Your logic is crazy. You say prices will be higher on the iPad because Apple "won't let the publisher charge less on their own web site". That's your argument?
As for the 30% commission, how is it fair for Apple to charge 30% to the developers of Angry Birds, but not publishers. I'm a former newspaper and magazine publisher, and even I don't see the logic of expecting Apple to go commission-free for us publishers. We publishers get charged for distribution by newsstand distributors, we pay the USPS, we pay our printers, we pay our subscription telemarketing firms, hell, we pay everybody! . . . 30% is a bargain compared to all the other charges we face.
Magazine and newspaper publishers are lucky, damn lucky to make a 10 to 20 percent return on our products -- most don't. The 30% charge, on a price we set, seems reasonable to me. It's better than what Amazon is offering me: they will give me 30%, but they get to set the price.
You're making way too much sense. With all the shrillness here, your post will be ignored. (I thought it would, therefore be useful to highlight it).
Does an Apple computer share the same profit margin as an HP computer? No. If you can't compare profit margins within an industry why would one assume that the profit margin on the sale of a pair of jeans would be the same as one sale of Angry Birds, or in this case a subscription app in the app store?
I never said there were no costs involved in running an online business, I said the profit margins are different and can't be directly compared.
I don't agree that's true. There are large expenses in running these online stores. apple says they make little profit in doing so, and the financial industry that's analyzed this to death over the years agrees. Apple makes just enough profit running iTunes and the App Store to insure it doesn't run into the red. They don't use it as a profit center.
But Amazon does, because that's their business. They must make a decent profit on sales. Same for B&N and others.
Whether Apple is running their own servers or paying for bandwidth, it's expensive. So is the upkeep. There are a lot of people involved.
As long as Apple doesn't want to have their stores become major profit centers, those profits will be marginal, but they can't be compared to companies who are using them for their profitability. Those companies want the same, or even better profits than brick and mortar operations. And that only makes sense, as they still have to ensure their stockholders that they are a good investment.
Pull all 3rd party content from iOS and iTunes and see where Apple is in 5 years.
Love to see that happen! lol... I would imagine that their will be more apps and content added than removed... RE: Sony Music threatening to remove their music from iTunes... its a game of chicken.
Apple survived just fine without the Beatles catalog and still without the Led Zep catalog. eBooks are relatively new and they lived without them... hmmm they actually lived without subscription based service too. Apple is only getting bigger and losing an app or 2 here and there will not effect them all that much. If I can't get a Skype app for the iphone or ipad I will just have to go to the website on my Mac Book Pro.
What do Amazon charge Apple for iBooks sales on the Kindle.
What's that you say? They don't allow it?!!!!
ABUSE OF MARKET POSITION!!!!!!
C.
Irrelevant, it's a different scenario. Apple's free to keep the app store to themselves, much like they have with iTunes and iPods, but the moment they open it up to other developers, they can't manipulate it to give themselves an advantage in other markets such as eBooks. If you read my other posts, probably 80% of my posts are in favor of an Apple practice. I'm not against this because I'm anti-Apple, I'm against it because it's an abuse of market position and it isn't right.
There is no way any publisher walks away from tens of millions of customers - who are all downloading books like crazy. Apple knows this. Amazon knows this.
Amazon is not a publisher. They are a retailer and as such they compete directly with iTunes/iBooks which is also a retailer. If Amazon offered their books through In-App purchases at the same price as on their website they would either have to take a 30% revenue drop or raise the price of the books on their website to the same price as the In-App price to comply. I think they will just pull their app and concentrate on selling eBooks through the Kindle Reader and the other tablets coming later this year. If they do, the publishers will come running to Apple to get their books into iBooks which is exactly what Apple wants.
Yeah, and then we'll see where those companies are as well. Do you really think that Amazon and B&N are doing this for the benefit of the publishers? They're squeezing them pretty hard. Apple is being fairer than they are by just allowing them to sell in competition to them. See how far you get complaining to Amazon or B&N about not being to be able to buy from other retailers in their apps. I'm sure they will respond by opening them up to all others.
It amazes me how many here are defending poor Amazon. They say Apple 30% cut is unfair but they don't mind Amazon getting 65% instead of 30% from publishers who don't meet the following requirements:
- List price of the ebook between $2.99~$9.99
- List price must be at least 20 percent below the lowest physical list price for the physical book
I don't agree that's true. There are large expenses in running these online stores. apple says they make little profit in doing so, and the financial industry that's analyzed this to death over the years agrees. Apple makes just enough profit running iTunes and the App Store to insure it doesn't run into the red. They don't use it as a profit center.
But Amazon does, because that's their business. They must make a decent profit on sales. Same for B&N and others.
Whether Apple is running their own servers or paying for bandwidth, it's expensive. So is the upkeep. There are a lot of people involved.
As long as Apple doesn't want to have their stores become major profit centers, those profits will be marginal, but they can't be compared to companies who are using them for their profitability. Those companies want the same, or even better profits than brick and mortar operations. And that only makes sense, as they still have to ensure their stockholders that they are a good investment.
As far as I know, Amazon makes their profit on volume, not margin. However, my main line of argument wasn't that their margins were incredibly low. All I was saying is that one can't assume they are the same as a retail stores. The comment stemmed from someone justifying the 30% cut based on the retail store experience.
Irrelevant, it's a different scenario. Apple's free to keep the app store to themselves, much like they have with iTunes and iPods, but the moment they open it up to other developers, they can't manipulate it to give themselves an advantage in other markets such as eBooks. If you read my other posts, probably 80% of my posts are in favor of an Apple practice. I'm not against this because I'm anti-Apple, I'm against it because it's an abuse of market position and it isn't right.
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?
How can you get it through your head that Microsoft DID get paid for every person who used itunes on a windows machine? Seriously do you think Windows is free?
How about you walk into a wal-mart and try to open a minishop aisle and not pay anything to wal-mart. GADZOOKS! Why has NOONE thought of this!?!?! Think about it, its a great location, people are there to shop! You bought something there, you can just open your own shop up there too. Heck, maybe you even sold some stuff through wal-mart before. Maybe you are the owner of a company that sells through Wal-mart. Of course without people like you wal-mart would NEVER have sold a single item....so of course, it's your right to walk into wal-mart and use wal-mart to open up your own store with your own rules....hmm forget wal-mart....what did they ever do anyways?
Amazon is not a publisher. They are a retailer and as such they compete directly with iTunes/iBooks which is also a retailer. If Amazon offered their books through In-App purchases at the same price as on their website they would either have to take a 30% revenue drop or raise the price of the books on their website to the same price as the In-App price to comply.
Imagine that Amazon is making $100M selling content through the iPad.
A 70/30 split is extremely good for the publishing market. Keep in mind Amazon keeps 65% on the Kindle and remaining 35% is split between the publisher and the author (they can get a 70/30 deal from Amazon now, thanks to competition from Apple, but it's subject to stringent conditions and only applies to books under $9.99). It only looks bad relative to the 70/30 split of the App Store, which offers so much more. That said, if Apple brought it down to 20%, they could avoid criticism and more publishers would probably get on board.
You clearly are misinformed on the economics of these businesses. In many cases that 30% is going to have a huge impact on profit.
If Amazon is forced into these rules I bet you will see the Kindle app disappear from the App store. It would be more cost effective for Amazon to give iOS users Kindle hardware then to give Apple a 30% cut of the sales.
Being an Apple user is like living in a crime ridden neighborhood when a gang moves in and promises to clean it up. At first it is great, but then the gang starts wanting more and more for their services and soon the neighborhood is worse off.
I would encourage everyone to avoid these in-app purchases and subscriptions.
I would also like to point out the quote in my sig. It seems Steve's views on users are quite clear. They are money machines to suck dry, pure and simple.
-kpluck
You're generalizing too much. And while your colorful story is cute, it doesn't work. No company needs to be in the Apple ecosystem who didn't start there. If they feel they don't want to be there, they don't have to move there, or they can move out.
If they don't, then it shows that they believe being there is better than not being there.
We might as well say the same things about song pricing. I remember when songs were priced between $2.75 and $3.50 per song. That's years ago without taking inflation into account. Music companies didn't think iTunes would take off, so they went along with Apple's 99 cent pricing. Boy, were they wrong! But when Apple went to a higher quality product, they demanded a 30% pay hike. That pay hike has been responsible for the great slowdown in music download growth. So Apple's "strong-arm"tactics were right, and their free pricing was wrong.
Are they making more per song now? Sure. But sales aren't as great as they would have been, so they aren't making as much as they could be.
It's very possible that selling their wares on iTunes, even with a partial pay cut, would prove more profitable than doing it the old way. After all they haven't been successful in selling subs over the Internet yet.
And it must continue to be pointed out that Apple will allow purchasing of these subs out of iTunes or the AppStore without taking a single dime from these companies. It,s not as though Apple is demanding all the money from every sub.
And then there's the other big fight Apple has been having with publishers, and that's the information about the subscriber. That was considered by the publishing industry to be critical, and it's been resolved in their favor. That's a VERY big issue, as most subs aren't paid for by the sub price, it's paid for by the advertising within the publication.
Oh please. Give up. Apple isn't selling anything through iOS. They're selling through their stores which are on devices that have both iOS and OS X on them. Please keep the two things separate.
The problem with all of these Apple restrictions is that they can't enforce each new rule without harming the usefulness of the device in some other way. At what point are you not allowed to put a link to a website of any type? What is next, no opinions other than those approved by Apple are allowed in your content? Little by little they keep locking down everything until there is no more freedom. All the while trying to spin it as if it is a good thing for end users when in fact it is all about control of the market.
We will see if they can win this battle or not. Eventually the publishers and consumers may abandon the platform in frustration if they keep chiseling away at what you are allowed to do. Instead of a rich ecosystem it will turn into a desolate wasteland populated only by brainwashed Apple fanatics. Microsoft may have a chance in this game after all.
The problem with your slippery slope argument is that you haven't shown that the slope is actually slippery, so your argument amounts to little more than an attempt to create and play on fears.
Comments
It's not Apple's role to support Amazon's business model.
Yeah, and it was not MS's role to support Netscape's business modell. They could undercut as they wanted.
Your logic is crazy. You say prices will be higher on the iPad because Apple "won't let the publisher charge less on their own web site". That's your argument?
As for the 30% commission, how is it fair for Apple to charge 30% to the developers of Angry Birds, but not publishers. I'm a former newspaper and magazine publisher, and even I don't see the logic of expecting Apple to go commission-free for us publishers. We publishers get charged for distribution by newsstand distributors, we pay the USPS, we pay our printers, we pay our subscription telemarketing firms, hell, we pay everybody! . . . 30% is a bargain compared to all the other charges we face.
Magazine and newspaper publishers are lucky, damn lucky to make a 10 to 20 percent return on our products -- most don't. The 30% charge, on a price we set, seems reasonable to me. It's better than what Amazon is offering me: they will give me 30%, but they get to set the price.
You're making way too much sense. With all the shrillness here, your post will be ignored. (I thought it would, therefore be useful to highlight it).
I didn't know you can install apps on kindle or that you can buy ibooks outside iTunes
Amazon launched an App development kit.
Betcha they don't allow an iBooks store.
C.
Yeah, and it was not MS's role to support Netscape's business modell. They could undercut as they wanted.
MS successfully bullied Netscape because one had a browser, and the other had the whole goddamn operating system.
Now Apple has an iPad. And Amazon has a Kindle reader. Which seems more equitable.
Are you suggesting the business model behind the Kindle reader is a flop?
C.
Does an Apple computer share the same profit margin as an HP computer? No. If you can't compare profit margins within an industry why would one assume that the profit margin on the sale of a pair of jeans would be the same as one sale of Angry Birds, or in this case a subscription app in the app store?
I never said there were no costs involved in running an online business, I said the profit margins are different and can't be directly compared.
I don't agree that's true. There are large expenses in running these online stores. apple says they make little profit in doing so, and the financial industry that's analyzed this to death over the years agrees. Apple makes just enough profit running iTunes and the App Store to insure it doesn't run into the red. They don't use it as a profit center.
But Amazon does, because that's their business. They must make a decent profit on sales. Same for B&N and others.
Whether Apple is running their own servers or paying for bandwidth, it's expensive. So is the upkeep. There are a lot of people involved.
As long as Apple doesn't want to have their stores become major profit centers, those profits will be marginal, but they can't be compared to companies who are using them for their profitability. Those companies want the same, or even better profits than brick and mortar operations. And that only makes sense, as they still have to ensure their stockholders that they are a good investment.
Pull all 3rd party content from iOS and iTunes and see where Apple is in 5 years.
Love to see that happen! lol... I would imagine that their will be more apps and content added than removed... RE: Sony Music threatening to remove their music from iTunes... its a game of chicken.
Apple survived just fine without the Beatles catalog and still without the Led Zep catalog. eBooks are relatively new and they lived without them... hmmm they actually lived without subscription based service too. Apple is only getting bigger and losing an app or 2 here and there will not effect them all that much. If I can't get a Skype app for the iphone or ipad I will just have to go to the website on my Mac Book Pro.
What do Amazon charge Apple for iBooks sales on the Kindle.
What's that you say? They don't allow it?!!!!
ABUSE OF MARKET POSITION!!!!!!
C.
Irrelevant, it's a different scenario. Apple's free to keep the app store to themselves, much like they have with iTunes and iPods, but the moment they open it up to other developers, they can't manipulate it to give themselves an advantage in other markets such as eBooks. If you read my other posts, probably 80% of my posts are in favor of an Apple practice. I'm not against this because I'm anti-Apple, I'm against it because it's an abuse of market position and it isn't right.
There is no way any publisher walks away from tens of millions of customers - who are all downloading books like crazy. Apple knows this. Amazon knows this.
Amazon is not a publisher. They are a retailer and as such they compete directly with iTunes/iBooks which is also a retailer. If Amazon offered their books through In-App purchases at the same price as on their website they would either have to take a 30% revenue drop or raise the price of the books on their website to the same price as the In-App price to comply. I think they will just pull their app and concentrate on selling eBooks through the Kindle Reader and the other tablets coming later this year. If they do, the publishers will come running to Apple to get their books into iBooks which is exactly what Apple wants.
Yeah, and then we'll see where those companies are as well. Do you really think that Amazon and B&N are doing this for the benefit of the publishers? They're squeezing them pretty hard. Apple is being fairer than they are by just allowing them to sell in competition to them. See how far you get complaining to Amazon or B&N about not being to be able to buy from other retailers in their apps. I'm sure they will respond by opening them up to all others.
It amazes me how many here are defending poor Amazon. They say Apple 30% cut is unfair but they don't mind Amazon getting 65% instead of 30% from publishers who don't meet the following requirements:
- List price of the ebook between $2.99~$9.99
- List price must be at least 20 percent below the lowest physical list price for the physical book
Amazon launch an App development kit.
Betcha they don't allow an iBooks store.
C.
Reality is Kindle doesn't have apps and you can't buy iBooks outside iTunes. Ah, and you CAN buy B&N books from Kindle
I don't agree that's true. There are large expenses in running these online stores. apple says they make little profit in doing so, and the financial industry that's analyzed this to death over the years agrees. Apple makes just enough profit running iTunes and the App Store to insure it doesn't run into the red. They don't use it as a profit center.
But Amazon does, because that's their business. They must make a decent profit on sales. Same for B&N and others.
Whether Apple is running their own servers or paying for bandwidth, it's expensive. So is the upkeep. There are a lot of people involved.
As long as Apple doesn't want to have their stores become major profit centers, those profits will be marginal, but they can't be compared to companies who are using them for their profitability. Those companies want the same, or even better profits than brick and mortar operations. And that only makes sense, as they still have to ensure their stockholders that they are a good investment.
As far as I know, Amazon makes their profit on volume, not margin. However, my main line of argument wasn't that their margins were incredibly low. All I was saying is that one can't assume they are the same as a retail stores. The comment stemmed from someone justifying the 30% cut based on the retail store experience.
MS successfully bullied Netscape because one had a browser, and the other had the whole goddamn operating system.
The point is that whether a certain behaviour is legal or not can depend on something like market share.
Irrelevant, it's a different scenario. Apple's free to keep the app store to themselves, much like they have with iTunes and iPods, but the moment they open it up to other developers, they can't manipulate it to give themselves an advantage in other markets such as eBooks. If you read my other posts, probably 80% of my posts are in favor of an Apple practice. I'm not against this because I'm anti-Apple, I'm against it because it's an abuse of market position and it isn't right.
Oh right.
Like the Xbox? Or the PS3?
Or this..
http://www.eweek.com/c/a/Application...nt-Kit-525340/
C.
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?
How can you get it through your head that Microsoft DID get paid for every person who used itunes on a windows machine? Seriously do you think Windows is free?
How about you walk into a wal-mart and try to open a minishop aisle and not pay anything to wal-mart. GADZOOKS! Why has NOONE thought of this!?!?! Think about it, its a great location, people are there to shop! You bought something there, you can just open your own shop up there too. Heck, maybe you even sold some stuff through wal-mart before. Maybe you are the owner of a company that sells through Wal-mart. Of course without people like you wal-mart would NEVER have sold a single item....so of course, it's your right to walk into wal-mart and use wal-mart to open up your own store with your own rules....hmm forget wal-mart....what did they ever do anyways?
Amazon is not a publisher. They are a retailer and as such they compete directly with iTunes/iBooks which is also a retailer. If Amazon offered their books through In-App purchases at the same price as on their website they would either have to take a 30% revenue drop or raise the price of the books on their website to the same price as the In-App price to comply.
Imagine that Amazon is making $100M selling content through the iPad.
Why would they stop doing so?
C.
Oh right.
Like the Xbox? Or the PS3?
The difference here is that neither the Xbox nor the PS3 had a dominant market position. If one of them had, they could be in trouble.
But in the app market already has an 82% market share, that is far higher than the Xbox or PS3.
http://www.isuppli.com/Media-Researc...t-in-2010.aspx
You clearly are misinformed on the economics of these businesses. In many cases that 30% is going to have a huge impact on profit.
If Amazon is forced into these rules I bet you will see the Kindle app disappear from the App store. It would be more cost effective for Amazon to give iOS users Kindle hardware then to give Apple a 30% cut of the sales.
Being an Apple user is like living in a crime ridden neighborhood when a gang moves in and promises to clean it up. At first it is great, but then the gang starts wanting more and more for their services and soon the neighborhood is worse off.
I would encourage everyone to avoid these in-app purchases and subscriptions.
I would also like to point out the quote in my sig. It seems Steve's views on users are quite clear. They are money machines to suck dry, pure and simple.
-kpluck
You're generalizing too much. And while your colorful story is cute, it doesn't work. No company needs to be in the Apple ecosystem who didn't start there. If they feel they don't want to be there, they don't have to move there, or they can move out.
If they don't, then it shows that they believe being there is better than not being there.
We might as well say the same things about song pricing. I remember when songs were priced between $2.75 and $3.50 per song. That's years ago without taking inflation into account. Music companies didn't think iTunes would take off, so they went along with Apple's 99 cent pricing. Boy, were they wrong! But when Apple went to a higher quality product, they demanded a 30% pay hike. That pay hike has been responsible for the great slowdown in music download growth. So Apple's "strong-arm"tactics were right, and their free pricing was wrong.
Are they making more per song now? Sure. But sales aren't as great as they would have been, so they aren't making as much as they could be.
It's very possible that selling their wares on iTunes, even with a partial pay cut, would prove more profitable than doing it the old way. After all they haven't been successful in selling subs over the Internet yet.
And it must continue to be pointed out that Apple will allow purchasing of these subs out of iTunes or the AppStore without taking a single dime from these companies. It,s not as though Apple is demanding all the money from every sub.
And then there's the other big fight Apple has been having with publishers, and that's the information about the subscriber. That was considered by the publishing industry to be critical, and it's been resolved in their favor. That's a VERY big issue, as most subs aren't paid for by the sub price, it's paid for by the advertising within the publication.
Windows is a platform, iOS is a platform.
Oh please. Give up. Apple isn't selling anything through iOS. They're selling through their stores which are on devices that have both iOS and OS X on them. Please keep the two things separate.
The problem with all of these Apple restrictions is that they can't enforce each new rule without harming the usefulness of the device in some other way. At what point are you not allowed to put a link to a website of any type? What is next, no opinions other than those approved by Apple are allowed in your content? Little by little they keep locking down everything until there is no more freedom. All the while trying to spin it as if it is a good thing for end users when in fact it is all about control of the market.
We will see if they can win this battle or not. Eventually the publishers and consumers may abandon the platform in frustration if they keep chiseling away at what you are allowed to do. Instead of a rich ecosystem it will turn into a desolate wasteland populated only by brainwashed Apple fanatics. Microsoft may have a chance in this game after all.
The problem with your slippery slope argument is that you haven't shown that the slope is actually slippery, so your argument amounts to little more than an attempt to create and play on fears.