If Microsoft had tried to charge a 30% toll booth fee for content displayed on Windows, Apple would have mocked them for being greedy. Having been an Apple fan and user for years, its sad to see Apple heading down the same greedy path.
I don't recall MS being mocked or taken to task for being "greedy." I recall them being mocked for making shitty software and using their monopoly to make it difficult to avoid using.
Quote:
Apple doesn't allow apps other than those approved by them to be loaded on iOS devices meaning that I have zero choices for using an iOS device and getting the content or apps I want.
Unless by some miracle you happen to want one of the vast array of apps and content that is available.
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My choices to protest their Draconian software and commerce policies are: don't use the well-designed hardware? This is the near opposite of the 'openness' that Apple supposedly embraces as a company.
Since when has Apple declared themselves as embracing "openness" as a general principle? You seem to be just making up standards and comparisons willy-nilly.
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And for the altruistic who think that Apple are protecting their interests by not sharing marketing data with publishers... did you ever wonder why the your iTunes app and music suggestions seem to be based on other stuff you've bought from Apple? Apple has ZERO problem using previous purchase information to get you to purchase more stuff from them.
Pretty much every online content provided I know of uses your patterns of consumption to recommend related content. That's not remotely the same thing as selling your information to marketers.
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Has anybody done a Steve Jobs/Bill Gates mashup yet?
And for the altruistic who think that Apple are protecting their interests by not sharing marketing data with publishers... did you ever wonder why the your iTunes app and music suggestions seem to be based on other stuff you've bought from Apple? Apple has ZERO problem using previous purchase information to get you to purchase more stuff from them.
Actually genius suggestions are based on your entire music library, not just what you purchased from the iTunes.
If i don't want to see the suggestions i simply close the sidebar, (the little box with the arrow in it on the the bottom right).
Most people don't mind the genius suggestions because they are about discovering new music or rediscovering old favorites.
What we don't want is our music purchase information to be sold to car dealerships, insurance salesman or whomever for them to target it us with unwanted marketing.
I'm starting to understand why Apple's 30% take isn't an issue with periodicals. If the subscription price is only 20% of the cost of production, then Apple's charge is only 6% of their total cost, not bad when Apple is handling the billing and distribution. But I do wonder what will happen if a popular magazine charges virtually nothing for subscriptions and makes its profits on the advertising a huge circulation brings in. If it included lots of color pictures, Apple, who is now making almost nothing, could end up getting burned by all the data charges and demands on their servers. I assume in that case, Apple's going to be making money on its own ads in the magazine, but that assumes it can start to attract advertisers.
Apple won't be hosting the subscription materials. Only the main app is hosted at Apple's servers. I believe it will work similar to In App purchase. Basically the customer is represented with the content available for purchase inside the app. Apple will handle the financial transaction and will tell the app if the transaction is approved or not. If approved then the app will download the content from the developers server or unlock the purchased feature.
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But there is a serious problem if Apple attempts to transfer its periodical model into the world of ebooks. I know, because that's the field I'm in. Books don't have ads and there are strong indications that the public would either reject books with ads completely or make a great effort to avoid looking at those ads, resulting in little ad revenue. People browse magazines, so ads aren't that disruptive. They immerse themselves in books, so ads are a gross nuisance.
eBook readers from Amazon and B&N have to provide their eBooks for iOS customers through In App purchase and will be subjected to the 30%.
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Also, unlike magazines, book publishers depended totally on what they get at wholesale for their books. Don't forget that, because it is the critical factor in this debate. For distribution through Apple's iBookstore, that 30% charge doesn't matter. That's what Amazon is also taking for their sales, distribution and billing. That's fine. For printed books, the publisher may be keeping 25% of the retail price, so getting 70% of retail price is great. That's one reason why ebooks can sell for less.
The trouble comes when Apple wants to grab 30% of the retail price not just when an ebook is sold through their iBookstore but when it is sold through Amazon, B&N, or Sony apps. In those cases, the ebook is still being processed by Amazon or the others, so they're still earning their 30% legitimately. But Apple is reaping a 30% income for handling a 3% credit card processing fee. That is what is grotesque.
Amazon charges publishers more than 65%. There are strict requirements to qualify for the 30% rate. This is mentioned in the article.
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Given that each of the other online bookstores has substantial costs, those vendors will have to pass along all or most of that 30% charge to me. In a free market, I'd simply raise my Apple price by 30%, so my profit from books sold through Apple is the same as for books sold through Amazon. That would be fair. If Apple wants to get fat profits from doing nothing, then Apple will have to contend with low sales.
But Apple wants to prohibit me from doing that. They want my cost for selling to Amazon's Kindle apps on iPads to be twice that of selling to Apple's iBooks apps on iPads, even though the reader experience is the same. That's where they're likely to get in deep legal trouble, since it is obviously a ploy to drive away competition.
I doubt there will be any price increase. Most people who use the Kindle or Nook apps on iOS do so because they own a Kindle or Nook. So the number of ebooks bought through those apps might not be big.
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They also want my income from selling the same Kindle ebook to be a substantial 30% less when a customer buys it on an iPad than when they buy it on their Mac/PC but designate it to be downloaded to an iPad. In the latter case, it's the same book being installed on the same device, so why is it providing a radically different income for the publisher? It isn't just hard to come up with a rational basis for that strange corporate policy. It's impossible.
Amazon gets a cut from publishers because they offer them access to their devices. Shouldn't Apple be entitled to a cut from Amazon because they are giving them access to customers using iOS devices as well?! This is more common than you think. It even exist in retail. I am sure Best Buy gets a cut from Apple for each Mac or Apple device sold at their Best Buy stores or website even though they are sold at Apple stores for the same price. Online retailers sell you goods at a lower price and most of them ship what you buy directly from the manufacturers warehouse. They get a cut too. It is all about exposure. It is better to sell X+Y quantities than X alone even if the profit from Y is much less than X.
If Apple wants to charge Amazon 30% of all the sales from the Kindle App, why cant Amazon charge Apple 30% of all iBooks read/purchased from the Kindle device. That is fair game right?
But wait a minute - Amazon does not even ALLOW iBooks to be viewed on the Kindle! So, Amazon wants to exploit Apple's device and sell books there, but will not allow Apple to exploit Amazon's device! How fair does that look?
Amazon should be happy they can sell at all in the AppStore. Because they dont offer Apple that privilege!
I think Apple is fully aware that these terms would end up forcing Kindle app out of the AppStore - and they have absolutely no issue if that happens. Maybe, they even want that eventuality to happen.
The 30% cut is not at all an issue for any direct publisher. It is only an issue for a reseller. As far as resellers are concerned, the really interesting thing is that both resellers who are impacted (so far) already have their own devices, and DO NOT ALLOW APPLE TO SELL CONTENT ON THOSE DEVICES. Why should they expect Apple to allow them to sell on Apple's device?
All the posters who are bringing up Analogies - here is an analogy for you. If Microsoft wants to sell MS Office for the Mac, they should also allow Apple to sell iWork for Windows. It should be totally up to Apple whether they want to sell iWork for Windows or not. If MS restricts Apple from selling iWork for Windows, then Apple should be free to either restrict sales of MS Office for Mac, or impose other conditions.
If Apple wants to charge Amazon 30% of all the sales from the Kindle App, why cant Amazon charge Apple 30% of all iBooks read/purchased from the Kindle device. That is fair game right?
But wait a minute - Amazon does not even ALLOW iBooks to be viewed on the Kindle! So, Amazon wants to exploit Apple's device and sell books there, but will not allow Apple to exploit Amazon's device! How fair does that look?
Amazon should be happy they can sell at all in the AppStore. Because they dont offer Apple that privilege!
I think Apple is fully aware that these terms would end up forcing Kindle app out of the AppStore - and they have absolutely no issue if that happens. Maybe, they even want that eventuality to happen.
The 30% cut is not at all an issue for any direct publisher. It is only an issue for a reseller. As far as resellers are concerned, the really interesting thing is that both resellers who are impacted (so far) already have their own devices, and DO NOT ALLOW APPLE TO SELL CONTENT ON THOSE DEVICES. Why should they expect Apple to allow them to sell on Apple's device?
All the posters who are bringing up Analogies - here is an analogy for you. If Microsoft wants to sell MS Office for the Mac, they should also allow Apple to sell iWork for Windows. It should be totally up to Apple whether they want to sell iWork for Windows or not. If MS restricts Apple from selling iWork for Windows, then Apple should be free to either restrict sales of MS Office for Mac, or impose other conditions.
Correction: apple would not allow ibooks on any other platform
Google isn't offering publishers a listing in a visible marketplace, because it doesn't have an equivalent to iTunes. Android Market, unlike Apple's App Store, only gets traffic from the installed base of Android devices that choose to install it. Google doesn't mandate that all Android licensees include its Market, so there are no reliable metrics on the size of this audience. In contrast, every iOS device (160 million) and every Mac and PC desktop copy of iTunes includes Apple's App Store. That's a vast market.
Wow, that's got to be one of the stupidest things I've read. Android Market has the same audience size as the App Store, if not technically bigger since it's on the web (or is the author clueless about market.android.com?). Meanwhile for the iOS App Store, you need to have either an iOS device or iTunes installed.
But that's not the stupid part to me. It's the implied claim that because someone has iTunes, they're browsing the App Store. Strangely, as someone who doesn't own an iOS device, I've never visited the App Store. And as someone who doesn't own an Android device either, I had never visited the Android Market until 5 minutes ago to verify the link.
Sorry addabox, but it's hard to discuss a topic when the "news article" that's supposed to be providing information is based on BS. If you're going to debate things based on a Dilger article, of course everything Apple does is going to seem great and anything a competitor does is going to seem like crap. It's his modus operandi.
As for my thoughts, it seems obvious that every ereader app linked to a book seller (Nook, Kindle, Sony Reader, etc.) is going to be disappearing from the App Store come June. Sure, Amazon might also sell newspaper and magazine subscriptions but I'm guessing they make up only a small fraction of any profit from the Kindle Store. Selling books in-app is going to be a losing game for everyone but Apple now so soon the iBookstore will be the only option left. Is that part of Apple's goal?
As an author, the new policy gives me the chills. Subscriptions and eBooks are not the same.
The big problem here is we don't understand the margins involved in eBook publishing, other than that paper, warehousing, and transportation costs are eliminated and reduced - and the product is discounted as a result. Proportionately? Who knows? (I do know authors who get paper cover price-based royalties or better in their contracts, so far.)
So Apple takes 30% of the price the publisher wants to sell an iBook for and figures they can take 30% on Kindle books, too? That means, of course, that to provide a read-anywhere experience, Amazon has to lose 30% off the top of whatever margin they get for a Kindle book. But wait... I recollect reading somewhere that Amazon adjusted their margin to charge 30% of what the publisher wanted it to sell for on Amazon. Doesn't that sound like 0% when sold on the iOS Kindle App? Maybe I'm wrong and Amazon is buying wholesale and the the mark up is greater? Maybe Amazon will push the publishers and make them pay a higher margin if the book sells on the Kindle App?
The saving grace here is that perhaps the previous poster is right and sales on the Kindle will be the majority of sales made. Maybe Amazon has a feel for this. If not, in-app purchases on the Kindle App could be an expensive bet.
(Where will Kindle, Nook, etc. owners read more? I very much like the reading experience on the Kindle. On the other hand, on my iPhone the experience it is good enough that I'm okay using it when I don't have the Kindle around. I expect to buy an iPad this year, but I don't expect to walk around reading it, to read in the gym, etc. An iPad is too expensive. It will be strictly an on the couch experience. Except for illustrated books where I expect it to be a go-to device.)
The worst case scenario is two fold. First, Amazon, B&N, and Sony retreat from the app store and a certain percentage of sales for authors is lost. Second, worse, these gorillas force publishers to lower prices, which in turn means authors will take a bath on future sales. (We authors are mostly small fish; best-selling authors are a rarefied minority.)
If I were to prognosticate, I think the path of least resistance is that in August Amazon Kindle, B&N Nook, and Sony Reader will debut HTML5 apps... and Apple looses. One size does not fit all.
Here's what my income would be like for various versions and means of sale:
* Sold on Amazon's webpage or a Kindle for Kindles and Kindle apps on any device, I get $7.00
--Apple does nothing and gets nothing.
* Sold on the iBookstore for iBooks on iPads and iPhones, I get $7.00
--Apple handles all the distribution, billing and display while getting $3.00, just like Amazon above.
*Sold on an iPad for the Kindle app on that iPad or any other device, I get $4.00
--Apple does nothing but process the billing and yet gets $6.00
Note just how crazy that scheme is. Apple iBookstore scheme is fair. They earn what Amazon is earning. But notice the third case, where Apple earns twice as much when it does almost nothing as when it is running its own online store. That's where Apple is likely to get in deep, deep trouble with the federal government. There's no rationale basis for that difference except as an attempt by Apple to crush its competition.
I appreciate your perspective, but in the last case wouldn't Apple and Amazon both get $ 3.00? \
I have an idea. How about we use this thread to discuss the relative merits of the three subscription models described, instead of spending a lot of time railing against Apple Insider and its hideous bias and horrible standards of journalism etc etc.
Kind of difficult to discuss "relative merits" where they're presented with "hideous bias and horrible standards of journalism". When the article is written with such an obviously polarizing slant, how do you expect any sort of real discussion.
Maybe you should have written:
"I have an idea. How about we use this thread to discuss the relative merits of the three subscription models as they actually exist, instead of spending a lot of time debating a slanted article. Apple Insider and its hideous bias and horrible standards of journalism should be revised and improved to enable such a discussion."
Kind of difficult to discuss "relative merits" where they're presented with "hideous bias and horrible standards of journalism". When the article is written with such an obviously polarizing slant, how do you expect any sort of real discussion.
Maybe you should have written:
"I have an idea. How about we use this thread to discuss the relative merits of the three subscription models as they actually exist, instead of spending a lot of time debating a slanted article. Apple Insider and its hideous bias and horrible standards of journalism should be revised and improved to enable such a discussion."
Actually, it is really easy. Using your reading comprehension skills start where you see a clear bias or slant and provide us with the truth as you know it.
I have an idea. How about we use this thread to discuss the relative merits of the three subscription models described, instead of spending a lot of time railing against Apple Insider and its hideous bias and horrible standards of journalism etc etc.
Nice idea, but we'd be to much better start if the discussion is introduced by at least somewhat balanced article, not just another rant about companies that dare to compete against divine Apple.
One misunderstanding is that Apple is only providing payment services for in app purchases. Storage, bandwidth, etc. are paid by the vender/developer.
The whiners aren't complaining about the exposure the App store gives developers, their complaining that Apple wants 30% of your subscription rate while offering little else except credit card processing.
Here's my example for Dropbox:
Let's take an example, Dropbox has their $10 a month plan for 50GB. They probably get pretty good rates from Amazon for S3 storage, let's make it $.10 a GB. So a user is costing Dropbox $5 a month if they use all their storage. Now Dropbox also has a bunch of free loaders, using 2GB up to 8GB. I don't know the ratio of paying customers to freebies, let's say it's 7 to 1. So the paying subscriber has to cover the freebies, around another ~$2.00. That means dropbox gets $3.00 for each paying user. Now if a user subscribes through the Dropbox app, Dropbox will make no profit from that user... Forever.
If Apple doesn't change, say goodbye to Netflix, Kindle, Hulu+, RedBox, Evernote, etc. on iOS.
Controlling how a publisher does their business outside of the Apple ecosystem is not fine. This kind of shit will not go down well with the European regulators.
I think what you are missing is that an iPad or an iPhone is a general-purpose device, a computer, that you buy and own.
Apple wants to take a 30% cut on any purchases you make with your device, even if you make those purchases through a third-party application.
If Microsoft or Dell did this, then Apple would need to cough up 30% of everything they sold through the version of iTunes running on Windows, which is an OS, just like iOS. iTunes is a third party app running on Windows. Windows is not curated, so Microsoft does not get a dime.
Put another way, Apple by this move is declaring iOS is not to be a curated OS. Rather, they are saying that each iOS device is a Point of Sale that belongs to Apple.
Would be fun if Microsoft suddenly required a 30% cut on any iTunes purchase made "thanks to its Windows system". I can envision DED explaining just how this "has already happened once" and "is fundamentally different from Apple's methods". Oh, the LOLZ. DED made my day again
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What did apple do to make "premium" "differentiated, more attractive music experience"? All they did was start selling music online. Whoopdy doo.
Its called the iPod + iTunes which resulted in the most popular music player and the largest music retailer in world.
If Microsoft had tried to charge a 30% toll booth fee for content displayed on Windows, Apple would have mocked them for being greedy. Having been an Apple fan and user for years, its sad to see Apple heading down the same greedy path.
I don't recall MS being mocked or taken to task for being "greedy." I recall them being mocked for making shitty software and using their monopoly to make it difficult to avoid using.
Apple doesn't allow apps other than those approved by them to be loaded on iOS devices meaning that I have zero choices for using an iOS device and getting the content or apps I want.
Unless by some miracle you happen to want one of the vast array of apps and content that is available.
My choices to protest their Draconian software and commerce policies are: don't use the well-designed hardware? This is the near opposite of the 'openness' that Apple supposedly embraces as a company.
Since when has Apple declared themselves as embracing "openness" as a general principle? You seem to be just making up standards and comparisons willy-nilly.
And for the altruistic who think that Apple are protecting their interests by not sharing marketing data with publishers... did you ever wonder why the your iTunes app and music suggestions seem to be based on other stuff you've bought from Apple? Apple has ZERO problem using previous purchase information to get you to purchase more stuff from them.
Pretty much every online content provided I know of uses your patterns of consumption to recommend related content. That's not remotely the same thing as selling your information to marketers.
Has anybody done a Steve Jobs/Bill Gates mashup yet?
Gosh, that sounds like a hoot.
And for the altruistic who think that Apple are protecting their interests by not sharing marketing data with publishers... did you ever wonder why the your iTunes app and music suggestions seem to be based on other stuff you've bought from Apple? Apple has ZERO problem using previous purchase information to get you to purchase more stuff from them.
Actually genius suggestions are based on your entire music library, not just what you purchased from the iTunes.
If i don't want to see the suggestions i simply close the sidebar, (the little box with the arrow in it on the the bottom right).
Most people don't mind the genius suggestions because they are about discovering new music or rediscovering old favorites.
What we don't want is our music purchase information to be sold to car dealerships, insurance salesman or whomever for them to target it us with unwanted marketing.
Great analysis!
I'm starting to understand why Apple's 30% take isn't an issue with periodicals. If the subscription price is only 20% of the cost of production, then Apple's charge is only 6% of their total cost, not bad when Apple is handling the billing and distribution. But I do wonder what will happen if a popular magazine charges virtually nothing for subscriptions and makes its profits on the advertising a huge circulation brings in. If it included lots of color pictures, Apple, who is now making almost nothing, could end up getting burned by all the data charges and demands on their servers. I assume in that case, Apple's going to be making money on its own ads in the magazine, but that assumes it can start to attract advertisers.
Apple won't be hosting the subscription materials. Only the main app is hosted at Apple's servers. I believe it will work similar to In App purchase. Basically the customer is represented with the content available for purchase inside the app. Apple will handle the financial transaction and will tell the app if the transaction is approved or not. If approved then the app will download the content from the developers server or unlock the purchased feature.
But there is a serious problem if Apple attempts to transfer its periodical model into the world of ebooks. I know, because that's the field I'm in. Books don't have ads and there are strong indications that the public would either reject books with ads completely or make a great effort to avoid looking at those ads, resulting in little ad revenue. People browse magazines, so ads aren't that disruptive. They immerse themselves in books, so ads are a gross nuisance.
eBook readers from Amazon and B&N have to provide their eBooks for iOS customers through In App purchase and will be subjected to the 30%.
Also, unlike magazines, book publishers depended totally on what they get at wholesale for their books. Don't forget that, because it is the critical factor in this debate. For distribution through Apple's iBookstore, that 30% charge doesn't matter. That's what Amazon is also taking for their sales, distribution and billing. That's fine. For printed books, the publisher may be keeping 25% of the retail price, so getting 70% of retail price is great. That's one reason why ebooks can sell for less.
The trouble comes when Apple wants to grab 30% of the retail price not just when an ebook is sold through their iBookstore but when it is sold through Amazon, B&N, or Sony apps. In those cases, the ebook is still being processed by Amazon or the others, so they're still earning their 30% legitimately. But Apple is reaping a 30% income for handling a 3% credit card processing fee. That is what is grotesque.
Amazon charges publishers more than 65%. There are strict requirements to qualify for the 30% rate. This is mentioned in the article.
Given that each of the other online bookstores has substantial costs, those vendors will have to pass along all or most of that 30% charge to me. In a free market, I'd simply raise my Apple price by 30%, so my profit from books sold through Apple is the same as for books sold through Amazon. That would be fair. If Apple wants to get fat profits from doing nothing, then Apple will have to contend with low sales.
But Apple wants to prohibit me from doing that. They want my cost for selling to Amazon's Kindle apps on iPads to be twice that of selling to Apple's iBooks apps on iPads, even though the reader experience is the same. That's where they're likely to get in deep legal trouble, since it is obviously a ploy to drive away competition.
I doubt there will be any price increase. Most people who use the Kindle or Nook apps on iOS do so because they own a Kindle or Nook. So the number of ebooks bought through those apps might not be big.
They also want my income from selling the same Kindle ebook to be a substantial 30% less when a customer buys it on an iPad than when they buy it on their Mac/PC but designate it to be downloaded to an iPad. In the latter case, it's the same book being installed on the same device, so why is it providing a radically different income for the publisher? It isn't just hard to come up with a rational basis for that strange corporate policy. It's impossible.
Amazon gets a cut from publishers because they offer them access to their devices. Shouldn't Apple be entitled to a cut from Amazon because they are giving them access to customers using iOS devices as well?! This is more common than you think. It even exist in retail. I am sure Best Buy gets a cut from Apple for each Mac or Apple device sold at their Best Buy stores or website even though they are sold at Apple stores for the same price. Online retailers sell you goods at a lower price and most of them ship what you buy directly from the manufacturers warehouse. They get a cut too. It is all about exposure. It is better to sell X+Y quantities than X alone even if the profit from Y is much less than X.
But wait a minute - Amazon does not even ALLOW iBooks to be viewed on the Kindle! So, Amazon wants to exploit Apple's device and sell books there, but will not allow Apple to exploit Amazon's device! How fair does that look?
Amazon should be happy they can sell at all in the AppStore. Because they dont offer Apple that privilege!
I think Apple is fully aware that these terms would end up forcing Kindle app out of the AppStore - and they have absolutely no issue if that happens. Maybe, they even want that eventuality to happen.
The 30% cut is not at all an issue for any direct publisher. It is only an issue for a reseller. As far as resellers are concerned, the really interesting thing is that both resellers who are impacted (so far) already have their own devices, and DO NOT ALLOW APPLE TO SELL CONTENT ON THOSE DEVICES. Why should they expect Apple to allow them to sell on Apple's device?
All the posters who are bringing up Analogies - here is an analogy for you. If Microsoft wants to sell MS Office for the Mac, they should also allow Apple to sell iWork for Windows. It should be totally up to Apple whether they want to sell iWork for Windows or not. If MS restricts Apple from selling iWork for Windows, then Apple should be free to either restrict sales of MS Office for Mac, or impose other conditions.
If Apple wants to charge Amazon 30% of all the sales from the Kindle App, why cant Amazon charge Apple 30% of all iBooks read/purchased from the Kindle device. That is fair game right?
But wait a minute - Amazon does not even ALLOW iBooks to be viewed on the Kindle! So, Amazon wants to exploit Apple's device and sell books there, but will not allow Apple to exploit Amazon's device! How fair does that look?
Amazon should be happy they can sell at all in the AppStore. Because they dont offer Apple that privilege!
I think Apple is fully aware that these terms would end up forcing Kindle app out of the AppStore - and they have absolutely no issue if that happens. Maybe, they even want that eventuality to happen.
The 30% cut is not at all an issue for any direct publisher. It is only an issue for a reseller. As far as resellers are concerned, the really interesting thing is that both resellers who are impacted (so far) already have their own devices, and DO NOT ALLOW APPLE TO SELL CONTENT ON THOSE DEVICES. Why should they expect Apple to allow them to sell on Apple's device?
All the posters who are bringing up Analogies - here is an analogy for you. If Microsoft wants to sell MS Office for the Mac, they should also allow Apple to sell iWork for Windows. It should be totally up to Apple whether they want to sell iWork for Windows or not. If MS restricts Apple from selling iWork for Windows, then Apple should be free to either restrict sales of MS Office for Mac, or impose other conditions.
Correction: apple would not allow ibooks on any other platform
Google isn't offering publishers a listing in a visible marketplace, because it doesn't have an equivalent to iTunes. Android Market, unlike Apple's App Store, only gets traffic from the installed base of Android devices that choose to install it. Google doesn't mandate that all Android licensees include its Market, so there are no reliable metrics on the size of this audience. In contrast, every iOS device (160 million) and every Mac and PC desktop copy of iTunes includes Apple's App Store. That's a vast market.
Wow, that's got to be one of the stupidest things I've read. Android Market has the same audience size as the App Store, if not technically bigger since it's on the web (or is the author clueless about market.android.com?). Meanwhile for the iOS App Store, you need to have either an iOS device or iTunes installed.
But that's not the stupid part to me. It's the implied claim that because someone has iTunes, they're browsing the App Store. Strangely, as someone who doesn't own an iOS device, I've never visited the App Store. And as someone who doesn't own an Android device either, I had never visited the Android Market until 5 minutes ago to verify the link.
Sorry addabox, but it's hard to discuss a topic when the "news article" that's supposed to be providing information is based on BS. If you're going to debate things based on a Dilger article, of course everything Apple does is going to seem great and anything a competitor does is going to seem like crap. It's his modus operandi.
As for my thoughts, it seems obvious that every ereader app linked to a book seller (Nook, Kindle, Sony Reader, etc.) is going to be disappearing from the App Store come June. Sure, Amazon might also sell newspaper and magazine subscriptions but I'm guessing they make up only a small fraction of any profit from the Kindle Store. Selling books in-app is going to be a losing game for everyone but Apple now so soon the iBookstore will be the only option left. Is that part of Apple's goal?
The big problem here is we don't understand the margins involved in eBook publishing, other than that paper, warehousing, and transportation costs are eliminated and reduced - and the product is discounted as a result. Proportionately? Who knows? (I do know authors who get paper cover price-based royalties or better in their contracts, so far.)
So Apple takes 30% of the price the publisher wants to sell an iBook for and figures they can take 30% on Kindle books, too? That means, of course, that to provide a read-anywhere experience, Amazon has to lose 30% off the top of whatever margin they get for a Kindle book. But wait... I recollect reading somewhere that Amazon adjusted their margin to charge 30% of what the publisher wanted it to sell for on Amazon. Doesn't that sound like 0% when sold on the iOS Kindle App? Maybe I'm wrong and Amazon is buying wholesale and the the mark up is greater? Maybe Amazon will push the publishers and make them pay a higher margin if the book sells on the Kindle App?
The saving grace here is that perhaps the previous poster is right and sales on the Kindle will be the majority of sales made. Maybe Amazon has a feel for this. If not, in-app purchases on the Kindle App could be an expensive bet.
(Where will Kindle, Nook, etc. owners read more? I very much like the reading experience on the Kindle. On the other hand, on my iPhone the experience it is good enough that I'm okay using it when I don't have the Kindle around. I expect to buy an iPad this year, but I don't expect to walk around reading it, to read in the gym, etc. An iPad is too expensive. It will be strictly an on the couch experience. Except for illustrated books where I expect it to be a go-to device.)
The worst case scenario is two fold. First, Amazon, B&N, and Sony retreat from the app store and a certain percentage of sales for authors is lost. Second, worse, these gorillas force publishers to lower prices, which in turn means authors will take a bath on future sales. (We authors are mostly small fish; best-selling authors are a rarefied minority.)
If I were to prognosticate, I think the path of least resistance is that in August Amazon Kindle, B&N Nook, and Sony Reader will debut HTML5 apps... and Apple looses. One size does not fit all.
Great analysis!
Here's what my income would be like for various versions and means of sale:
* Sold on Amazon's webpage or a Kindle for Kindles and Kindle apps on any device, I get $7.00
--Apple does nothing and gets nothing.
* Sold on the iBookstore for iBooks on iPads and iPhones, I get $7.00
--Apple handles all the distribution, billing and display while getting $3.00, just like Amazon above.
*Sold on an iPad for the Kindle app on that iPad or any other device, I get $4.00
--Apple does nothing but process the billing and yet gets $6.00
Note just how crazy that scheme is. Apple iBookstore scheme is fair. They earn what Amazon is earning. But notice the third case, where Apple earns twice as much when it does almost nothing as when it is running its own online store. That's where Apple is likely to get in deep, deep trouble with the federal government. There's no rationale basis for that difference except as an attempt by Apple to crush its competition.
I appreciate your perspective, but in the last case wouldn't Apple and Amazon both get $ 3.00?
Apple is looking out 100% for the consumer and transforming the world with goodness.
Google is evil and secretly selling your credit card information and a list of ugly girls you slept with in college to even more evil people.
Amazon represents our horribly misguided history as a flawed species.
I have an idea. How about we use this thread to discuss the relative merits of the three subscription models described, instead of spending a lot of time railing against Apple Insider and its hideous bias and horrible standards of journalism etc etc.
Kind of difficult to discuss "relative merits" where they're presented with "hideous bias and horrible standards of journalism". When the article is written with such an obviously polarizing slant, how do you expect any sort of real discussion.
Maybe you should have written:
"I have an idea. How about we use this thread to discuss the relative merits of the three subscription models as they actually exist, instead of spending a lot of time debating a slanted article. Apple Insider and its hideous bias and horrible standards of journalism should be revised and improved to enable such a discussion."
Article Summary for anyone who doesn't want to read 3 pages:
Apple is looking out 100% for the consumer and transforming the world with goodness.
Google is evil and secretly selling your credit card information and a list of ugly girls you slept with in college to even more evil people.
Amazon represents our horribly misguided history as a flawed species.
Looks like your reading comprehension has failed you.
Kind of difficult to discuss "relative merits" where they're presented with "hideous bias and horrible standards of journalism". When the article is written with such an obviously polarizing slant, how do you expect any sort of real discussion.
Maybe you should have written:
"I have an idea. How about we use this thread to discuss the relative merits of the three subscription models as they actually exist, instead of spending a lot of time debating a slanted article. Apple Insider and its hideous bias and horrible standards of journalism should be revised and improved to enable such a discussion."
Actually, it is really easy. Using your reading comprehension skills start where you see a clear bias or slant and provide us with the truth as you know it.
This is maybe a battle, but it is certainly not a duel.
Apple has chosen to put the user first.
Google has chosen to put publishing dinosaurs first, with ads thrown in and your privacy as a commodity.
The choice is clear.
How has apple chosen to put the user first? Their policy doesn't seem user friendly at all:
The 30% cut and the fact that they cannot charge a higher price on iOS purchases will basically mean that
1) publishers raise the price of their subscriptions everywhere (unlikely) or
2) publishers will abandon iOS devices altogether
Neither of which benefits the end user.
I have an idea. How about we use this thread to discuss the relative merits of the three subscription models described, instead of spending a lot of time railing against Apple Insider and its hideous bias and horrible standards of journalism etc etc.
Nice idea, but we'd be to much better start if the discussion is introduced by at least somewhat balanced article, not just another rant about companies that dare to compete against divine Apple.
The whiners aren't complaining about the exposure the App store gives developers, their complaining that Apple wants 30% of your subscription rate while offering little else except credit card processing.
Here's my example for Dropbox:
Let's take an example, Dropbox has their $10 a month plan for 50GB. They probably get pretty good rates from Amazon for S3 storage, let's make it $.10 a GB. So a user is costing Dropbox $5 a month if they use all their storage. Now Dropbox also has a bunch of free loaders, using 2GB up to 8GB. I don't know the ratio of paying customers to freebies, let's say it's 7 to 1. So the paying subscriber has to cover the freebies, around another ~$2.00. That means dropbox gets $3.00 for each paying user. Now if a user subscribes through the Dropbox app, Dropbox will make no profit from that user... Forever.
If Apple doesn't change, say goodbye to Netflix, Kindle, Hulu+, RedBox, Evernote, etc. on iOS.
Controlling how a publisher does their business outside of the Apple ecosystem is not fine. This kind of shit will not go down well with the European regulators.
I think what you are missing is that an iPad or an iPhone is a general-purpose device, a computer, that you buy and own.
Apple wants to take a 30% cut on any purchases you make with your device, even if you make those purchases through a third-party application.
If Microsoft or Dell did this, then Apple would need to cough up 30% of everything they sold through the version of iTunes running on Windows, which is an OS, just like iOS. iTunes is a third party app running on Windows. Windows is not curated, so Microsoft does not get a dime.
Put another way, Apple by this move is declaring iOS is not to be a curated OS. Rather, they are saying that each iOS device is a Point of Sale that belongs to Apple.
Would be fun if Microsoft suddenly required a 30% cut on any iTunes purchase made "thanks to its Windows system". I can envision DED explaining just how this "has already happened once" and "is fundamentally different from Apple's methods". Oh, the LOLZ. DED made my day again
How has apple chosen to put the user first? Their policy doesn't seem user friendly at all:
The 30% cut and the fact that they cannot charge a higher price on iOS purchases will basically mean that
1) publishers raise the price of their subscriptions everywhere (unlikely) or
2) publishers will abandon iOS devices altogether
Neither of which benefits the end user.
IMHO, what's likely is the global price increase, not publishers abandonning a huge market...
Non iOS users will pay more so that iOS users get the content. How does it feel to make others poorer?