The reason we're talking about this now is that people like Menno and Jetz are here spinning bullshit as fact, with their only intention to stir up shit based on numbers they make up and wild theories about how Amazon will make $0 because of IAP. That's what they do, and a look at their posting history will confirm that.
You're right, no one can know for certain exactly how this will all shake out, but I can guarantee that it doesn't mean that all of the Kindle books read on iOS devices add $0 in revenue to Amazon's coffers. Will they make as much as they might have if Apple allowed them to cheat on the developer agreement. Maybe not, but it it won't be $0 as claimed. Will there be impulse IAP buying if Amazon offers that? (They might not, their other alternative is to simply not direct you out to their website, and you buy your books by going there yourself or on your other devices where you read Kindle books.) Maybe, but, still, not every book read on iOS devices will be the result of an impulse IAP, that much is certain.
So, yes, people like Menno and Jetz have achieved their goal in that regard: causing irrational panic on tech blogs. And that's exactly what it is panic, where everything degenerates into the lynch mob mentality they seek to provoke. So, your choices are to either panic along with everyone else or point out the bullshit -- in this instance, that Amazon will make $0 in revenue from all books read on iOS devices -- for what it is.
I trust that if any major service like Netflix or Hulu or Amazon announce that they are dropping support for iOS you'll apologize for slandering us with crap like this?
Seriously wonder where the mods are on a post like this.
For the record, I am an Apple user (iMac, ipods, etc.). It's just that I am not drunk off the koolaid like you are.
What nonsense the "freeloader" crap is. Apple have the costs of distributing Amazon's original app as it forces those costs on Amazon, because the iPad is curated.
Since free apps dont need DRM Amazon could, were it allowed, just have a "DownLoad App" link on their website when you visit in Safari. That link doesnt have to direct to the app store, the download could work via Amazon's servers, as could everything else. It would mean a change to the iPad security, but so what?
That would be like Mac OS X. People who want to use their own distribution model can use it, and Apple can help smaller devs. Amazon, dont need Apple anywhere in the loop.
]What nonsense the "freeloader" crap is"
I have the Amazon and Kindle apps. They were free down loads. That isn't "nonsense" it's fact. I also downloaded NavFreeUSA. It is a 1.79GB free app that took 5 hours to download. Apple pays for that 1.79GB app sitting on their servers and the 5 hours it takes to down load it. Apple pays for it all. No cost to the dev.
Free loaders--"nonsense"?
What do you mean by "nonsense"?
It costs Apple for free downloads. It isn't "nonsense", it's fact.
I trust that if any major service like Netflix or Hulu or Amazon announce that they are dropping support for iOS you'll apologize for slandering us with crap like this?
Seriously wonder where the mods are on a post like this.
For the record, I am an Apple user (iMac, ipods, etc.). It's just that I am not drunk off the koolaid like you are.
I have all of the Apps you mention. If they can't make a deal that is acceptable to Apple the Apps will be removed from the store.
Apple has no say whether I can use those services on my iPodTouch. I just can't use an App to do it. Apple has no way to control my use of my iPodTouch.
I have all of them on my MacBook. Apple can't control me from using my MacBook and sending any of the content to my Touch. I control that. Viewing Hulu on my Touch isn't a particularly elegant experience on my Touch, but it might be on an iPad. If I had an iPad I could see Hulu better.
Apple doesn't control me or my MacBook or my iPodTouch. They do control their AppStore. They can't stop me from subscribing to anything from my iPodTouch and have to pay Apple or abide by rules in the AppStore.
I have a browser on my Touch. I can do anything from there and bypass Apple
I don't have to have a Kindle App on my Touch to read my Kindle books. It won't be the same beautiful experience that it is now. I can still do it with NO interference from Apple.
You are missing the point. What incentive does Amazon have to continue to service iOS customers if they actually lose money (or the margins are low enough not to be worthwhile) on the iOS ecosystem per sale?
The problem is that you've set it up from the very beginning that Amazon is going to loose money under this policy. The problem with this line of reasoning is that reality would have to line up in a very specific way that disregards a lot of other factors. Its very unlikely that reality will aline in such a way.
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It's not that people aren't buying Kindle books on iOS. It's just that the rest of the Kindle ecosystem is much bigger than the portion on iOS. That's why the majority of their sales comes from elsewhere.
I agree. Because there are a lot of sales elsewhere why would iOS pose such a risk to its profitability?
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But even all that is irrelevant. We can still assess the impact of a policy change based on logic. We know that Amazon pays out 70% of its revenue to publishers and we know that Apple wants 30% of gross revenue from all sales through iApps. That adds up to 0% gross revenue for Amazon. Even assuming that Amazon has no costs, I fail to see what business sense there is, in serving customers who make you no money at all.
Lets go with your numbers and say this is true. How would you know that enough Kindle users would purchase directly through iOS to have such a severe impact on their profitability?
This logic disregards the fact that 90% of people with an iOS device have a computer. This logic disregards the fact that some number of people with an iPad will have a Blackberry or Android phone and can use those access Amazon. Some number of people who have an iPhone will have an Android or Blackberry tablet which they can use to access Amazon.
There are just too many variables and factors to easily come to the conclusion you wish to come to.
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And let's say that for some crazy reason Amazon saw fit to keep serving iOS customers at zero profit, they'll still get screwed over because their pricing model is now constrained by Apple's universal pricing requirement.
Again you've already established the conclusion that Amazon will make no profit. You have no way to know or prove that.
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However, with Apple working hard to destroy the business case for participating in the iOS ecosystem, it could be very hard for companies with an established business and pricing model (like Amazon) to continue serving iOS users.
If Apple destroys its own ecosystem, why do you care so much?
I maybe misinterpreting things but I take it that Amazon pays out 70% to their content providers. If you know different, please do share.
Right there in your link
"publishers will be able to earn 70 percent of the retail price, net of delivery costs"
When delivery costs are non-zero the publisher does not get 70% of gross.
In the case of iOS devices the delivery cost is 30%...so out of $10 Apple gets $3, Amazon gets $2.10 and the publisher gets $4.90.
Note that these terms are for newspaper and magazine subs and only went into effect at the end of last year. Prior to then Amazon's cut was much higher and around 70%. With really harsh terms.
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Next, Apple is demanding 30% of gross revenue of any business Amazon attains through their iOS app. Nowhere have I said that Apple is getting 30% of Amazon's total ebook revenue. I have said that Apple is getting 30% of Amazon's iApp sales. Combine that with the 70% they are paying their content providers and they are making zero on the iOS ecosystem.
Unless they treat the 30% as delivery costs or the sale is treated as a foreign sale and the publisher gets 35%, as in current foreign sales (i.e. not US or UK and I think Canada), or 40% because that's actually what's left for sales from iOS. In which case the split is $3 Apple, $3 Amazon, $4 Publisher.
Is a publisher going to be particularly happy with this outcome? No, but is it a big deal? It depends. If most of the sales are native to the Kindle ecosystem then the impact is minimal to the publisher's bottom line. Some folks claim iOS is only 20%. I think Amazon said something to this effect.
Is it better for Amazon to pull the app? Not for Amazon. Amazon is getting a free ride into 160M iOS users to expand the Kindle ecosystem. $99 a year and an app is a free ride. You know it. I know it. Amazon knows it. 160 million and growing potential customers is huge.
If Amazon pulls the app, sure as hell B&N will be jumping up and down in joy and paying that 30% gleefully to take huge share from the Kindle ecosystem. I bet they would go $3 Apple, $1.50 B&N and $5.50 publisher. Or even give the publisher $6 for iOS sales. Because at that point only the Nook ecosystem is buy once and read everywhere. Apple's isn't and they don't care.
If Amazon pulls the app will publishers really take a hit? No. First that will drive more iBook sales and their cut remains 70% there. Second, B&N takes share from Amazon and B&N is more likely to share the burden than Amazon. Third, B&N becomes a more relevant competitor to Amazon. Amazon is not just a reseller but a competitor to the big publishing houses and trying to take their place.
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You can choose to be intentionally obtuse if you wish, but I think most people following this thread will understand what I am getting at: with this change of rules, Amazon cannot make money from iOS users.
Sure they can. It's clearly detailed above. In the best case they get the same amount as they do now. In the worst case they get 21% instead.
Do the publishers get screwed? Perhaps, but if Apple can continue to take dominance from Amazon they end up with a better bargaining position when negotiating. Even better if B&N turns this into a solid three horse race. The publishers really can't allow Amazon to dominate because Amazon has shown it is ruthless to them when it holds the cards. Optimally, total sales rise and Amazon sales rise slower.
B&N is even more key than Apple given it's also a brick and mortar business that publishers really want to remain viable. They don't want Amazon competing B&N into bankruptcy like Borders.
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That's not to say this is a good or bad thing. Business is business. Apple built their ecosystem. It's their choice to screw over developers if they wish to. I am merely pointing out that these rules will most certainly make iOS an untenable business proposition for some developers and service providers (like Amazon or Rhapsody or Netflix).
Netflix has been quiet about this. Given they are on the aTV they can probably negotiate a sweetheart deal...especially since iOS subs is probably an insignificant amount anyway.
As for the rest, there's a bit of a shake out. On one hand 30% is a big hit. On the other it buys you access to a 160M potential users. If you can't get a viable business plan out of that...eh.
I maybe misinterpreting things but I take it that Amazon pays out 70% to their content providers. If you know different, please do share.
You're misinterpreting things because you want to. Because your only purpose in being here is to mislead people into believing that lies are truth. And I don't care what you say you own, there's no way I would believe you anyway, and, as someone pointed out, only the trolls try to inoculate themselves by claiming to own Apple products. Frankly I don't care what you claim to own, you're here for one purpose and one purpose only, and that's to attack Apple on any topic you can, and you can't even be honest about that.
No, not everyone gets 70%, and I see you've already been corrected regarding distribution costs. Read it and weep, then put your tail between your legs and slink off with all your other lying comrades in bullshit.
You can choose to be intentionally obtuse if you wish, but I think most people following this thread will understand what I am getting at: with this change of rules, Amazon cannot make money from iOS users.
Nonsense.
Every publisher in the history of world has paid out royalties on the basis of NET RECEIPTS. Not on the basis of the retail price.
No publishing agreement I have ever seen does this.
Yes, in the case of Amazon, selling on the Kindle reader , its receipts and the retail price were the same. But if Amazon wan't to exploit other platforms, it will have to make a two word change to its publishing agreement.
I have a browser on my Touch. I can do anything from there and bypass Apple..... I don't have to have a Kindle App on my Touch to read my Kindle books. It won't be the same beautiful experience that it is now. I can still do it with NO interference from Apple.
Harvey
You could. But would you. Do you people seriously think Apple is stupid? Why would they insist on all these changes if it didn't direct business their way? So forcing devs to offer one click purchases in-app will have no impact because the odd-person like yourself MIGHT go and use a computer to subscribe on-line.
I think it's the height of intellectual dishonesty to suggest that people will suddenly not use the easiest option to purchase content and that companies should stay on iOS based on the scant hope that their customers might, could, maybe, possibly won't use the easiest transaction system possible.
The problem is that you've set it up from the very beginning that Amazon is going to loose money under this policy. The problem with this line of reasoning is that reality would have to line up in a very specific way that disregards a lot of other factors. Its very unlikely that reality will aline in such a way.
Why not though? I am only talking about a few specific cases here. If you're margin exceeds 40%, then you're still making money. I think for magazines (Time, Economist, etc.) that are going direct to the ecosystem, instead of using a third party, this is a hit, but not an unprofitable position. For services like Amazon, or Netflix, or Hulu, unless Apple is cutting them a deal, I fail to see how this is not a body blow (as far as serving iOS users....not talking about their whole business).
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Originally Posted by TenoBell
I agree. Because there are a lot of sales elsewhere why would iOS pose such a risk to its profitability?
People seem to be getting me mixed up. I'm not saying any of these companies have their entire profitability threatened (unless they are wholely dependent on iOS users). I am saying that the business case to service iOS users is threatened. If that's the case, why would they serve iOS users? This is what I am asking.
It's easy to be dismissive and say, "No. It's simply not true. They'll still make money. " But the rules as laid out and by the admission of these own companies (Rhapsody for example), it's clear that some of these companies find Apple's demands too taxing on their business model.
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Originally Posted by TenoBell
Lets go with your numbers and say this is true. How would you know that enough Kindle users would purchase directly through iOS to have such a severe impact on their profitability?
See above. This is not about Kindle in its entirety. This about iOS users, using the Kindle app. If they are costing Amazon money, while simultaneously constraining Amazon's pricing model (because of Apple's rules) why would Amazon serve these customers. No sane business would keep loss-making divisions going just because.
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Originally Posted by TenoBell
This logic disregards the fact that 90% of people with an iOS device have a computer. This logic disregards the fact that some number of people with an iPad will have a Blackberry or Android phone and can use those access Amazon.
Come on now. You know as well as I do that if you have an iPad that's what you'll be using for reading. Heck, that's how Apple advertises the device. It portrays one of the main functions of the iPad as an ereader. Sure, people have a computer and/or smartphones. But if you have an iPad, why the hell would you use something else to read?
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Originally Posted by TenoBell
Some number of people who have an iPhone will have an Android or Blackberry tablet which they can use to access Amazon.
They won't make use of that famous retina display?
And we both know that Android and Blackberry tablets haven't taken off yet. This whole line of reasoning is starting to sound like Apple's defence of late. They like to brag about their market share when it suits them and about how they own the competition. But when people start arguing about their business practices, they suddenly say, "Oh but we have competition and people will use other devices." So what's the truth? I happened to think that if you have an iDevice, you'll use it. And if the surveys are correct, iOS users are far more likely to buy into the iOS ecosystem than support multiple platforms. ie. iPhone user is likely to have iPad and/or an iPod Touch than he/she is to a Galaxy Tab.
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Originally Posted by TenoBell
There are just too many variables and factors to easily come to the conclusion you wish to come to.
What's too many variables? Apple wants 30% of gross revenue. Amazon pays out 70% (though I guess they keep distribution costs). That equals no profits. Surely that's not too many variables to understand.
If you keep expanding the argument to include the entire Kindle ecosystem than yes, it gets complex. But that's not how businesses work and you know it. If you have a division that constantly is a drain on your whole outfit, you shut it down. This is what I'm worried about.
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Originally Posted by TenoBell
Again you've already established the conclusion that Amazon will make no profit. You have no way to know or prove that.
I have provided sound reasoning for it. If my reasoning has gaps, show them. Don't just be dimissive and say, "there's too many variables."
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Originally Posted by TenoBell
If Apple destroys its own ecosystem, why do you care so much?
Because, believe it or not, I do like Apple products (even if I dislike some of their control freak tendencies). And I do believe in a health and competitive tech market that in the end gives us all better choices.
...that and I was seriously considering getting an iPad 2 (and was saving up for it). But with this policy change, I am now worried about what content will be available on the ecosystem.....because I do read Kindle books.
You're misinterpreting things because you want to. Because your only purpose in being here is to mislead people into believing that lies are truth. And I don't care what you say you own, there's no way I would believe you anyway, and, as someone pointed out, only the trolls try to inoculate themselves by claiming to own Apple products. Frankly I don't care what you claim to own, you're here for one purpose and one purpose only, and that's to attack Apple on any topic you can, and you can't even be honest about that.
No, not everyone gets 70%, and I see you've already been corrected regarding distribution costs. Read it and weep, then put your tail between your legs and slink off with all your other lying comrades in bullshit.
And you also see the limitation on pricing for the ebook:
If you select the 70% Royalty Option for your Digital Book, you must set and adjust from time-to-time as necessary the Digital Book?s List Price so that the List Price, plus 15% (the statutory Luxembourg VAT rate) for sales to UK customers, is no higher than any of the following:
the list price (i.e., the suggested or recommended retail price) for any digital edition of the Digital Book in any sales channel;
if you sell a digital edition of the Digital Book directly to end users, the price at which you sell that digital edition to end users;
20% below the list price (i.e., the suggested or recommended retail price) for any physical edition of the Digital Book in any sales channel; or
if you sell a physical edition of the Digital Book directly to end users, 20% below the price at which you sell that physical edition to end users.
So Amazon requires you to not just equal the ebook price you offer to other ebook vendors but also be 20% less than any physical book prices. So if the title has gone to paper back then the ebook must be less than $8.99-$9.99 (average price of paperbacks).
Lets take The DaVinci Code. Mass Market paperback: $9.99. To get 70% royalties for a self publish the Kindle edition can be no more than $7.99. It is currently $8.52. If you look at Tor books the mass market paperbacks are around $8.99 but the Kindle versions are all $12.
Why? Because Tor wants to make sure that Brick and Mortar bookstores don't get shafted by Amazon pricing. They probably will price their backlists to maximize ebook profits because physical stores don't have the shelf space for those.
Like I said before, Apple policies are not as far reaching as Amazons. Amazon even reserves the right to sell your book for $0 for promotions in some cases.
What's too many variables? Apple wants 30% of gross revenue. Amazon pays out 70% (though I guess they keep distribution costs). That equals no profits. Surely that's not too many variables to understand.
Complete bullshit FUD. I clearly showed two pricing scenarios where this is untrue. That you continue to ignore those means you really are nothing more than a troll.
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...that and I was seriously considering getting an iPad 2 (and was saving up for it). But with this policy change, I am now worried about what content will be available on the ecosystem.....because I do read Kindle books.
Trolls always claim this. And you made a bad choice in picking the Kindle ecosystem.
"publishers will be able to earn 70 percent of the retail price, net of delivery costs"
When delivery costs are non-zero the publisher does not get 70% of gross.
That still does not leave room for profit. That 30% that Apple wasn't touching before. That was their profit.
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Originally Posted by nht
In the case of iOS devices the delivery cost is 30%...so out of $10 Apple gets $3, Amazon gets $2.10 and the publisher gets $4.90.
It's a huge assumptions that publishers will accept Apple's iOS fees on Amazon as part of the delivery costs.
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Originally Posted by nht
Note that these terms are for newspaper and magazine subs and only went into effect at the end of last year. Prior to then Amazon's cut was much higher and around 70%. With really harsh terms.
As has been pointed out before. Two wrongs don't make a right. Just because Amazon screwed over content providers doesn't necessarily make Apple's sudden change in business practices any more ethical.
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Originally Posted by nht
Unless they treat the 30% as delivery costs or the sale is treated as a foreign sale and the publisher gets 35%, as in current foreign sales (i.e. not US or UK and I think Canada), or 40% because that's actually what's left for sales from iOS. In which case the split is $3 Apple, $3 Amazon, $4 Publisher.
I will accept this is a possible way out. However, if this is true, than for Amazon the policy is still very uncompetitive. Because now on iOS, Apple will still be able to offer those publishers 30% more than Amazon.
And personally, I do believe that might well be what all this is about. Apple maybe trying to push those hawking subscriber content out of their universe. This way they can make money selling content. It could be their new business model. How else to explain the agressive (non-premium) pricing on the iPad for example (whereas they might have gone for higher profits before) or an effort to further monetize the app store (whereas their services have always been virtual loss leaders (or low margin offerings) to sell hardware)?
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Originally Posted by nht
Is a publisher going to be particularly happy with this outcome? No, but is it a big deal? It depends. If most of the sales are native to the Kindle ecosystem then the impact is minimal to the publisher's bottom line. Some folks claim iOS is only 20%. I think Amazon said something to this effect.
See my point above. If your assumption about publishers eating the Apple fee as a delivery charge is untrue, than Amazon isn't making any money from the iOS ecosystem. And if they aren't, would it matter what percentage of sales came from iOS? Why would any business keep a losing division around and encourage its growth?
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Originally Posted by nht
Is it better for Amazon to pull the app? Not for Amazon. Amazon is getting a free ride into 160M iOS users to expand the Kindle ecosystem. $99 a year and an app is a free ride. You know it. I know it. Amazon knows it. 160 million and growing potential customers is huge.
I am not disputing that Apple should get revenue from companies like Amazon. But I sincerely hope that these rules aren't so restrictive that they'll drive content distributors away. That's my worry.
And really, if Apple was so confident about how attractive its IAP service would be, why not make it optional?
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Originally Posted by nht
If Amazon pulls the app, sure as hell B&N will be jumping up and down in joy and paying that 30% gleefully to take huge share from the Kindle ecosystem. I bet they would go $3 Apple, $1.50 B&N and $5.50 publisher. Or even give the publisher $6 for iOS sales. Because at that point only the Nook ecosystem is buy once and read everywhere. Apple's isn't and they don't care.
I don't use B&N, so I'll ask an honest question: Are B&N prices comparable to Amazon? If so, then the math's the same right? So the same business considerations would be in play.
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Originally Posted by nht
If Amazon pulls the app will publishers really take a hit? No. First that will drive more iBook sales and their cut remains 70% there.
And I suspect this is Apple's endgame. Can't compete with Amazon? Tax them out of the ecosystem.
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Originally Posted by nht
Second, B&N takes share from Amazon and B&N is more likely to share the burden than Amazon. Third, B&N becomes a more relevant competitor to Amazon. Amazon is not just a reseller but a competitor to the big publishing houses and trying to take their place.
Do the publishers get screwed? Perhaps, but if Apple can continue to take dominance from Amazon they end up with a better bargaining position when negotiating. Even better if B&N turns this into a solid three horse race. The publishers really can't allow Amazon to dominate because Amazon has shown it is ruthless to them when it holds the cards. Optimally, total sales rise and Amazon sales rise slower.
B&N is even more key than Apple given it's also a brick and mortar business that publishers really want to remain viable. They don't want Amazon competing B&N into bankruptcy like Borders.
As above.
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Originally Posted by nht
Netflix has been quiet about this. Given they are on the aTV they can probably negotiate a sweetheart deal...especially since iOS subs is probably an insignificant amount anyway.
I suspect Netflix is getting special treatment too. If it's true, we'll see whether that's good or bad in the long run.
If I were Netflix though, I'd be worried. Essentially, with this move, Apple now says that when they decide to enter your business, they'll tax you out of the ecosystem.
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Originally Posted by nht
As for the rest, there's a bit of a shake out. On one hand 30% is a big hit. On the other it buys you access to a 160M potential users. If you can't get a viable business plan out of that...eh.
The trouble as I see it, is for those with existing business and pricing models. Companies like Amazon and Netflix built their business and pricelists before they were on iOS or iOS even existed. So they are far more constrained than say a new guy starting out (who can take Apple's iOS tax into account). Yet, quite often, these existing companies offer services many of us like and use. I would not want to see them drop out of iOS.
I am pretty sure that the "kick you out to a web browser" loses a lot of sales. The in-app purchasing option will increase sales volume.
And of course a threefold increase in the number of iPad users might increase it a bit too.
C.
As I was discussing earlier. Volume does not necessarily equal profits.
I don't know if you've used the Kindle app but the kick out to a browser still leads you to one click buying. It works pretty well, so I doubt they lose that many sales.
Complete bullshit FUD. I clearly showed two pricing scenarios where this is untrue. That you continue to ignore those means you really are nothing more than a troll.
Before you get your blood pressure up. Please see the post below where I accepted your rationale.
And what's trolling about presenting a rational argument and concern? You're free to refute the claim. I come here with an open mind and I am willing to accept arguments put forth by others.
It seems to me that a lot of regular contributors here just scream, "Troll!" when they can't (or don't want to) make the effort to have a reasonable discussion.
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Originally Posted by nht
Trolls always claim this. And you made a bad choice in picking the Kindle ecosystem.
...because I used the Kindle ecosystem since before the iPad even existed? Was I supposed to predict the launch of the iPad and iBooks in advance?
And yes, I really did want an iPad 2. My Nexus One has wifi tethering and I have a truly unlimited data plan (I've done up to 10 GB some months). That means I can get a cheap iPad and use it to my heart's content. I use Pages and Numbers a fair bit and have a Bluetooth keyboard on my iMac (which I figured I could use with the iPad). So I figured I'd rather go iPad than use an Android tablet. Almost bought the current iPad but then I really wanted a front facing camera so I decided to hold out. I had never even thought about there being issues with content. I read with my Kindle on my phone so I figured an iPad would be an upgrade and I'd be able to get Netflix on there (something I can't get on my Android phone right now). Now, until this is sorted out, I'll have to hold off, because I really don't want to plunk down cash only to buy a tablet that won't let me use content services I like. Call me a troll if you like. But I'd say that's a real and genuine concern for a regular consumer. I'm hoping this is sorted out by the time the iPad 2 rolls around....
BIt seems to me that a lot of regular contributors here just scream, "Troll!" when they can't (or don't want to) make the effort to have a reasonable discussion.
Comments
The reason we're talking about this now is that people like Menno and Jetz are here spinning bullshit as fact, with their only intention to stir up shit based on numbers they make up and wild theories about how Amazon will make $0 because of IAP. That's what they do, and a look at their posting history will confirm that.
You're right, no one can know for certain exactly how this will all shake out, but I can guarantee that it doesn't mean that all of the Kindle books read on iOS devices add $0 in revenue to Amazon's coffers. Will they make as much as they might have if Apple allowed them to cheat on the developer agreement. Maybe not, but it it won't be $0 as claimed. Will there be impulse IAP buying if Amazon offers that? (They might not, their other alternative is to simply not direct you out to their website, and you buy your books by going there yourself or on your other devices where you read Kindle books.) Maybe, but, still, not every book read on iOS devices will be the result of an impulse IAP, that much is certain.
So, yes, people like Menno and Jetz have achieved their goal in that regard: causing irrational panic on tech blogs. And that's exactly what it is panic, where everything degenerates into the lynch mob mentality they seek to provoke. So, your choices are to either panic along with everyone else or point out the bullshit -- in this instance, that Amazon will make $0 in revenue from all books read on iOS devices -- for what it is.
I trust that if any major service like Netflix or Hulu or Amazon announce that they are dropping support for iOS you'll apologize for slandering us with crap like this?
Seriously wonder where the mods are on a post like this.
For the record, I am an Apple user (iMac, ipods, etc.). It's just that I am not drunk off the koolaid like you are.
What nonsense the "freeloader" crap is. Apple have the costs of distributing Amazon's original app as it forces those costs on Amazon, because the iPad is curated.
Since free apps dont need DRM Amazon could, were it allowed, just have a "DownLoad App" link on their website when you visit in Safari. That link doesnt have to direct to the app store, the download could work via Amazon's servers, as could everything else. It would mean a change to the iPad security, but so what?
That would be like Mac OS X. People who want to use their own distribution model can use it, and Apple can help smaller devs. Amazon, dont need Apple anywhere in the loop.
]What nonsense the "freeloader" crap is"
I have the Amazon and Kindle apps. They were free down loads. That isn't "nonsense" it's fact. I also downloaded NavFreeUSA. It is a 1.79GB free app that took 5 hours to download. Apple pays for that 1.79GB app sitting on their servers and the 5 hours it takes to down load it. Apple pays for it all. No cost to the dev.
Free loaders--"nonsense"?
What do you mean by "nonsense"?
It costs Apple for free downloads. It isn't "nonsense", it's fact.
Harvey
I trust that if any major service like Netflix or Hulu or Amazon announce that they are dropping support for iOS you'll apologize for slandering us with crap like this?
Seriously wonder where the mods are on a post like this.
For the record, I am an Apple user (iMac, ipods, etc.). It's just that I am not drunk off the koolaid like you are.
I have all of the Apps you mention. If they can't make a deal that is acceptable to Apple the Apps will be removed from the store.
Apple has no say whether I can use those services on my iPodTouch. I just can't use an App to do it. Apple has no way to control my use of my iPodTouch.
I have all of them on my MacBook. Apple can't control me from using my MacBook and sending any of the content to my Touch. I control that. Viewing Hulu on my Touch isn't a particularly elegant experience on my Touch, but it might be on an iPad. If I had an iPad I could see Hulu better.
Apple doesn't control me or my MacBook or my iPodTouch. They do control their AppStore. They can't stop me from subscribing to anything from my iPodTouch and have to pay Apple or abide by rules in the AppStore.
I have a browser on my Touch. I can do anything from there and bypass Apple
I don't have to have a Kindle App on my Touch to read my Kindle books. It won't be the same beautiful experience that it is now. I can still do it with NO interference from Apple.
Harvey
You are missing the point. What incentive does Amazon have to continue to service iOS customers if they actually lose money (or the margins are low enough not to be worthwhile) on the iOS ecosystem per sale?
The problem is that you've set it up from the very beginning that Amazon is going to loose money under this policy. The problem with this line of reasoning is that reality would have to line up in a very specific way that disregards a lot of other factors. Its very unlikely that reality will aline in such a way.
It's not that people aren't buying Kindle books on iOS. It's just that the rest of the Kindle ecosystem is much bigger than the portion on iOS. That's why the majority of their sales comes from elsewhere.
I agree. Because there are a lot of sales elsewhere why would iOS pose such a risk to its profitability?
But even all that is irrelevant. We can still assess the impact of a policy change based on logic. We know that Amazon pays out 70% of its revenue to publishers and we know that Apple wants 30% of gross revenue from all sales through iApps. That adds up to 0% gross revenue for Amazon. Even assuming that Amazon has no costs, I fail to see what business sense there is, in serving customers who make you no money at all.
Lets go with your numbers and say this is true. How would you know that enough Kindle users would purchase directly through iOS to have such a severe impact on their profitability?
This logic disregards the fact that 90% of people with an iOS device have a computer. This logic disregards the fact that some number of people with an iPad will have a Blackberry or Android phone and can use those access Amazon. Some number of people who have an iPhone will have an Android or Blackberry tablet which they can use to access Amazon.
There are just too many variables and factors to easily come to the conclusion you wish to come to.
And let's say that for some crazy reason Amazon saw fit to keep serving iOS customers at zero profit, they'll still get screwed over because their pricing model is now constrained by Apple's universal pricing requirement.
Again you've already established the conclusion that Amazon will make no profit. You have no way to know or prove that.
However, with Apple working hard to destroy the business case for participating in the iOS ecosystem, it could be very hard for companies with an established business and pricing model (like Amazon) to continue serving iOS users.
If Apple destroys its own ecosystem, why do you care so much?
http://www.businesswire.com/news/hom...e-Terms-Kindle
I maybe misinterpreting things but I take it that Amazon pays out 70% to their content providers. If you know different, please do share.
Right there in your link
"publishers will be able to earn 70 percent of the retail price, net of delivery costs"
When delivery costs are non-zero the publisher does not get 70% of gross.
In the case of iOS devices the delivery cost is 30%...so out of $10 Apple gets $3, Amazon gets $2.10 and the publisher gets $4.90.
Note that these terms are for newspaper and magazine subs and only went into effect at the end of last year. Prior to then Amazon's cut was much higher and around 70%. With really harsh terms.
Next, Apple is demanding 30% of gross revenue of any business Amazon attains through their iOS app. Nowhere have I said that Apple is getting 30% of Amazon's total ebook revenue. I have said that Apple is getting 30% of Amazon's iApp sales. Combine that with the 70% they are paying their content providers and they are making zero on the iOS ecosystem.
Unless they treat the 30% as delivery costs or the sale is treated as a foreign sale and the publisher gets 35%, as in current foreign sales (i.e. not US or UK and I think Canada), or 40% because that's actually what's left for sales from iOS. In which case the split is $3 Apple, $3 Amazon, $4 Publisher.
Is a publisher going to be particularly happy with this outcome? No, but is it a big deal? It depends. If most of the sales are native to the Kindle ecosystem then the impact is minimal to the publisher's bottom line. Some folks claim iOS is only 20%. I think Amazon said something to this effect.
Is it better for Amazon to pull the app? Not for Amazon. Amazon is getting a free ride into 160M iOS users to expand the Kindle ecosystem. $99 a year and an app is a free ride. You know it. I know it. Amazon knows it. 160 million and growing potential customers is huge.
If Amazon pulls the app, sure as hell B&N will be jumping up and down in joy and paying that 30% gleefully to take huge share from the Kindle ecosystem. I bet they would go $3 Apple, $1.50 B&N and $5.50 publisher. Or even give the publisher $6 for iOS sales. Because at that point only the Nook ecosystem is buy once and read everywhere. Apple's isn't and they don't care.
If Amazon pulls the app will publishers really take a hit? No. First that will drive more iBook sales and their cut remains 70% there. Second, B&N takes share from Amazon and B&N is more likely to share the burden than Amazon. Third, B&N becomes a more relevant competitor to Amazon. Amazon is not just a reseller but a competitor to the big publishing houses and trying to take their place.
You can choose to be intentionally obtuse if you wish, but I think most people following this thread will understand what I am getting at: with this change of rules, Amazon cannot make money from iOS users.
Sure they can. It's clearly detailed above. In the best case they get the same amount as they do now. In the worst case they get 21% instead.
Do the publishers get screwed? Perhaps, but if Apple can continue to take dominance from Amazon they end up with a better bargaining position when negotiating. Even better if B&N turns this into a solid three horse race. The publishers really can't allow Amazon to dominate because Amazon has shown it is ruthless to them when it holds the cards. Optimally, total sales rise and Amazon sales rise slower.
B&N is even more key than Apple given it's also a brick and mortar business that publishers really want to remain viable. They don't want Amazon competing B&N into bankruptcy like Borders.
That's not to say this is a good or bad thing. Business is business. Apple built their ecosystem. It's their choice to screw over developers if they wish to. I am merely pointing out that these rules will most certainly make iOS an untenable business proposition for some developers and service providers (like Amazon or Rhapsody or Netflix).
Netflix has been quiet about this. Given they are on the aTV they can probably negotiate a sweetheart deal...especially since iOS subs is probably an insignificant amount anyway.
As for the rest, there's a bit of a shake out. On one hand 30% is a big hit. On the other it buys you access to a 160M potential users. If you can't get a viable business plan out of that...eh.
http://www.businesswire.com/news/hom...e-Terms-Kindle
I maybe misinterpreting things but I take it that Amazon pays out 70% to their content providers. If you know different, please do share.
You're misinterpreting things because you want to. Because your only purpose in being here is to mislead people into believing that lies are truth. And I don't care what you say you own, there's no way I would believe you anyway, and, as someone pointed out, only the trolls try to inoculate themselves by claiming to own Apple products. Frankly I don't care what you claim to own, you're here for one purpose and one purpose only, and that's to attack Apple on any topic you can, and you can't even be honest about that.
http://forums.kindledirectpublishing...externalID=377
No, not everyone gets 70%, and I see you've already been corrected regarding distribution costs. Read it and weep, then put your tail between your legs and slink off with all your other lying comrades in bullshit.
You can choose to be intentionally obtuse if you wish, but I think most people following this thread will understand what I am getting at: with this change of rules, Amazon cannot make money from iOS users.
Nonsense.
Every publisher in the history of world has paid out royalties on the basis of NET RECEIPTS. Not on the basis of the retail price.
No publishing agreement I have ever seen does this.
Yes, in the case of Amazon, selling on the Kindle reader , its receipts and the retail price were the same. But if Amazon wan't to exploit other platforms, it will have to make a two word change to its publishing agreement.
C.
I have a browser on my Touch. I can do anything from there and bypass Apple..... I don't have to have a Kindle App on my Touch to read my Kindle books. It won't be the same beautiful experience that it is now. I can still do it with NO interference from Apple.
Harvey
You could. But would you. Do you people seriously think Apple is stupid? Why would they insist on all these changes if it didn't direct business their way? So forcing devs to offer one click purchases in-app will have no impact because the odd-person like yourself MIGHT go and use a computer to subscribe on-line.
I think it's the height of intellectual dishonesty to suggest that people will suddenly not use the easiest option to purchase content and that companies should stay on iOS based on the scant hope that their customers might, could, maybe, possibly won't use the easiest transaction system possible.
I think it's the height of intellectual dishonesty to suggest that people will suddenly not use the easiest option
I am pretty sure that the "kick you out to a web browser" loses a lot of sales. The in-app purchasing option will increase sales volume.
And of course a threefold increase in the number of iPad users might increase it a bit too.
C.
The problem is that you've set it up from the very beginning that Amazon is going to loose money under this policy. The problem with this line of reasoning is that reality would have to line up in a very specific way that disregards a lot of other factors. Its very unlikely that reality will aline in such a way.
Why not though? I am only talking about a few specific cases here. If you're margin exceeds 40%, then you're still making money. I think for magazines (Time, Economist, etc.) that are going direct to the ecosystem, instead of using a third party, this is a hit, but not an unprofitable position. For services like Amazon, or Netflix, or Hulu, unless Apple is cutting them a deal, I fail to see how this is not a body blow (as far as serving iOS users....not talking about their whole business).
I agree. Because there are a lot of sales elsewhere why would iOS pose such a risk to its profitability?
People seem to be getting me mixed up. I'm not saying any of these companies have their entire profitability threatened (unless they are wholely dependent on iOS users). I am saying that the business case to service iOS users is threatened. If that's the case, why would they serve iOS users? This is what I am asking.
It's easy to be dismissive and say, "No. It's simply not true. They'll still make money. " But the rules as laid out and by the admission of these own companies (Rhapsody for example), it's clear that some of these companies find Apple's demands too taxing on their business model.
Lets go with your numbers and say this is true. How would you know that enough Kindle users would purchase directly through iOS to have such a severe impact on their profitability?
See above. This is not about Kindle in its entirety. This about iOS users, using the Kindle app. If they are costing Amazon money, while simultaneously constraining Amazon's pricing model (because of Apple's rules) why would Amazon serve these customers. No sane business would keep loss-making divisions going just because.
This logic disregards the fact that 90% of people with an iOS device have a computer. This logic disregards the fact that some number of people with an iPad will have a Blackberry or Android phone and can use those access Amazon.
Come on now. You know as well as I do that if you have an iPad that's what you'll be using for reading. Heck, that's how Apple advertises the device. It portrays one of the main functions of the iPad as an ereader. Sure, people have a computer and/or smartphones. But if you have an iPad, why the hell would you use something else to read?
Some number of people who have an iPhone will have an Android or Blackberry tablet which they can use to access Amazon.
They won't make use of that famous retina display?
And we both know that Android and Blackberry tablets haven't taken off yet. This whole line of reasoning is starting to sound like Apple's defence of late. They like to brag about their market share when it suits them and about how they own the competition. But when people start arguing about their business practices, they suddenly say, "Oh but we have competition and people will use other devices." So what's the truth? I happened to think that if you have an iDevice, you'll use it. And if the surveys are correct, iOS users are far more likely to buy into the iOS ecosystem than support multiple platforms. ie. iPhone user is likely to have iPad and/or an iPod Touch than he/she is to a Galaxy Tab.
There are just too many variables and factors to easily come to the conclusion you wish to come to.
What's too many variables? Apple wants 30% of gross revenue. Amazon pays out 70% (though I guess they keep distribution costs). That equals no profits. Surely that's not too many variables to understand.
If you keep expanding the argument to include the entire Kindle ecosystem than yes, it gets complex. But that's not how businesses work and you know it. If you have a division that constantly is a drain on your whole outfit, you shut it down. This is what I'm worried about.
Again you've already established the conclusion that Amazon will make no profit. You have no way to know or prove that.
I have provided sound reasoning for it. If my reasoning has gaps, show them. Don't just be dimissive and say, "there's too many variables."
If Apple destroys its own ecosystem, why do you care so much?
Because, believe it or not, I do like Apple products (even if I dislike some of their control freak tendencies). And I do believe in a health and competitive tech market that in the end gives us all better choices.
...that and I was seriously considering getting an iPad 2 (and was saving up for it). But with this policy change, I am now worried about what content will be available on the ecosystem.....because I do read Kindle books.
You're misinterpreting things because you want to. Because your only purpose in being here is to mislead people into believing that lies are truth. And I don't care what you say you own, there's no way I would believe you anyway, and, as someone pointed out, only the trolls try to inoculate themselves by claiming to own Apple products. Frankly I don't care what you claim to own, you're here for one purpose and one purpose only, and that's to attack Apple on any topic you can, and you can't even be honest about that.
http://forums.kindledirectpublishing...externalID=377
No, not everyone gets 70%, and I see you've already been corrected regarding distribution costs. Read it and weep, then put your tail between your legs and slink off with all your other lying comrades in bullshit.
And you also see the limitation on pricing for the ebook:
If you select the 70% Royalty Option for your Digital Book, you must set and adjust from time-to-time as necessary the Digital Book?s List Price so that the List Price, plus 15% (the statutory Luxembourg VAT rate) for sales to UK customers, is no higher than any of the following:
- the list price (i.e., the suggested or recommended retail price) for any digital edition of the Digital Book in any sales channel;
- if you sell a digital edition of the Digital Book directly to end users, the price at which you sell that digital edition to end users;
- 20% below the list price (i.e., the suggested or recommended retail price) for any physical edition of the Digital Book in any sales channel; or
- if you sell a physical edition of the Digital Book directly to end users, 20% below the price at which you sell that physical edition to end users.
So Amazon requires you to not just equal the ebook price you offer to other ebook vendors but also be 20% less than any physical book prices. So if the title has gone to paper back then the ebook must be less than $8.99-$9.99 (average price of paperbacks).Lets take The DaVinci Code. Mass Market paperback: $9.99. To get 70% royalties for a self publish the Kindle edition can be no more than $7.99. It is currently $8.52. If you look at Tor books the mass market paperbacks are around $8.99 but the Kindle versions are all $12.
Why? Because Tor wants to make sure that Brick and Mortar bookstores don't get shafted by Amazon pricing. They probably will price their backlists to maximize ebook profits because physical stores don't have the shelf space for those.
Like I said before, Apple policies are not as far reaching as Amazons. Amazon even reserves the right to sell your book for $0 for promotions in some cases.
What's too many variables? Apple wants 30% of gross revenue. Amazon pays out 70% (though I guess they keep distribution costs). That equals no profits. Surely that's not too many variables to understand.
Complete bullshit FUD. I clearly showed two pricing scenarios where this is untrue. That you continue to ignore those means you really are nothing more than a troll.
...that and I was seriously considering getting an iPad 2 (and was saving up for it). But with this policy change, I am now worried about what content will be available on the ecosystem.....because I do read Kindle books.
Trolls always claim this. And you made a bad choice in picking the Kindle ecosystem.
Right there in your link
"publishers will be able to earn 70 percent of the retail price, net of delivery costs"
When delivery costs are non-zero the publisher does not get 70% of gross.
That still does not leave room for profit. That 30% that Apple wasn't touching before. That was their profit.
In the case of iOS devices the delivery cost is 30%...so out of $10 Apple gets $3, Amazon gets $2.10 and the publisher gets $4.90.
It's a huge assumptions that publishers will accept Apple's iOS fees on Amazon as part of the delivery costs.
Note that these terms are for newspaper and magazine subs and only went into effect at the end of last year. Prior to then Amazon's cut was much higher and around 70%. With really harsh terms.
As has been pointed out before. Two wrongs don't make a right. Just because Amazon screwed over content providers doesn't necessarily make Apple's sudden change in business practices any more ethical.
Unless they treat the 30% as delivery costs or the sale is treated as a foreign sale and the publisher gets 35%, as in current foreign sales (i.e. not US or UK and I think Canada), or 40% because that's actually what's left for sales from iOS. In which case the split is $3 Apple, $3 Amazon, $4 Publisher.
I will accept this is a possible way out. However, if this is true, than for Amazon the policy is still very uncompetitive. Because now on iOS, Apple will still be able to offer those publishers 30% more than Amazon.
And personally, I do believe that might well be what all this is about. Apple maybe trying to push those hawking subscriber content out of their universe. This way they can make money selling content. It could be their new business model. How else to explain the agressive (non-premium) pricing on the iPad for example (whereas they might have gone for higher profits before) or an effort to further monetize the app store (whereas their services have always been virtual loss leaders (or low margin offerings) to sell hardware)?
Is a publisher going to be particularly happy with this outcome? No, but is it a big deal? It depends. If most of the sales are native to the Kindle ecosystem then the impact is minimal to the publisher's bottom line. Some folks claim iOS is only 20%. I think Amazon said something to this effect.
See my point above. If your assumption about publishers eating the Apple fee as a delivery charge is untrue, than Amazon isn't making any money from the iOS ecosystem. And if they aren't, would it matter what percentage of sales came from iOS? Why would any business keep a losing division around and encourage its growth?
Is it better for Amazon to pull the app? Not for Amazon. Amazon is getting a free ride into 160M iOS users to expand the Kindle ecosystem. $99 a year and an app is a free ride. You know it. I know it. Amazon knows it. 160 million and growing potential customers is huge.
I am not disputing that Apple should get revenue from companies like Amazon. But I sincerely hope that these rules aren't so restrictive that they'll drive content distributors away. That's my worry.
And really, if Apple was so confident about how attractive its IAP service would be, why not make it optional?
If Amazon pulls the app, sure as hell B&N will be jumping up and down in joy and paying that 30% gleefully to take huge share from the Kindle ecosystem. I bet they would go $3 Apple, $1.50 B&N and $5.50 publisher. Or even give the publisher $6 for iOS sales. Because at that point only the Nook ecosystem is buy once and read everywhere. Apple's isn't and they don't care.
I don't use B&N, so I'll ask an honest question: Are B&N prices comparable to Amazon? If so, then the math's the same right? So the same business considerations would be in play.
If Amazon pulls the app will publishers really take a hit? No. First that will drive more iBook sales and their cut remains 70% there.
And I suspect this is Apple's endgame. Can't compete with Amazon? Tax them out of the ecosystem.
Second, B&N takes share from Amazon and B&N is more likely to share the burden than Amazon. Third, B&N becomes a more relevant competitor to Amazon. Amazon is not just a reseller but a competitor to the big publishing houses and trying to take their place.
Do the publishers get screwed? Perhaps, but if Apple can continue to take dominance from Amazon they end up with a better bargaining position when negotiating. Even better if B&N turns this into a solid three horse race. The publishers really can't allow Amazon to dominate because Amazon has shown it is ruthless to them when it holds the cards. Optimally, total sales rise and Amazon sales rise slower.
B&N is even more key than Apple given it's also a brick and mortar business that publishers really want to remain viable. They don't want Amazon competing B&N into bankruptcy like Borders.
As above.
Netflix has been quiet about this. Given they are on the aTV they can probably negotiate a sweetheart deal...especially since iOS subs is probably an insignificant amount anyway.
I suspect Netflix is getting special treatment too. If it's true, we'll see whether that's good or bad in the long run.
If I were Netflix though, I'd be worried. Essentially, with this move, Apple now says that when they decide to enter your business, they'll tax you out of the ecosystem.
As for the rest, there's a bit of a shake out. On one hand 30% is a big hit. On the other it buys you access to a 160M potential users. If you can't get a viable business plan out of that...eh.
The trouble as I see it, is for those with existing business and pricing models. Companies like Amazon and Netflix built their business and pricelists before they were on iOS or iOS even existed. So they are far more constrained than say a new guy starting out (who can take Apple's iOS tax into account). Yet, quite often, these existing companies offer services many of us like and use. I would not want to see them drop out of iOS.
I am pretty sure that the "kick you out to a web browser" loses a lot of sales. The in-app purchasing option will increase sales volume.
And of course a threefold increase in the number of iPad users might increase it a bit too.
C.
As I was discussing earlier. Volume does not necessarily equal profits.
I don't know if you've used the Kindle app but the kick out to a browser still leads you to one click buying. It works pretty well, so I doubt they lose that many sales.
As I was discussing earlier. Volume does not necessarily equal profits.
I refer to you to my post on Net Receipts.
C.
I refer to you to my post on Net Receipts.
C.
He's not about to let a few inconvenient facts get in the way of the FUD he's here to spread.
Complete bullshit FUD. I clearly showed two pricing scenarios where this is untrue. That you continue to ignore those means you really are nothing more than a troll.
Before you get your blood pressure up. Please see the post below where I accepted your rationale.
And what's trolling about presenting a rational argument and concern? You're free to refute the claim. I come here with an open mind and I am willing to accept arguments put forth by others.
It seems to me that a lot of regular contributors here just scream, "Troll!" when they can't (or don't want to) make the effort to have a reasonable discussion.
Trolls always claim this. And you made a bad choice in picking the Kindle ecosystem.
...because I used the Kindle ecosystem since before the iPad even existed? Was I supposed to predict the launch of the iPad and iBooks in advance?
And yes, I really did want an iPad 2. My Nexus One has wifi tethering and I have a truly unlimited data plan (I've done up to 10 GB some months). That means I can get a cheap iPad and use it to my heart's content. I use Pages and Numbers a fair bit and have a Bluetooth keyboard on my iMac (which I figured I could use with the iPad). So I figured I'd rather go iPad than use an Android tablet. Almost bought the current iPad but then I really wanted a front facing camera so I decided to hold out. I had never even thought about there being issues with content. I read with my Kindle on my phone so I figured an iPad would be an upgrade and I'd be able to get Netflix on there (something I can't get on my Android phone right now). Now, until this is sorted out, I'll have to hold off, because I really don't want to plunk down cash only to buy a tablet that won't let me use content services I like. Call me a troll if you like. But I'd say that's a real and genuine concern for a regular consumer. I'm hoping this is sorted out by the time the iPad 2 rolls around....
But I'd say that's a real and genuine concern for a regular consumer.
It's not a concern if you understand how publishing works.
C.
BIt seems to me that a lot of regular contributors here just scream, "Troll!" when they can't (or don't want to) make the effort to have a reasonable discussion.
This.