As a regular consumer/apple fan I was initially disappointed about the superficially "unfair" policy of charging 30% for "just the processing fee", until I made the analogy comparing iTunes to any other brick and mortar store. The store spends the capital to provide a place where customers can see the products. The supplier, in turn, is not going to punish it's distributor by under undercutting it's prices. Take apple for example. It charges the same price on it's website for a computer (or higher) as best buy, wallmart, AMAZON, or others. Apple makes less profit off of those products, but that's the price apple pays to extend it's distribution. The processing services are a minor part of the picture.
For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less.
This is assuming that Amazon passes on the 30% to the owners of the books. They wont and cant do that. You are assuming some nonsensical figures - apparantly a 100% margin on e-books ( but Amazons total margins are 5%).
If a book costs Amazon $5. ( All costs including hosting etc.). And if they dont sell that book for more than a 43% margin ( $7.15) the profit is lost. If they sell at a 50% margin profit is reduced by 90%. You can do the rest of the math yourselves.
Similarly this model affects Skype, Audible, Spotify, and all other content providers who will have much more room to make money on Android.
so major credit cards charge 1.5 - 2.7% for a transaction fee, processing all of the data.
...Apple has decided that they want 30%, AND won't allow publishers to offer a lower price anywhere outside of their store? ridiculous
i should be able to subscribe to a publishers content through the convenience of the app store for a slight upcharge, and still be able to get that subscription directly from the publisher for slightly less.
Credit cards don't offer all of those products for sale, nor do they advertise any of them. They just process the transaction. Apple has a store that all the p,rodents are on, described, sold, and that also hosts reviews and other information. It's not the same as a credit card transaction. People here should understand that.
And they do host much of what they sell, or give away for free. That should be understood as well. Anyone who says that they don't host any of the things they sell, or give away are living in their own worlds. Will they host these subs? In some cases.
What apple is doi g here seems pretty fair, and much better than I was thinking it would be. Apple will be listing and hosting subs that are gotten from their store. They won't be doing that for subs that aren't. It seems pretty clear.
Amazon was brought up. Apple hosts the Kindle app, but not books bought through Amazon's store. That makes sense. The same will be true for subs. If Apple sells the sub, they will host it, if not, then they won't. It's not that difficult to understand.
Amazon, and others don't allow better deals than given in their store, so why should Apple? You have to answer that question. If everyone else is doing that, then Apple should be allowed to demand it as well, or theirs will always be the highest pricing.
There is no defense for this move. If you think it's a good idea or that it's justified, you are not seeing the whole picture. Apple is abusing its market position and it's not going to work out for them.
They claim there's choice, but developers can't link to their online store from within of the app. Nor can they offer a reduced rate on their website even though their costs are close to 30% lower (there are costs associated with processing your own subscriptions, but not 30%). If they are currently making less than 30% profit on their subscriptions, they have to either take a loss on their in-app subscriptions, abandon the app store, or raise prices everywhere.
As an iPhone owner, I hope they pull out. Apps are what make the iPhone, without them, the iPhone isn't dominant. Amazon, Hulu, Netflix, etc all leaving would be quite the humbling experience for Apple and they'd be forced to change their policies or lose customers. Apple's in app subscription services look pretty good, and Apple does deserve a cut from anyone who chooses to utilize them, but they should be a choice and the cut should be less than 30%.
My big beef is with services that span multiple platforms, not things like the iPad only Daily. If a service is usable on multiple platforms, how can Apple claim that they deserve 30% of the subscription fee when there's no guarantee that an iOS device is even used to access that service 30% of the time.
When you buy a book from Amazon the book is hosted on Amazon servers. When you buy a book through in app App Store, Apple only processes the payment, the book is also hosted on Amazon. Apple ONLY processes the payment, they don't host the content, they don't distribute the content, they only take the 30% cut.
Quote:
Originally Posted by Gwydion
Apple is NOT hosting any data.
False, Apple hosts the free app. So Apple's cut has been 30% of 0.
Now Apple's cut is 30% of in-app subscription purchases which seems fair given you can still buy the subscription outside the app.
For books both the Kindle and Nook apps are free and direct competitors with iBooks. Amazon has or had a no-lower-price policy as well. But they aren't subscriptions anyway.
I guess I'm a bit tainted as a shareholder. Anytime I see Apple doing well to make a profit, I'm good, and if they have the market power to outgun Amazon, Sony or whoever, well, then more power to them. They've earned it..
As a shareholder you should worry. Amazon has their own storefront and only uses Apple to distribute the app. If Apple takes too big of cut then Amazon will move. Likely others will follow suit or not go with Apple to being with. With a "sort of" alternative like android being available it could be the start of an avalanche. Apple needs to tread carefully here as there is a real risk that their whole ecosystem could collapse. I would not like that to happen but I am concerned.
Agreed! After having had success in the entertainment/arts field in conjunction with new media, I entered into the consulting world a little over a year ago. I've worked with many successful retail stores, some who have margins that range anywhere from 40-55%.
To someone who doesn't understand anything about business, this goes through their mind:
"OMG! What a rip off!! That's disgusting how much they mark up!!!!"
To someone who DOES understand how business works, this goes through their mind:
"Yep, that's about normal. They've got employees, power, utilities, insurance, etc. etc. etc."
The iPad is not a retail store. Amazon, Kindle etc. have their own store. Its not like this hasnt been pointed out about a dozen times already. ( This forum needs to be moderated so that people with some comprehension skills are allowed to post).
Apple is basically acting as a rentier here.
in any case being a consultant in Alabama for shit kicker LTD is not the same as running Amazon. Or Sony. Who have already pulled out. Or Skype, who will. Or Amazon, who will.Or all the other content providers who will. Or the European publishers who say they will, and are bringing a court case. They probably know their model better than you.
For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less. Business decisions are and should not be based on emotions.
Kind of best to just ignore asdasd. They think the world is plug and play in their own version. The last time I looked there was no governing body that unifies all deals to make them equal. Businesses tend to make deals that benefit their companies and those benefits come in many shapes and forms. itunes has been great for the music and film industry and I am sure the publishing industry is going to greatly benefit by this as well. And if you do not like it then switch to a different platform, it is as simple as that.
There is nothing in the App Store guidelines about revenue sharing. There is no legal text on the issue. You have made up your own excuse. ...
That's just the lamest counter argument anyone has made yet, and completely false, since the developer agreement is very explicit about the 30% -- i.e., the revenue sharing you say they don't mention.
Agreed! After having had success in the entertainment/arts field in conjunction with new media, I entered into the consulting world a little over a year ago. I've worked with many successful retail stores, some who have margins that range anywhere from 40-55%.
To someone who doesn't understand anything about business, this goes through their mind:
"OMG! What a rip off!! That's disgusting how much they mark up!!!!"
To someone who DOES understand how business works, this goes through their mind:
"Yep, that's about normal. They've got employees, power, utilities, insurance, etc. etc. etc."
The profit margins in retail stores have little (if anything) to do with the profit margins of companies offering subscription services online.
I have an idea, why not let Microsoft charge one percent of the total amount of every invoice written with Word? Or rather written on a Windows PC. That would be a huge untapped revenue pool for Microsoft.
I hope you're being sarcastic. Microsoft is already getting paid for every invoice you write up in Word. You've paid them for that privilege up front, even if you never use the product.
What you're really saying is that Apple should charge for iTunes up front, say, at least as much as Word costs.
iTunes/App Store is NOT a credit card processor. IT'S A STORE.
They are SELLING their PRODUCTS to their customers.
Does anybody in this thread know anything about the retail business?
Apple takes a cut- it's THEIR store. Apple is the one who pays the credit card processing fees to Visa/MC/Amex.
Exactly! Don't offer your product via iTunes or the App Store and see where your business is in 5 yrs? I love how Apple is not allowed to make money b/c people buy things b/c of their superior hardware and system?
For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less. Business decisions are and should not be based on emotions.
Questions...
Do you think the publishers will accept 30% less if the eBook was purchased through iTunes rather than directly though the Amazon store?
Wouldn't it be more like a purchase through Apple leaves the publisher with $7 and Amazon with $0?
Surely the publishers established eBook pricing based on cost analysis of the profit they receive selling a hard copy book vs selling an eBook with Amazon's 30% cut.
I see three options:
1. Publishers raise the price of eBooks to cover the Apple tax
2. Amazon display a "please visit our website to buy a book" on the purchase page of the iOS Kindle app
3. Publishers do another cost analysis of the profit they receive selling a hard copy book vs selling an eBook with Amazon's 30% cut as well as Apple's 30% cut and potentially pull books from the iOS Kindle store.
I have an idea, why not let Microsoft charge one percent of the total amount of every invoice written with Word? Or rather written on a Windows PC. That would be a huge untapped revenue pool for Microsoft.
Hey, I have a better idea. Why not let Microsoft charge 70% for every app they host on XBLA.
The iPad is not a retail store. Amazon, Kindle etc. have their own store.
Yes, Amazon and Kindle have their own store. Let them use that.
Quote:
Its not like this hasnt been pointed out about a dozen times already. ( This forum needs to be moderated so that people with some comprehension skills are allowed to post).
Too bad that the whole of the iOS ecosystem constitutes the storefront and you are wrong.
Quote:
Apple is basically acting as a rentier here.
The iOS ecosystem is not a natural resource but one constructed by Apple. Therefore Apple is not acting as a rentier.
Quote:
Within a few weeks Amazon, Skype, et al are gone.
Amazon maybe. Skype? Why on earth for? Because you chicken littles are claiming the sky is falling? When Apple forbade 3rd party dev tools/scripting people were screaming it would make Unity and other game engines go away. It didn't. They were simply spreading FUD.
Just like you are doing now. If anyone should get modded it's trolls like you.
This is assuming that Amazon passes on the 30% to the owners of the books. They wont and cant do that. You are assuming some nonsensical figures - apparantly a 100% margin on e-books ( but Amazons total margins are 5%).
If a book costs Amazon $5. ( All costs including hosting etc.). And if they dont sell that book for more than a 43% margin ( $7.15) the profit is lost. If they sell at a 50% margin profit is reduced by 90%. You can do the rest of the math yourselves.
Similarly this model affects Skype, Audible, Spotify, and all other content providers who will have much more room to make money on Android.
Its not a viable model.
Where did you get that 5% margin figure? Please provide your source. Amazon pays publishers 70% after deducting "delivery costs" from the sales price (for books between $2.99 and $9.99). Amazon cut gets as high as 65% for other price rage. Please refer to their website.
PS. Skype and the others you mentioned above are not content providers. They are service providers. I doubt this rule applies to them.
Those questions don't even make sense. And Windows isn't a company, Microsoft is.
How many iPods and iPhones less would Apple have sold if Microsoft had blocked iTunes on Windows? A very significant proportion. If MS had asked for a percentage for each iPod/iPhone synced on Windows, how would that have looked?
Comments
They dont host any content.
Apple are not charging to deliver content.
Apple are charging to deliver customers.
C.
For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less.
This is assuming that Amazon passes on the 30% to the owners of the books. They wont and cant do that. You are assuming some nonsensical figures - apparantly a 100% margin on e-books ( but Amazons total margins are 5%).
If a book costs Amazon $5. ( All costs including hosting etc.). And if they dont sell that book for more than a 43% margin ( $7.15) the profit is lost. If they sell at a 50% margin profit is reduced by 90%. You can do the rest of the math yourselves.
Similarly this model affects Skype, Audible, Spotify, and all other content providers who will have much more room to make money on Android.
Its not a viable model.
so major credit cards charge 1.5 - 2.7% for a transaction fee, processing all of the data.
...Apple has decided that they want 30%, AND won't allow publishers to offer a lower price anywhere outside of their store? ridiculous
i should be able to subscribe to a publishers content through the convenience of the app store for a slight upcharge, and still be able to get that subscription directly from the publisher for slightly less.
Credit cards don't offer all of those products for sale, nor do they advertise any of them. They just process the transaction. Apple has a store that all the p,rodents are on, described, sold, and that also hosts reviews and other information. It's not the same as a credit card transaction. People here should understand that.
And they do host much of what they sell, or give away for free. That should be understood as well. Anyone who says that they don't host any of the things they sell, or give away are living in their own worlds. Will they host these subs? In some cases.
What apple is doi g here seems pretty fair, and much better than I was thinking it would be. Apple will be listing and hosting subs that are gotten from their store. They won't be doing that for subs that aren't. It seems pretty clear.
Amazon was brought up. Apple hosts the Kindle app, but not books bought through Amazon's store. That makes sense. The same will be true for subs. If Apple sells the sub, they will host it, if not, then they won't. It's not that difficult to understand.
Amazon, and others don't allow better deals than given in their store, so why should Apple? You have to answer that question. If everyone else is doing that, then Apple should be allowed to demand it as well, or theirs will always be the highest pricing.
They claim there's choice, but developers can't link to their online store from within of the app. Nor can they offer a reduced rate on their website even though their costs are close to 30% lower (there are costs associated with processing your own subscriptions, but not 30%). If they are currently making less than 30% profit on their subscriptions, they have to either take a loss on their in-app subscriptions, abandon the app store, or raise prices everywhere.
As an iPhone owner, I hope they pull out. Apps are what make the iPhone, without them, the iPhone isn't dominant. Amazon, Hulu, Netflix, etc all leaving would be quite the humbling experience for Apple and they'd be forced to change their policies or lose customers. Apple's in app subscription services look pretty good, and Apple does deserve a cut from anyone who chooses to utilize them, but they should be a choice and the cut should be less than 30%.
My big beef is with services that span multiple platforms, not things like the iPad only Daily. If a service is usable on multiple platforms, how can Apple claim that they deserve 30% of the subscription fee when there's no guarantee that an iOS device is even used to access that service 30% of the time.
When you buy a book from Amazon the book is hosted on Amazon servers. When you buy a book through in app App Store, Apple only processes the payment, the book is also hosted on Amazon. Apple ONLY processes the payment, they don't host the content, they don't distribute the content, they only take the 30% cut.
Apple is NOT hosting any data.
False, Apple hosts the free app. So Apple's cut has been 30% of 0.
Now Apple's cut is 30% of in-app subscription purchases which seems fair given you can still buy the subscription outside the app.
For books both the Kindle and Nook apps are free and direct competitors with iBooks. Amazon has or had a no-lower-price policy as well. But they aren't subscriptions anyway.
I guess I'm a bit tainted as a shareholder. Anytime I see Apple doing well to make a profit, I'm good, and if they have the market power to outgun Amazon, Sony or whoever, well, then more power to them. They've earned it..
As a shareholder you should worry. Amazon has their own storefront and only uses Apple to distribute the app. If Apple takes too big of cut then Amazon will move. Likely others will follow suit or not go with Apple to being with. With a "sort of" alternative like android being available it could be the start of an avalanche. Apple needs to tread carefully here as there is a real risk that their whole ecosystem could collapse. I would not like that to happen but I am concerned.
Agreed! After having had success in the entertainment/arts field in conjunction with new media, I entered into the consulting world a little over a year ago. I've worked with many successful retail stores, some who have margins that range anywhere from 40-55%.
To someone who doesn't understand anything about business, this goes through their mind:
"OMG! What a rip off!! That's disgusting how much they mark up!!!!"
To someone who DOES understand how business works, this goes through their mind:
"Yep, that's about normal. They've got employees, power, utilities, insurance, etc. etc. etc."
The iPad is not a retail store. Amazon, Kindle etc. have their own store. Its not like this hasnt been pointed out about a dozen times already. ( This forum needs to be moderated so that people with some comprehension skills are allowed to post).
Apple is basically acting as a rentier here.
in any case being a consultant in Alabama for shit kicker LTD is not the same as running Amazon. Or Sony. Who have already pulled out. Or Skype, who will. Or Amazon, who will.Or all the other content providers who will. Or the European publishers who say they will, and are bringing a court case. They probably know their model better than you.
Within a few weeks Amazon, Skype, et al are gone.
Should Apple give Windows 30% of all sales of music and content on iTunes? If not, why not?
Those questions don't even make sense. And Windows isn't a company, Microsoft is.
For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less. Business decisions are and should not be based on emotions.
Kind of best to just ignore asdasd. They think the world is plug and play in their own version. The last time I looked there was no governing body that unifies all deals to make them equal. Businesses tend to make deals that benefit their companies and those benefits come in many shapes and forms. itunes has been great for the music and film industry and I am sure the publishing industry is going to greatly benefit by this as well. And if you do not like it then switch to a different platform, it is as simple as that.
There is nothing in the App Store guidelines about revenue sharing. There is no legal text on the issue. You have made up your own excuse. ...
That's just the lamest counter argument anyone has made yet, and completely false, since the developer agreement is very explicit about the 30% -- i.e., the revenue sharing you say they don't mention.
Agreed! After having had success in the entertainment/arts field in conjunction with new media, I entered into the consulting world a little over a year ago. I've worked with many successful retail stores, some who have margins that range anywhere from 40-55%.
To someone who doesn't understand anything about business, this goes through their mind:
"OMG! What a rip off!! That's disgusting how much they mark up!!!!"
To someone who DOES understand how business works, this goes through their mind:
"Yep, that's about normal. They've got employees, power, utilities, insurance, etc. etc. etc."
The profit margins in retail stores have little (if anything) to do with the profit margins of companies offering subscription services online.
You can't. The device does not include on-device purchasing. Isn't that odd?
C.
I have an idea, why not let Microsoft charge one percent of the total amount of every invoice written with Word? Or rather written on a Windows PC. That would be a huge untapped revenue pool for Microsoft.
I hope you're being sarcastic. Microsoft is already getting paid for every invoice you write up in Word. You've paid them for that privilege up front, even if you never use the product.
What you're really saying is that Apple should charge for iTunes up front, say, at least as much as Word costs.
Wow.
iTunes/App Store is NOT a credit card processor. IT'S A STORE.
They are SELLING their PRODUCTS to their customers.
Does anybody in this thread know anything about the retail business?
Apple takes a cut- it's THEIR store. Apple is the one who pays the credit card processing fees to Visa/MC/Amex.
Exactly! Don't offer your product via iTunes or the App Store and see where your business is in 5 yrs? I love how Apple is not allowed to make money b/c people buy things b/c of their superior hardware and system?
For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less. Business decisions are and should not be based on emotions.
Questions...
Do you think the publishers will accept 30% less if the eBook was purchased through iTunes rather than directly though the Amazon store?
Wouldn't it be more like a purchase through Apple leaves the publisher with $7 and Amazon with $0?
Surely the publishers established eBook pricing based on cost analysis of the profit they receive selling a hard copy book vs selling an eBook with Amazon's 30% cut.
I see three options:
1. Publishers raise the price of eBooks to cover the Apple tax
2. Amazon display a "please visit our website to buy a book" on the purchase page of the iOS Kindle app
3. Publishers do another cost analysis of the profit they receive selling a hard copy book vs selling an eBook with Amazon's 30% cut as well as Apple's 30% cut and potentially pull books from the iOS Kindle store.
I have an idea, why not let Microsoft charge one percent of the total amount of every invoice written with Word? Or rather written on a Windows PC. That would be a huge untapped revenue pool for Microsoft.
Hey, I have a better idea. Why not let Microsoft charge 70% for every app they host on XBLA.
Oh, apparently they do!
C.
The iPad is not a retail store. Amazon, Kindle etc. have their own store.
Yes, Amazon and Kindle have their own store. Let them use that.
Its not like this hasnt been pointed out about a dozen times already. ( This forum needs to be moderated so that people with some comprehension skills are allowed to post).
Too bad that the whole of the iOS ecosystem constitutes the storefront and you are wrong.
Apple is basically acting as a rentier here.
The iOS ecosystem is not a natural resource but one constructed by Apple. Therefore Apple is not acting as a rentier.
Within a few weeks Amazon, Skype, et al are gone.
Amazon maybe. Skype? Why on earth for? Because you chicken littles are claiming the sky is falling? When Apple forbade 3rd party dev tools/scripting people were screaming it would make Unity and other game engines go away. It didn't. They were simply spreading FUD.
Just like you are doing now. If anyone should get modded it's trolls like you.
This is assuming that Amazon passes on the 30% to the owners of the books. They wont and cant do that. You are assuming some nonsensical figures - apparantly a 100% margin on e-books ( but Amazons total margins are 5%).
If a book costs Amazon $5. ( All costs including hosting etc.). And if they dont sell that book for more than a 43% margin ( $7.15) the profit is lost. If they sell at a 50% margin profit is reduced by 90%. You can do the rest of the math yourselves.
Similarly this model affects Skype, Audible, Spotify, and all other content providers who will have much more room to make money on Android.
Its not a viable model.
Where did you get that 5% margin figure? Please provide your source. Amazon pays publishers 70% after deducting "delivery costs" from the sales price (for books between $2.99 and $9.99). Amazon cut gets as high as 65% for other price rage. Please refer to their website.
PS. Skype and the others you mentioned above are not content providers. They are service providers. I doubt this rule applies to them.
Those questions don't even make sense. And Windows isn't a company, Microsoft is.
How many iPods and iPhones less would Apple have sold if Microsoft had blocked iTunes on Windows? A very significant proportion. If MS had asked for a percentage for each iPod/iPhone synced on Windows, how would that have looked?