This view that an owner can do what he wants with the product as per a form of capitalisme sauvage is an American centric view which is not shared in the European Union or in most other Western countries.
The test is whether a company with a dominant position abuses that dominance. Microsoft abused their position with Windows and the EU took action over it. Even though no-one was forced to buy a Windows computer, their dominance in the market place reduced competition and led to unfair practices. The suggestion that a person or a consumer builds their own tablet or operating system is unrealistic.
If Apple are abusing a dominant position and following unfair practices then it is no defence to say that it owns the product. The promotion of fair practice and competition is important and the EU has taken action against American and European companies that have attempted to behave unfairly or abusively.
Come now provided it is Apple, and Apple's "sandbox" ( not your device you own) then it is ok. Everybody else bad. Apple good. Of course this is restraint of trade.
Lets work out how unviable the Apple Store is for Amazon if their margins are 50%. Lets say Amazon sell a popular e-book at 50% margin. The book costs em $5 ( all costs, including righs, labour, distribution etc. averaged out. Its an average cost). Cost to consumer $7.50
Amazon sell a million. Heres the stats
sales $7.5M
cost $5.0M
profit before Apple $2.5M
I think that people are naively thinking that the profit after Apple is 70% of $2.5M that is $1.75 and wondering what the problem is. Wrong. The 30% is on the original price.
profit after Apple is 2.5M - $7.5M * 0.3 ( $2.25M) = 0.25M.
Margins are reduced from 50% to 5%. At 43% margins your profit dissappears.
How many does it have to sell on an Android device to match this profit?
Not 1 million, but 100,000. So if Amazon's margins are 50% per e-book and if Android is more than 10% at the end of the year then Android becomes the viable platform. It gets worse if the margins are lower.
Long term this will effect iPad sales. And it will become the cause celebre of the Apple is Not Open camp.
And with justification, since this will have much greater effect on the iPad experience than lack of Flash. I am pretty sure that the competitors will make justified mileage from it.
( Also the publishers are the publishers of important and world read magazines, periodicals, and newspapers. Lets see if their editorial line on Apple changes.)
So Apple should just get out of IAP for people who dont need it and concentrate on selling the damned hardware.
Everyone understands the mathematics, we also understand that you're upset that you failed to read your developer agreement before you submitted your app and got rejected and are not now fully in possession of your faculties when discussing this topic.
Everyone understands the mathematics, we also understand that you're upset that you failed to read your developer agreement before you submitted your app and got rejected and are not now fully in possession of your faculties when discussing this topic.
Lol.
I made my money. I am a contractor. The contract is over. I am paid. New job next week. I am angry for my ex- employers, and so are they, but they are a multi-million dollar company with vast resources to piss on Apple from their ownership of a lot of European webprint and some television real estate. Thats a bad move by Apple.
( Do you think that all developers are in their bedrooms? Those days are pretty much over. And no developer producing an app for content providers would be a solo dev - think about who owns or buys e-books, magazines, and music and video rights).
Besides dealing in Ad homimems, far too easily allowed on this forum you do little else in a coherent argument.
In fact, you present no argument whatsoever, except fan boy slavishness. I present a post on figures. You reply with an ad-homimen: some fuckwitted wank about how my ex-employer ( a famous UK content provider,) did not read the "developer agreement" when even a genetically retarded two year old would understand that Apple changed the terms, but not the wording, of the agreement in the last few weeks. Which is why Sony is banned for what Kindle was ( and is) doing already.
I totally agree, apple is providing the market and the distribution for their product. To me the math is pretty simple. 70% profits on a expanding subscriber base vs. the current 100% profits on an exponentially decreasing subscriber base. .
Your math is wrong. Those numbers are REVENUES, not profits.
From the 70% of selling price they get from Apple, they have to subtract the cost of content creation and their own overheads.
From the 100% of revenue for selling through normal channels, they have to subtract the cost of content creation and their own overheads PLUS the cost of buying paper and ink, the cost of running and maintaining big printing presses and facilities, the discount that they give to normal retailers, shipping costs, and so on.
Chances are that they make more money if Apple gives them 70% of revenues than if they sell it through normal channels.
Quote:
Originally Posted by asdasd
The mathematics of this is not understood.
Lets work out how unviable the Apple Store is for Amazon if their margins are 50%. Lets say Amazon sell a popular e-book at 50% margin. The book costs em $5 ( all costs, including righs, labour, distribution etc. averaged out. Its an average cost). Cost to consumer $7.50
Amazon sell a million. Heres the stats
sales $7.5M
cost $5.0M
profit before Apple $2.5M
I think that people are naively thinking that the profit after Apple is 70% of $2.5M that is $1.75 and wondering what the problem is. Wrong. The 30% is on the original price.
profit after Apple is 2.5M - $7.5M * 0.3 ( $2.25M) = 0.25M.
Margins are reduced from 50% to 5%. At 43% margins your profit dissappears.
No, the only problem is that you're making up numbers that have no bearing on reality. Furthermore, you're using figures from a reseller rather than a publisher. It is not surprising that Amazon is not going to do too well selling through iTunes. Amazon is Apple's competitor - why should Apple be offering them a great deal?
So let's look at the PUBLISHERS rather than an Apple competitor.
Selling through iTunes, publisher gets to keep 70% and has to pay only content creation costs (and overheads).
Selling through conventional channels, they have their own overheads and content creation cost PLUS the cost of buying paper and ink, the cost of running and maintaining big printing presses and facilities, the discount that they give to normal retailers, shipping costs, and so on.
Considering that it's not unusual for the retailer alone to keep 50%, it is not difficult to see that a publisher might be making MORE via iTunes. Of course, even that is incomplete because the selling price is different and ad revenues are different for the two channels.
Bottom line is that it is not at all clear that the publishers can't make money on iTunes, but if they can't, no one is forcing them to use it. Apple is offering them a choice of how they might distribute their product. I really don't get all the whining about how unfair it is.
"Consumers may only have access to the newspaper of their choice via the iTunes store, where the transaction would be subject to commission," said the ENPA in a statement.
Doesn't this answer his complaint?
Quote:
Originally Posted by AppleInsider
"We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase," said Apple spokesperson Trudy Miller.
If you are only on the iTunes store, open your own store too!
All Apple says is that if you sell things outside of iTunes, you have to provide that in iTunes as well. If the only way someone can get your content is through iTunes, shouldn't Apple get their commission for bringing the eyes to you?
Nothing is stopping you from making it available to anyone everywhere with your own payment system where Apple does not get a cut!
To my mind, a 30% fee would be exorbitant. I am not sure if the content is delivered via iTunes to the app or via the publisher's resource. Especially if the latter, the fee should be reduced. Subscriptions are very different from other types of content. Also, with news, it is necessary to keep the price low and have very high subscription rate. There are huge costs that can only be amortized over a large subscription base. I imagine that no one would complain if Apple's fee was in the 10-12% range.
... In fact, you present no argument whatsoever ...
It's already been explained to you ad nauseam why your "math" is beside the point. There's no point in trying to reason with someone who isn't open to it, and no point in repeating the same arguments that were given the last time AI published this story.
I just don't get this debate, maybe I'm missing something. Take my favourite magazine T3. I can purchase the iTunes In App iPad version for £2.99 or the Zinio digital version for Mac/iPad for £2.49. Or I could just buy the paper version for £4.25. Presumably when other 10" tablets are released later this year they will sell a version for whatever software marketplace they use to accomodate those users. Alternatively they could just sell a digital/pdf version via their website or put the content behind a paywall. Where is the monopoly?
I don't have to understand the mathematics of how a publisher calculate their profit, I just know a simple fact, book sellers, such as B&N, Borders, charges publishers 50% on hard cover books sold through their shelves, as stated in this NY Times article.
If you are only on the iTunes store, open your own store too!
All Apple says is that if you sell things outside of iTunes, you have to provide that in iTunes as well. If the only way someone can get your content is through iTunes, shouldn't Apple get their commission for bringing the eyes to you?
Nothing is stopping you from making it available to anyone everywhere with your own payment system where Apple does not get a cut!
Can I sell content on my own store front for X and then sell on iTunes through IAP for 1.3*X? This would appear to meet the rules of the developer agreement.
If so, then I see no problem and this would make sense. If, however, Apple is saying that the outside store and IAP have to have the same price, then that does seem problematic because Apple should not have the ability to dictate the price of someone else's software.
Unfair? Seriously? What are we, five years old? This is a business. Businesses exist for one purpose, and one purpose only - to make money.
If Apple has done something illegal, then their feet should be held to the fire. But if you don't like the 30% cut or you don't like the app approval process (which admittedly appears to be pretty stupid) then take your business elsewhere, like over to Android or WP7. Why the whining?
It reminds me of how the entire technology industry responded to Microsoft - their illegal behavior aside, if M$ did stuff developers/partners/providers didn't like, they'd bellyache about it, but none of them had the balls to take their business elsewhere. Try it for a change!
But, but, Mr(s) Elected Official, it's, it's, it's not fair! Waaaaaaaaaaaaaaaaah! We're stupid, we don't know how to deal with change in our industry. Fix our problems for us! Waaaaaaaaaaaah!
...I don't think Apple's approach is a winning strategy long term. 30% is too steep, app approval is inconsistent and unreliable, and they're a PITA to deal with as a company. If they don't pull their heads out, Apple is the one who'll eventually lose. Publishers stop whining. Take your stuff to Android and tell Apple to f-off if you don't like their model. It's really that simple.
I don't have to understand the mathematics of how a publisher calculate their profit, I just know a simple fact, book sellers, such as B&N, Borders, charges publishers 50% on hard cover books sold through their shelves, as stated in this NY Times article.
You're not looking at the whole picture, however. Think of Amazon as that bookstore. If it wants to continue to stay on the Apple app store, they have to allow Apple to take 30% of the cost of the book, which eats into whatever revenue is generated for Amazon's ebooks. Think about it... either Amazon gives a 30% cut from their existing sales to Apple, or else they don't have a reader on iOS anymore.
Apple is saying "give us a cut of whatever your business is, or you don't do business." Its one thing for Apple to take 30% from the publisher directly (that's what iBooks is for). Its another thing to take 30% from literally *anyone* who wants to do business on iOS, regardless of existing agreements.
Everyone understands the mathematics, we also understand that you're upset that you failed to read your developer agreement before you submitted your app and got rejected and are not now fully in possession of your faculties when discussing this topic.
Are you going to the Apple Fan Boi convention dressed as Apple's first USB mouse (hockey puck) again? What flavor this year?
You're not looking at the whole picture, however. Think of Amazon as that bookstore. If it wants to continue to stay on the Apple app store, they have to allow Apple to take 30% of the cost of the book, which eats into whatever revenue is generated for Amazon's ebooks. Think about it... either Amazon gives a 30% cut from their existing sales to Apple, or else they don't have a reader on iOS anymore.
Apple is saying "give us a cut of whatever your business is, or you don't do business." Its one thing for Apple to take 30% from the publisher directly (that's what iBooks is for). Its another thing to take 30% from literally *anyone* who wants to do business on iOS, regardless of existing agreements.
How do you think about this headline
"Popular mall ask stores to pay to remain in mall. Store owners shocked!"
( Also the publishers are the publishers of important and world read magazines, periodicals, and newspapers. Lets see if their editorial line on Apple changes.)
So Apple should just get out of IAP for people who dont need it and concentrate on selling the damned hardware.
Your example has nothing to do with periodical publishers. The problem you describe is the result of other retailers (with only retail margins) trying to sell in the App space.
Periodical publishers may well be able to absorb 30% (as is The Daily) however I think 30% is too much since Apple is providing only "merchandising" in their storefront and payment processing but no delivery. If Apple provides payment processing and delivery then a 30% share does not seem outrageous.
Comments
I see this FlipBook mentioned when talling about newspapers. On the Canadian iTunes store it is a cartoon animation app.
What FlipBook are you all talking about?
It's FlipBoard.
This view that an owner can do what he wants with the product as per a form of capitalisme sauvage is an American centric view which is not shared in the European Union or in most other Western countries.
The test is whether a company with a dominant position abuses that dominance. Microsoft abused their position with Windows and the EU took action over it. Even though no-one was forced to buy a Windows computer, their dominance in the market place reduced competition and led to unfair practices. The suggestion that a person or a consumer builds their own tablet or operating system is unrealistic.
If Apple are abusing a dominant position and following unfair practices then it is no defence to say that it owns the product. The promotion of fair practice and competition is important and the EU has taken action against American and European companies that have attempted to behave unfairly or abusively.
Come now provided it is Apple, and Apple's "sandbox" ( not your device you own) then it is ok. Everybody else bad. Apple good. Of course this is restraint of trade.
Lets work out how unviable the Apple Store is for Amazon if their margins are 50%. Lets say Amazon sell a popular e-book at 50% margin. The book costs em $5 ( all costs, including righs, labour, distribution etc. averaged out. Its an average cost). Cost to consumer $7.50
Amazon sell a million. Heres the stats
sales $7.5M
cost $5.0M
profit before Apple $2.5M
I think that people are naively thinking that the profit after Apple is 70% of $2.5M that is $1.75 and wondering what the problem is. Wrong. The 30% is on the original price.
profit after Apple is 2.5M - $7.5M * 0.3 ( $2.25M) = 0.25M.
Margins are reduced from 50% to 5%. At 43% margins your profit dissappears.
How many does it have to sell on an Android device to match this profit?
Not 1 million, but 100,000. So if Amazon's margins are 50% per e-book and if Android is more than 10% at the end of the year then Android becomes the viable platform. It gets worse if the margins are lower.
Long term this will effect iPad sales. And it will become the cause celebre of the Apple is Not Open camp.
And with justification, since this will have much greater effect on the iPad experience than lack of Flash. I am pretty sure that the competitors will make justified mileage from it.
( Also the publishers are the publishers of important and world read magazines, periodicals, and newspapers. Lets see if their editorial line on Apple changes.)
So Apple should just get out of IAP for people who dont need it and concentrate on selling the damned hardware.
The mathematics of this is not understood. ...
Everyone understands the mathematics, we also understand that you're upset that you failed to read your developer agreement before you submitted your app and got rejected and are not now fully in possession of your faculties when discussing this topic.
Everyone understands the mathematics, we also understand that you're upset that you failed to read your developer agreement before you submitted your app and got rejected and are not now fully in possession of your faculties when discussing this topic.
Lol.
I made my money. I am a contractor. The contract is over. I am paid. New job next week. I am angry for my ex- employers, and so are they, but they are a multi-million dollar company with vast resources to piss on Apple from their ownership of a lot of European webprint and some television real estate. Thats a bad move by Apple.
( Do you think that all developers are in their bedrooms? Those days are pretty much over. And no developer producing an app for content providers would be a solo dev - think about who owns or buys e-books, magazines, and music and video rights).
Besides dealing in Ad homimems, far too easily allowed on this forum you do little else in a coherent argument.
In fact, you present no argument whatsoever, except fan boy slavishness. I present a post on figures. You reply with an ad-homimen: some fuckwitted wank about how my ex-employer ( a famous UK content provider,) did not read the "developer agreement" when even a genetically retarded two year old would understand that Apple changed the terms, but not the wording, of the agreement in the last few weeks. Which is why Sony is banned for what Kindle was ( and is) doing already.
Go to ignore, you cultish halfwit.
I totally agree, apple is providing the market and the distribution for their product. To me the math is pretty simple. 70% profits on a expanding subscriber base vs. the current 100% profits on an exponentially decreasing subscriber base. .
Your math is wrong. Those numbers are REVENUES, not profits.
From the 70% of selling price they get from Apple, they have to subtract the cost of content creation and their own overheads.
From the 100% of revenue for selling through normal channels, they have to subtract the cost of content creation and their own overheads PLUS the cost of buying paper and ink, the cost of running and maintaining big printing presses and facilities, the discount that they give to normal retailers, shipping costs, and so on.
Chances are that they make more money if Apple gives them 70% of revenues than if they sell it through normal channels.
The mathematics of this is not understood.
Lets work out how unviable the Apple Store is for Amazon if their margins are 50%. Lets say Amazon sell a popular e-book at 50% margin. The book costs em $5 ( all costs, including righs, labour, distribution etc. averaged out. Its an average cost). Cost to consumer $7.50
Amazon sell a million. Heres the stats
sales $7.5M
cost $5.0M
profit before Apple $2.5M
I think that people are naively thinking that the profit after Apple is 70% of $2.5M that is $1.75 and wondering what the problem is. Wrong. The 30% is on the original price.
profit after Apple is 2.5M - $7.5M * 0.3 ( $2.25M) = 0.25M.
Margins are reduced from 50% to 5%. At 43% margins your profit dissappears.
No, the only problem is that you're making up numbers that have no bearing on reality. Furthermore, you're using figures from a reseller rather than a publisher. It is not surprising that Amazon is not going to do too well selling through iTunes. Amazon is Apple's competitor - why should Apple be offering them a great deal?
So let's look at the PUBLISHERS rather than an Apple competitor.
Selling through iTunes, publisher gets to keep 70% and has to pay only content creation costs (and overheads).
Selling through conventional channels, they have their own overheads and content creation cost PLUS the cost of buying paper and ink, the cost of running and maintaining big printing presses and facilities, the discount that they give to normal retailers, shipping costs, and so on.
Considering that it's not unusual for the retailer alone to keep 50%, it is not difficult to see that a publisher might be making MORE via iTunes. Of course, even that is incomplete because the selling price is different and ad revenues are different for the two channels.
Bottom line is that it is not at all clear that the publishers can't make money on iTunes, but if they can't, no one is forcing them to use it. Apple is offering them a choice of how they might distribute their product. I really don't get all the whining about how unfair it is.
"Consumers may only have access to the newspaper of their choice via the iTunes store, where the transaction would be subject to commission," said the ENPA in a statement.
Doesn't this answer his complaint?
"We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase," said Apple spokesperson Trudy Miller.
If you are only on the iTunes store, open your own store too!
All Apple says is that if you sell things outside of iTunes, you have to provide that in iTunes as well. If the only way someone can get your content is through iTunes, shouldn't Apple get their commission for bringing the eyes to you?
Nothing is stopping you from making it available to anyone everywhere with your own payment system where Apple does not get a cut!
... In fact, you present no argument whatsoever ...
It's already been explained to you ad nauseam why your "math" is beside the point. There's no point in trying to reason with someone who isn't open to it, and no point in repeating the same arguments that were given the last time AI published this story.
Doesn't this answer his complaint?
If you are only on the iTunes store, open your own store too!
All Apple says is that if you sell things outside of iTunes, you have to provide that in iTunes as well.
Nothing is stopping you from making it available to anyone everywhere with your own payment system where Apple does not get a cut!
Yes, but the people who are all bent out of shape about this aren't thinking rationally.
The mathematics of this is not understood.
I don't have to understand the mathematics of how a publisher calculate their profit, I just know a simple fact, book sellers, such as B&N, Borders, charges publishers 50% on hard cover books sold through their shelves, as stated in this NY Times article.
http://www.nytimes.com/2010/03/01/bu.../01ebooks.html
Apple is only taking 30%.
If you are only on the iTunes store, open your own store too!
All Apple says is that if you sell things outside of iTunes, you have to provide that in iTunes as well. If the only way someone can get your content is through iTunes, shouldn't Apple get their commission for bringing the eyes to you?
Nothing is stopping you from making it available to anyone everywhere with your own payment system where Apple does not get a cut!
Can I sell content on my own store front for X and then sell on iTunes through IAP for 1.3*X? This would appear to meet the rules of the developer agreement.
If so, then I see no problem and this would make sense. If, however, Apple is saying that the outside store and IAP have to have the same price, then that does seem problematic because Apple should not have the ability to dictate the price of someone else's software.
Lol.
I made my money. I am a contractor. The contract is over. I am paid. ....... BLAH BLAH BLAH.....
Go to ignore, you cultish halfwit.
Wow, easy..... you've really worked yourself up into a lather there!
Why don't you run along, learn the difference between say, revenue and profit, for starters. Then come back and teach us 'math.'
If Apple has done something illegal, then their feet should be held to the fire. But if you don't like the 30% cut or you don't like the app approval process (which admittedly appears to be pretty stupid) then take your business elsewhere, like over to Android or WP7. Why the whining?
It reminds me of how the entire technology industry responded to Microsoft - their illegal behavior aside, if M$ did stuff developers/partners/providers didn't like, they'd bellyache about it, but none of them had the balls to take their business elsewhere. Try it for a change!
But, but, Mr(s) Elected Official, it's, it's, it's not fair! Waaaaaaaaaaaaaaaaah! We're stupid, we don't know how to deal with change in our industry. Fix our problems for us! Waaaaaaaaaaaah!
...I don't think Apple's approach is a winning strategy long term. 30% is too steep, app approval is inconsistent and unreliable, and they're a PITA to deal with as a company. If they don't pull their heads out, Apple is the one who'll eventually lose. Publishers stop whining. Take your stuff to Android and tell Apple to f-off if you don't like their model. It's really that simple.
I don't have to understand the mathematics of how a publisher calculate their profit, I just know a simple fact, book sellers, such as B&N, Borders, charges publishers 50% on hard cover books sold through their shelves, as stated in this NY Times article.
http://www.nytimes.com/2010/03/01/bu.../01ebooks.html
Apple is only taking 30%.
You're not looking at the whole picture, however. Think of Amazon as that bookstore. If it wants to continue to stay on the Apple app store, they have to allow Apple to take 30% of the cost of the book, which eats into whatever revenue is generated for Amazon's ebooks. Think about it... either Amazon gives a 30% cut from their existing sales to Apple, or else they don't have a reader on iOS anymore.
Apple is saying "give us a cut of whatever your business is, or you don't do business." Its one thing for Apple to take 30% from the publisher directly (that's what iBooks is for). Its another thing to take 30% from literally *anyone* who wants to do business on iOS, regardless of existing agreements.
Everyone understands the mathematics, we also understand that you're upset that you failed to read your developer agreement before you submitted your app and got rejected and are not now fully in possession of your faculties when discussing this topic.
Are you going to the Apple Fan Boi convention dressed as Apple's first USB mouse (hockey puck) again? What flavor this year?
Are you going to the Apple Fan Boi convention dressed as Apple's first USB mouse (hockey puck) again? What flavor this year?
I always go bondi blue, but this year I'll have my (also bondi blue) hockey puck mouse yo-yo with me.
You're not looking at the whole picture, however. Think of Amazon as that bookstore. If it wants to continue to stay on the Apple app store, they have to allow Apple to take 30% of the cost of the book, which eats into whatever revenue is generated for Amazon's ebooks. Think about it... either Amazon gives a 30% cut from their existing sales to Apple, or else they don't have a reader on iOS anymore.
Apple is saying "give us a cut of whatever your business is, or you don't do business." Its one thing for Apple to take 30% from the publisher directly (that's what iBooks is for). Its another thing to take 30% from literally *anyone* who wants to do business on iOS, regardless of existing agreements.
How do you think about this headline
"Popular mall ask stores to pay to remain in mall. Store owners shocked!"
( Also the publishers are the publishers of important and world read magazines, periodicals, and newspapers. Lets see if their editorial line on Apple changes.)
So Apple should just get out of IAP for people who dont need it and concentrate on selling the damned hardware.
Your example has nothing to do with periodical publishers. The problem you describe is the result of other retailers (with only retail margins) trying to sell in the App space.
Periodical publishers may well be able to absorb 30% (as is The Daily) however I think 30% is too much since Apple is providing only "merchandising" in their storefront and payment processing but no delivery. If Apple provides payment processing and delivery then a 30% share does not seem outrageous.