected ways.

Steve Jobs can have his house torn down in more ways than one.
post #218 of 257
Quote:
Originally Posted by Menno View Post

Go look at Netflix's costs before you try talking about things you don't understand, ok?

Netflix's net income is NOT GREATER THAN 30%. Heck, their GROSS profit is only 37%. It doesn't matter what their fixed income is compared to their non-fixed costs. It's not rocket science. On top of that, every dollar paid to apple is one less dollar that goes towards getting new content, which will retain current subscribers.

TLDR: If you decrease a companies revenue stream by 30% you kill any real profit they make.

Except for the basic fact that net profits= total sales - (fixed costs+variable costs)
In terms of netflix, assuming they have .03 per customer (a month) to pay, but charge $8 a month, this comes out to Net= 7.97x - [movie licencing + r&d + promotions etc.]
Since the fixed costs are, as stated fixed, even if apple takes 30% from each sale on ios (assume 10% for ease of calculation) this comes out to 7.73 - fixed. In other words, though netflix makes out slightly less per membership, adding more still allows for greater margins. Hence, if they have enough volume, adding ios only can help them. The only detriment is increased fixed costs, i.e. server purchases, but if they have enough subscribers that they need enough servers to reduce 1 year margins to zero, kudos.

Edit: as for the issue of whether apple should be getting 30%, as they say in south park, "I'm not touching that one with a forty foot pole"
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post #219 of 257
Quote: And I say to Apple what Cee Lo Green sings about, as I join a class action lawsuit.

Perhaps consumers can get in on the class action fun, too, by claiming Apple is harming them in unusual and unexpected ways.

Steve Jobs can have his house torn down in more ways than one.


This is the problem with our country, everyone thinks if you dont like someone, sue them! You could just excercise your right in a capitalist society and not buy their products, just as you could exercise your right in a democratic society and not vote for a politician. By the way, this is the same argument i get into on political boards
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post #220 of 257
Quote:
Originally Posted by aquajets1 View Post

Except for the basic fact that net profits= total sales - (fixed costs+variable costs)
In terms of netflix, assuming they have .03 per customer (a month) to pay, but charge $8 a month, this comes out to Net= 7.97x - [movie licencing + r&d + promotions etc.]
Since the fixed costs are, as stated fixed, even if apple takes 30% from each sale on ios (assume 10% for ease of calculation) this comes out to 7.73 - fixed. In other words, though netflix makes out slightly less per membership, adding more still allows for greater margins. Hence, if they have enough volume, adding ios only can help them. The only detriment is increased fixed costs, i.e. server purchases, but if they have enough subscribers that they need enough servers to reduce 1 year margins to zero, kudos.

Edit: as for the issue of whether apple should be getting 30%, as they say in south park, "I'm not touching that one with a forty foot pole"

And again, You're talking theoretical. Look at Netflix's numbers (I've even linked them several times in this thread) they don't have the money to give. 30% would take ALL of their revenue and then some.

The more people who sign up through iOS devices, the larger the chunk of revenue (% wise) netflix will owe apple.

On top of that, the iOS subscription also grants them access to streaming on all their other devices, which that customer will LIKELY spend most of their time consuming that content. That basically means that if a user subscribes to netflix using their phone and then NEVER watches a single movie through the phone, apple will still get 30% of the monthly revenue until that customer cancels their subscription.

Then look at stores like Kindle. those prices are fixed and it's a revenue split with publishers already. For most best sellers, the split is 70/30 so that means for every book sold on iOS using the kindle app, Amazon will LOSE money. There is NO way they can use volume to make a profit here.
post #221 of 257
Quote:
Originally Posted by Menno View Post

And again, You're talking theoretical. Look at Netflix's numbers (I've even linked them several times in this thread) they don't have the money to give. 30% would take ALL of their revenue and then some.

The more people who sign up through iOS devices, the larger the chunk of revenue (% wise) netflix will owe apple.

On top of that, the iOS subscription also grants them access to streaming on all their other devices, which that customer will LIKELY spend most of their time consuming that content. That basically means that if a user subscribes to netflix using their phone and then NEVER watches a single movie through the phone, apple will still get 30% of the monthly revenue until that customer cancels their subscription.

Then look at stores like Kindle. those prices are fixed and it's a revenue split with publishers already. For most best sellers, the split is 70/30 so that means for every book sold on iOS using the kindle app, Amazon will LOSE money. There is NO way they can use volume to make a profit here.

This argument will start to be cyclical soon, because each of our arguments are based on different assumptions. I'm assuming that ios will, over time, increase ios subscriptions at a faster rate, causing netflix to gain back at least as much revenue as they lost (after all they only need to get 3/70 more than they would have to make out or about 4%) from apple's tax if you want to call it that. You make the assumption that existing people will do the ios subscription instead of the regular, which is possible but in my opinion unlikely as (as a netflix subscriber) they remind you in the mail with a prepaid envelope and send you an email with a website link to get you to send them money. I'm purely talking about netflix or netflix-like (i.e. rhapsody) services that have little additional overhead per subscriber.
Thank you for the cogent argument though, most of the time people kill me just to simplify.
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post #222 of 257
Quote:
Originally Posted by aquajets1 View Post

This argument will start to be cyclical soon, because each of our arguments are based on different assumptions. I'm assuming that ios will, over time, increase ios subscriptions at a faster rate, causing netflix to gain back at least as much revenue as they lost (after all they only need to get 3/70 more than they would have to make out or about 4%) from apple's tax if you want to call it that. You make the assumption that existing people will do the ios subscription instead of the regular, which is possible but in my opinion unlikely as (as a netflix subscriber) they remind you in the mail with a prepaid envelope and send you an email with a website link to get you to send them money. I'm purely talking about netflix or netflix-like (i.e. rhapsody) services that have little additional overhead per subscriber.
Thank you for the cogent argument though, most of the time people kill me just to simplify.

Additional revenue might compensate, I just think it's a lot higher than what some of the other posters here are assuming. ATM I think Netflix is pouring too much money into getting new distribution rights to take the hit, so it will be interesting to see if they keep their app active.

I don't think people should sue. Honestly, I'd just like the big companies (primarily amazon) to just pull their app, or make it so it can only view free content. If enough of them do it, hopefully Apple will rethink this policy. And thank you for not just calling me a Fandroid and writing me off because of that. It seems to be the default response here whenever someone questions Cupertino.
post #223 of 257
Quote:
Originally Posted by Menno View Post

30% isn't sharing revenue, that's taking practically all the profit. The number of companies who can get anywhere close to 30% in gross profit from sales (after taking out overhead costs and licensing fees) is next to nil. if it were 30% of the profit they MIGHt have a point, but they are saying 30% of revenue. We're not talking about an indie app developer who sells additional levels in app. That has a cost, but it's all developer overhead.
...
Yes, I know that not every Netflix customer has an iPhone. That's not the point. The point is that by requiring 30% of revenue, Apple is potentially taking EVERY CENT of profit and then some. That's not revenue sharing, that's highway robbery.

Apple's basically saying: You do all the hard work, and we get paid for it.

Remember, the 30% number wasn't plucked out of the air to suck away profits. 30% is the "rule of thumb" marketing and distribution cost for traditional developers and production costs for content creators....and that's the rub.

Amazon and Sony, at least on the surface, are not content creators (CC's) --they're distributors in the context of books and periodicals. Time, The Economist, The Daily, etc., these are content creators and (by rule of thumb) don't lose by being on IOS. I don't know why the Sony app was rejected --unless it was trying to sell periodicals in-app like Amazon had announced they were going to do with Kindle app.

It sounds to me as though this stops Amazon and Sony from undermining Apple's hopes for deals with CC's.
post #224 of 257
Quote:
Originally Posted by Menno View Post

Additional revenue might compensate, I just think it's a lot higher than what some of the other posters here are assuming. ATM I think Netflix is pouring too much money into getting new distribution rights to take the hit, so it will be interesting to see if they keep their app active.

I don't think people should sue. Honestly, I'd just like the big companies (primarily amazon) to just pull their app, or make it so it can only view free content. If enough of them do it, hopefully Apple will rethink this policy. And thank you for not just calling me a Fandroid and writing me off because of that. It seems to be the default response here whenever someone questions Cupertino.

The problem with pulling content is you anger the fanbase. If netflix pulls content from ios, i'm less likely to resubscribe than if it was never on ios because i could have had it. Will the companies be able to pull out is the question. Also, the distribution rights increase each year in response to growing interest. I.E. if netflix has more content, more people will be liable to subscribe, causing them to buy more content and so on. I know these are recurring yearly, but netflix estimates how many more subscribers they will have next year. So, correct, if they think more people will subscribe to netflix (even via ios) they will increase content costs. However, in proportion, i'd propose that once since they already have most rights (for past stuff) they will be able to make those costs less in proportion to their subscription income.
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post #225 of 257
Quote:
Originally Posted by aquajets1 View Post

The problem with pulling content is you anger the fanbase. If netflix pulls content from ios, i'm less likely to resubscribe than if it was never on ios because i could have had it. Will the companies be able to pull out is the question. Also, the distribution rights increase each year in response to growing interest. I.E. if netflix has more content, more people will be liable to subscribe, causing them to buy more content and so on. I know these are recurring yearly, but netflix estimates how many more subscribers they will have next year. So, correct, if they think more people will subscribe to netflix (even via ios) they will increase content costs. However, in proportion, i'd propose that once since they already have most rights (for past stuff) they will be able to make those costs less in proportion to their subscription income.

But Netflix has at least the hope of getting it's money back through additional subscriptions.

My "companies pull out" comment was directed largely at companies that aren't solely subscription bases, like the Kindle store. In order for them to stay in the iOS marketplace, they would need to increase the cost of books on EVERY platform just so they can make money on iOS because of how Apple set up the pricing rules. But that will just make iBooks more popular, which lessens the reason for Amazon to keep Kindle on iOS.

Yes, the promise of "buy once, read anywhere" is important to them, but the more revenue iOS generates, the more money it will cost them.
post #226 of 257
Quote:
Originally Posted by edoug View Post

Remember, the 30% number wasn't plucked out of the air to suck away profits. 30% is the "rule of thumb" marketing and distribution cost for traditional developers and production costs for content creators....and that's the rub.

Amazon and Sony, at least on the surface, are not content creators (CC's) --they're distributors in the context of books and periodicals. Time, The Economist, The Daily, etc., these are content creators and (by rule of thumb) don't lose by being on IOS. I don't know why the Sony app was rejected --unless it was trying to sell periodicals in-app like Amazon had announced they were going to do with Kindle app.

It sounds to me as though this stops Amazon and Sony from undermining Apple's hopes for deals with CC's.

Exactly, Apple's trying to get paid as a distributor, even when they're not (kindle, netflix, etc)
post #227 of 257
Quote:
Originally Posted by Menno View Post

But Netflix has at least the hope of getting it's money back through additional subscriptions.

My "companies pull out" comment was directed largely at companies that aren't solely subscription bases, like the Kindle store. In order for them to stay in the iOS marketplace, they would need to increase the cost of books on EVERY platform just so they can make money on iOS because of how Apple set up the pricing rules. But that will just make iBooks more popular, which lessens the reason for Amazon to keep Kindle on iOS.

Yes, the promise of "buy once, read anywhere" is important to them, but the more revenue iOS generates, the more money it will cost them.

There was a quote earlier about how Amazon only allows a 30-70 split in cases where the price is between 2 and 10 dollars, and their price cant be more than 80% of the physical book price, and two other things. Otherwise, they have a 70-30 split the other direction. Assuming this is true, though amazon would be hurt by reduced margins, on most books they would likely still make money. Once again, not commenting at all on apple's right to collect this.

I'll be interested in where this thread goes overnight
adios
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post #228 of 257
Quote:
Originally Posted by aquajets1 View Post

There was a quote earlier about how Amazon only allows a 30-70 split in cases where the price is between 2 and 10 dollars, and their price cant be more than 80% of the physical book price, and two other things. Otherwise, they have a 70-30 split the other direction. Assuming this is true, though amazon would be hurt by reduced margins, on most books they would likely still make money. Once again, not commenting at all on apple's right to collect this.

I'll be interested in where this thread goes overnight
adios



The 70/30 does have stipulations, but if you look at the "Best seller" lists for kindle, most of the apps fall in that range. the split doesn't change to quite 30/70 after that, but it is higher. The problem is that most sales don't have that higher split and publishers are increasingly forcing slimmer margins onto amazon (which I am ok with as long as the author sees a boon). So while a Majority of books might not qualify for that split, a good chunk of the books sold on kindle will.
post #229 of 257
Quote:
Originally Posted by Menno View Post

And again, You're talking theoretical. Look at Netflix's numbers (I've even linked them several times in this thread) they don't have the money to give. 30% would take ALL of their revenue and then some.

The more people who sign up through iOS devices, the larger the chunk of revenue (% wise) netflix will owe apple.

And Netflix can negotiate something with Apple since they have an aTV app that Apple probably wants to keep.

So Apple pays them X which is about what they have to pay Apple for the few folks that actually subscribe via their phone (not bleeding likely) or their iPad (which gets less traffic than the aTV).
post #230 of 257
Quote:
Originally Posted by Menno View Post

The 70/30 does have stipulations, but if you look at the "Best seller" lists for kindle, most of the apps fall in that range. the split doesn't change to quite 30/70 after that, but it is higher. The problem is that most sales don't have that higher split and publishers are increasingly forcing slimmer margins onto amazon (which I am ok with as long as the author sees a boon). So while a Majority of books might not qualify for that split, a good chunk of the books sold on kindle will.

The 70-to-Amazon thing was before booksellers started forcing (with Apple's help, which at the time I thought was a good thing) the "agency model" into the ebook business. Amazon and publishers had a big stand off over this, which Amazon lost. Now publishers have full leeway to set the retail price. Amazon uses variances in the cut it takes to entice them to lower prices (which we, as consumers, should applaud, and also note that Apple hasn't done bupkis to encourage), but at this point, the vast majority of Amazon ebook sales are books that are agency model driven, in the price window that results in a 30% to Amazon, 70% to the publisher cut.

Not that Apple taking 30% of the transaction, that they had nothing to do with and incurred no costs for other than processing the credit card charge, would be reasonable even if Amazon was receiving the 70%.
post #231 of 257
Quote:
Originally Posted by Menno View Post

The 70/30 does have stipulations, but if you look at the "Best seller" lists for kindle, most of the apps fall in that range. the split doesn't change to quite 30/70 after that, but it is higher. The problem is that most sales don't have that higher split and publishers are increasingly forcing slimmer margins onto amazon (which I am ok with as long as the author sees a boon). So while a Majority of books might not qualify for that split, a good chunk of the books sold on kindle will.

Amazon uses best sellers as a loss leader...the publishers really hated that.
post #232 of 257
Quote:
Originally Posted by Fireball1244 View Post

Not that Apple taking 30% of the transaction, that they had nothing to do with and incurred no costs for other than processing the credit card charge, would be reasonable even if Amazon was receiving the 70%.

If a large percentage of Kindle books are read on the iPad then Apple certainly incurred costs in developing the ecosystem to promote someone else's bookstore.

It's kinda like building a nice outdoor theater with a restaurant and tables so your customers can eat food while watching a movie. Then having some other restaurant sell food to your customers in competition with your restaurant because their own theater isn't as nice.

Sure, you're still selling movie tickets but you'd sure like to sell some food too.

You might tolerate this a while but eventually you want that other restaurant to stop selling food to your customers and improve their own damn theater or cough up some cash to use yours.
post #233 of 257
Quote:
Originally Posted by nht View Post

If a large percentage of Kindle books are read on the iPad then Apple certainly incurred costs in developing the ecosystem to promote someone else's bookstore.

It's kinda like building a nice outdoor theater with a restaurant and tables so your customers can eat food while watching a movie. Then having some other restaurant sell food to your customers in competition with your restaurant because their own theater isn't as nice.

Sure, you're still selling movie tickets but you'd sure like to sell some food too.

You might tolerate this a while but eventually you want that other restaurant to stop selling food to your customers and improve their own damn theater or cough up some cash to use yours.


They sold a device not an ecosystem. This is like buying a table from a furniture store and the furniture store charging 30% to every grocery store and food producer for a cut of the revenue on the food you consume at it becuse they managed to create a system where you can't buy food from the grocery store unless you buy it through the furniture store.

You may be thinking "what's the big deal? As a consumer, I don't pay any more for food and it's the grocery store's problem. If they want my business they should be grateful and pay the furniture store for making this great table to get that business." But one day you look up and your choices of food products is a lot less becuse grocery stores can't afford to keep paying the furniture store and the furniture store has decided to not only dictate the prices for the food sold to customers of their tables but to food sold anyone by the grocery store. So to eat what you want you are forced to sneak food on your table when the furniture store is not looking or just change your tastes to only like eating what is sold by grocery stores that are willing to pay the 30%.

Is that an ecosystem you want to live with?
post #234 of 257
Quote:
Originally Posted by eswinson View Post

They sold a device not an ecosystem.

<ecosystem discussion deleted>

Is that an ecosystem you want to live with?

That's an interesting migration from the 1st sentence to the last sentence.

But the answer is yes because right now it looks like the only grocery store that this is going to seriously impact is the one that is trying to corner the market on food.

The iPad it is an active and appears to be a necessary part of the ebook reading experience. So it's more than a passive table and a lot more like the delivery service that delivers the food from the grocer. That delivery service was built by the Apple grocer. If you want food from the Amazon grocer then you shouldn't expect the iPad delivery service to bring it to you but expect to use the Kindle delivery service.
post #235 of 257
Quote:
Originally Posted by eswinson View Post

They sold a device not an ecosystem. This is like buying a table from a furniture store and the furniture store charging 30% to every grocery store and food producer for a cut of the revenue on the food you consume at it becuse they managed to create a system where you can't buy food from the grocery store unless you buy it through the furniture store.

You may be thinking "what's the big deal? As a consumer, I don't pay any more for food and it's the grocery store's problem. If they want my business they should be grateful and pay the furniture store for making this great table to get that business." But one day you look up and your choices of food products is a lot less becuse grocery stores can't afford to keep paying the furniture store and the furniture store has decided to not only dictate the prices for the food sold to customers of their tables but to food sold anyone by the grocery store. So to eat what you want you are forced to sneak food on your table when the furniture store is not looking or just change your tastes to only like eating what is sold by grocery stores that are willing to pay the 30%.

Is that an ecosystem you want to live with?

Or like Sony charging to watch a movie on their tv because it's the most popular and best-est tv. Hmmm Samsung is good enough for me and they don't charge a fee. ( just anology). Watch it Apple, don't get too greedy. Unfortunately I can understand why Apple is doing this, there's only so far you can take these platforms before they are just commodities(all basically the same), thus all the content plays.
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post #236 of 257
Quote:
Originally Posted by nht View Post

That's an interesting migration from the 1st sentence to the last sentence.

But the answer is yes because right now it looks like the only grocery store that this is going to seriously impact is the one that is trying to corner the market on food.

The iPad it is an active and appears to be a necessary part of the ebook reading experience. So it's more than a passive table and a lot more like the delivery service that delivers the food from the grocer. That delivery service was built by the Apple grocer. If you want food from the Amazon grocer then you shouldn't expect the iPad delivery service to bring it to you but expect to use the Kindle delivery service.

Apple did not build the delivery service. ALL delivery costs but the credit card payment are still handled by Amazon. Amazon would STILL offer that if they were allowed to.

What apple is doing here is akin to renting a property to a store owner and then demanding a cut of EVERY sale that store owner makes.

Yes, Apple developed a consumption platform and they're offering a way to accept payments, and YES they should be compensated in some way for this. But they SHOULD NOT make 30% of everything the store processes as this is oftentimes equal to or higher than the TOTAL Gross profit those sales generate.

The ipad is a device with multiple delivery options. It is NOT a delivery service. Apple is not hosting the books on their server, they are not paying publishers ANY royalties. They're not handling the DRM or the cost investment of developing an application to read the book on. ALL of that is being handled by amazon.

The ONLY thing they are providing is the device (which the consumer ALL READY PAID FOR) and processing the customers payment (2.8% charge, round it to 5%).
post #237 of 257
Maybe my question is asked and asnwered...I don't know and I am too lazy to read six pages of posts to find out.

I pay $10 a month for Netflix service via the Netflix website. If I am reading Apple's new policy correctly, Netflix may offer the same subsciption through the Netflix app. The price cannot be more than what customers pay outside the app, and Apple takes a 30% cut. Netflix gets $7 and Apple gets $3. What is Netflix's incentive to offer their service in an app and take 30% less?
post #238 of 257
Quote:
Originally Posted by msuberly View Post

Maybe my question is asked and asnwered...I don't know and I am too lazy to read six pages of posts to find out.

I pay $10 a month for Netflix service via the Netflix website. If I am reading Apple's new policy correctly, Netflix may offer the same subsciption through the Netflix app. The price cannot be more than what customers pay outside the app, and Apple takes a 30% cut. Netflix gets $7 and Apple gets $3. What is Netflix's incentive to offer their service in an app and take 30% less?

Netflix' incentive is access to a hundred plus million customers willing to spend money?
post #239 of 257
Quote:
Originally Posted by MacRulez View Post

Apple has backpedaled before.

I suspect they'll do it again.

Hubris eventually demonstrates its bounds.

It's very true. The iphone was a very successful product when it was launched in 2007 but it became even more successful after the launch of the app store. Everyone seems to think that Apple just opened up this exposure to untold millions of devices for app developers to make millions off of. The inverse is more the case. The app store and all those free fart apps and cheesy games at first helped sell millions of phones. First it was 10K apps then 50K apps the 100K, 200K, 300K etc.. The app store is being touted as a feature of the phone. It helps sell the phone experience.

A lot of people buy iPhones so they can use the "free" facebook app. The "free" skype app. The fractions of cents it cost apple to host those apps and fulfill those downloads netted them hundreds of dollars in iPhone profits per instance. These companies have spent millions (if not billions) building their names, images and reputations. The app store did not make Netflix successful or Make Hulu an over night success. These services were established and popular long before they had apps in the app store.

If you believe apple actively markets your apps and subscription services and that you have exposure to millions of potential customers try launching "john smith's no name steaming media app" in the app store and see if you make any money. Netflix on the other hand has name recognition (that they earned) and its availability on the iPad lends value to the iPad. It becomes a selling feature of the iPad and in some cases a reason why people buy the device at all.

If you see a mass exodus of high profile apps I don't believe there are enough free fart apps, flash lights and occasional angry bird successes to make the phone a viable platform. Once the word gets out and people start making comments like "I'm not buying an iPhone because I can't read my kindle books on it or I won't buy it becuse they blocked hulu and netflix" sales will decline.

The other thing is nobody knows what the next killer app or service will be. An iPhone exclusion due to unfair revenue sharing may hurt Apple's bottom line- after all everybody keep saying if you don't like the terms nobody is forcing you to sell it in the app store." Jobs should be very aware that the number #1 thing that prevented the NeXT OS from becoming commercially viable despite its superiority in almost every area was the fact that MS refused to develop Office (at the time Word and Excel) for it.

I have nothing against apple charging for its services but 30% is abusive and will only lead to a revolt and will definitely tarnish an otherwise good experience for Apple, App and Content Publishers and Consumers.

I suspect at some point this issue ends up before a judge somewhere and some boundaries are drawn to make things a little more fair.
post #240 of 257
Quote:
Originally Posted by nht View Post

That's an interesting migration from the 1st sentence to the last sentence.

But the answer is yes because right now it looks like the only grocery store that this is going to seriously impact is the one that is trying to corner the market on food.

The iPad it is an active and appears to be a necessary part of the ebook reading experience. So it's more than a passive table and a lot more like the delivery service that delivers the food from the grocer. That delivery service was built by the Apple grocer. If you want food from the Amazon grocer then you shouldn't expect the iPad delivery service to bring it to you but expect to use the Kindle delivery service.

Apple is not acting as a delivery service in this case they are acting as a gatekeeper and assessing import duties to allow another company to deliver to a device you already paid for. Even if they were a delivery service, a delivery service does not charge a percentage of the cost of the good being shipped but rather a fixed fee based on units or weight. (insurance aside - which is not 30% either)

This is really just a 30% tax because apple could not get publishers to agree to be apart of an "iNewsStand" service that would allow apple to sell subscriptions through iTunes that could be consumed in iBooks or some other "iMagazine" app. Publishers wanted to build their own apps and manage their own subscriptions. Rather than carve out exceptions and make loopholes Apple just applied it to all in-app reoccurring charges and purchases. Sure this 30% is not something I have to pay directly but in the end just like all surcharges it will get passed on to the consumer in some form. Maybe in the form of one less issue a year, or less features in my iPad version of the publication. In some way that 30% will come out of my pocket.

In essence Apple has decided to sit outside of my house and dictate terms that affect what content will or won't be allowed inside to use on a device I purchased. People have said that if you don't like apple's terms don't buy their phone/pad but people seem to forget that the terms of use have evolved and drastically changed over the durration of my ownership of the phone. Very few of those changes have done much to enhance my user experience of the iphone or ipad though many have gone to great lengths to maintain apple's control of their revenue streams. In the end limiting my uses and enjoyment of the devices and in some cases increasing my cost of ownership.
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