Compared to traditional physical publishing and distribution, yes. Compared to competing net/web-based platforms, no. You ignore that some such as Netflix already have their infrastructure in place and this 30% charge that Apple is proposing is directly comparable, as far as Netflix is concerned, to a credit-card processing fee and it is therefore preposterous....
It's not a fee for service, it's revenue sharing that every developer, large and small, agreed to. What is being argued is that big companies like Amazon ought not have to abide by their contracts because they don't need Apple to sell content, it's as simple as that.
All hail the power of the mod. Amazing how you don't get called a troll for making similar arguments to mine...
In any event, I do see the point of Apple's 30% cut. They were trying to be consistent across the board. I think the part that might make it untenable for some is the insistence that you must offer subscriptions to iOS users and you must do it at a universal price point, while Apple takes its 30% cut. So no chance to just offer straight viewers.
One could argue that by offering viewers, these companies are passing up the benefits of being able to sign up 160 million customers and that they are merely catering to their exisitng customer base who use iOS devices. But Apple doesn't give developers even that choice. It's either all in, with the 30% cut on iOS or all out. That's quite a harsh line.
He doesn't get called a troll because his comments in this thread and historically don't suggest that he is.
What you call harsh, some call fair. Why Amazon and other large companies should be allowed to steal revenue from the App Store just because they can and leave other, smaller, developers to foot their bill is beyond my understanding.
You're missing a very big point here. The 30% is not for processing subscription payments. The 30% is the revenue the developer agreed to share with Apple
Give me a break! Sure, it's in the agreement. You call it a "revenue share", and I'll call it what it amounts to, which is a 30% fee for processing subscription payments.
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Originally Posted by anonymouse
I don't understand why everyone keeps evaluating this in a fee for services context
It's because that's what it amounts to. Apple performs a service: processing payments; Apple charge a fee: 30% of the payment amount. Yes, there are non-tangible benefits here such as Apple "providing" a huge customer base, but in this context Apple providing said customer base costs Apple nothing (that's been paid for already through the purchase price of the hardware).
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Originally Posted by anonymouse
when it's all about the revenue sharing that the developers agreed to do.
Which developers have no choice to agree to if they want to sell apps for iOS devices.
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Originally Posted by anonymouse
As has been pointed out above and in numerous previous threads, allowing these shell apps to be given away for free and sell all their content for free, or even at a reduced rate, is a recipe for every developer hiding every penny of revenue they can from Apple
Clearly people pointing this out on numerous occasions are willfully ignoring the fact that Apple vet all applications before allowing them into the app store and can therefore easily prevent this from happening.
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Originally Posted by anonymouse
And there is absolutely no reason to think that this will be anything but good for the consumer.
Apart from if it means no content on iOS devices because content providers are unwilling to pay Apple's exorbitant fees. Some content providers will be able to move to HTML5 delivery over the web, but this could easily become a second-thought approach with development focus on android-native apps. Some content providers wouldn't be able to use web-delivery due to DRM requirements.
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Originally Posted by anonymouse
First of all, with subscriptions, all data collection is opt-in so this preserves customer's privacy. They are also easier to manage and cancel. And, more generally, this policy improves the iOS user experience and lessens the likelihood that users will become victims of fraud by requiring that IAP be used, and not some random website that may or may not be legitimate or secure.
Yes, these are all good for iOS users and therefore iOS users should be wishing that Apple make it much more appealing for content providers to use this method. Seriously, why is Apple making it so difficult for themselves? The answer is that they are being greedy: they already make massive margins on the hardware, and now they're trying to excessively milk content delivery as well. As I said in a previous post, a lower fee would make for a more attractive platform for content providers which would make for a more attractive platform for potential users which would result in Apple selling more hardware, where they make their real money.
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Originally Posted by anonymouse
"all their profits will go to Apple and they'll leave iOS,"
This could easily result in prices increasing. And it's not about whether people leave iOS, it's about whether they even come to it in the first place. There are not currently that many magazines or newspapers sold by subscription as a native iOS app.
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Originally Posted by anonymouse
Amazon not only isn't going to lose money on iOS users, it isn't going to lose money on IAPs.
They won't "make a loss", but they will "lose money" in as much as if they don't raise prices, they will lose 30% of their revenue to Apple.
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Originally Posted by anonymouse
But, the fear that people have is that they won't be able to read their Kindle content on iOS devices. (As though the reader app would be deleted from their devices, which it won't.)
No it won't but if Amazon remove it it won't be available to future iOS users which makes iOS less attractive to potential customers, which is not in the interests of current users of a still relatively young platform.
Give me a break! Sure, it's in the agreement. You call it a "revenue share", and I'll call it what it amounts to, which is a 30% fee for processing subscription payments.
...
It's because that's what it amounts to. Apple performs a service: processing payments; Apple charge a fee: 30% of the payment amount. Yes, there are non-tangible benefits here such as Apple "providing" a huge customer base, but in this context Apple providing said customer base costs Apple nothing (that's been paid for already through the purchase price of the hardware).
...
Which developers have no choice to agree to if they want to sell apps for iOS devices.
Yeah, and those wishing to sell through Amazon have no choice but to agree to Amazon's terms. There's nothing shocking or unusual about the terms of the app store. In contrast to what came before it, it's quite reasonable and fair. And it is revenue sharing. The fact is unless Apple requires that IAP use Store Kit and that all IAP are subject to the revenue sharing, it becomes trivial for "developers" to hide revenue and cheat on the developer agreement.
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Clearly people pointing this out on numerous occasions are willfully ignoring the fact that Apple vet all applications before allowing them into the app store and can therefore easily prevent this from happening.
Isn't that exactly what they are doing here?
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Apart from if it means no content on iOS devices because content providers are unwilling to pay Apple's exorbitant fees. Some content providers will be able to move to HTML5 delivery over the web, but this could easily become a second-thought approach with development focus on android-native apps. Some content providers wouldn't be able to use web-delivery due to DRM requirements.
There simply is no reason at this point to believe this scenario is true. People are tossing around a lot of numbers to try to show it's what will happen, but the numbers are just being pulled out of hats and any and all contradictory evidence ignored.
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Yes, these are all good for iOS users and therefore iOS users should be wishing that Apple make it much more appealing for content providers to use this method. Seriously, why is Apple making it so difficult for themselves? The answer is that they are being greedy: they already make massive margins on the hardware, and now they're trying to excessively milk content delivery as well. As I said in a previous post, a lower fee would make for a more attractive platform for content providers which would make for a more attractive platform for potential users which would result in Apple selling more hardware, where they make their real money.
Again, this amounts to an argument that big companies ought to be subsidized in the App Store by small developers. Hardly fair to them.
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This could easily result in prices increasing. And it's not about whether people leave iOS, it's about whether they even come to it in the first place. There are not currently that many magazines or newspapers sold by subscription as a native iOS app.
It's not going to make subscriptions any more expensive. Those publishers are already paying that much or more for subscriptions and making most of their money from ads.
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They won't "make a loss", but they will "lose money" in as much as if they don't raise prices, they will lose 30% of their revenue to Apple.
They aren't going to lose 30% of their revenue, or even 30% of their revenue from iOS users. They may make less money, but the reason they were making more money in the first place is because they were cheating on their contracts.
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No it won't but if Amazon remove it it won't be available to future iOS users which makes iOS less attractive to potential customers, which is not in the interests of current users of a still relatively young platform.
Which is exactly why people ought to be focused on the DRM issues here. That the, albeit unlikely, possibility that a single vendor might withdraw from a platform causes wide-spread panic ought to give pause to think about exactly why. The reason is that Amazon has locked customers into proprietary DRM and now they essentially own those customers. The real issue that ought to be under discussion is just how dangerous proprietary DRM is in the eBook market.
Yeah, and those wishing to sell through Amazon have no choice but to agree to Amazon's terms.
Apples and oranges. Amazon aren't trying to get a tablet platform off the ground.
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Originally Posted by anonymouse
it is revenue sharing.
That amounts to a 30% payment processing fee. Why should Apple expect to share 30% of content provider's revenue, when the only thing Apple is doing is processing payments? Just because it's fairer than other distribution methods (this is debatable), doesn't mean it's fair.
Apple make their money selling the hardware and should look to make a small profit on iTunes/appstore. It's a business model that worked fantastically well for Apple in the mp3-player market and I see no reason why it should not work equally well with the arguably more important tablet market (mp3 market was transient and is giving way to the smartphone and tablet markets which will be around for a lot longer).
I'm going to have to assume that you will agree that a 10% fee would be more attractive to content providers than a 30% fee and would almost certainly be over breakeven for Apple.
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Originally Posted by anonymouse
The fact is unless Apple requires that IAP use Store Kit and that all IAP are subject to the revenue sharing, it becomes trivial for "developers" to hide revenue and cheat on the developer agreement.
And it would be trivial for Apple to spot this. They could require such apps to charge $.99 up front to cover the initial app distribution cost, even without this a 10% fee as I propose would still earn Apple money in the vast majority of cases.
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Originally Posted by anonymouse
Again, this amounts to an argument that big companies ought to be subsidized in the App Store by small developers.
No it doesn't. The proposed 10% subscription fee would cover the initial app distribution fee, or as I said earlier Apple could require a $.99 initial app price. No subsidising here.
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Originally Posted by anonymouse
It's not going to make subscriptions any more expensive.
It will if content providers wish to maintain their revenues.
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Originally Posted by anonymouse
The real issue that ought to be under discussion is just how dangerous proprietary DRM is in the eBook market.
So you are anti the iBooks as well?
DRM has to be proprietary in order to function. Presumably you mean DRM being proprietary to a major content provider is a bad thing?
Apples and oranges. Amazon aren't trying to get a tablet platform off the ground.
Well, that's debatable.
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That amounts to a 30% payment processing fee. Why should Apple expect to share 30% of content provider's revenue, when the only thing Apple is doing is processing payments? Just because it's fairer than other distribution methods (this is debatable), doesn't mean it's fair.
Because it is not a payment processing fee.
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Apple make their money selling the hardware and should look to make a small profit on iTunes/appstore. ...
And they do, and will continue to only make a small profit.
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I'm going to have to assume that you will agree that a 10% fee would be more attractive to content providers than a 30% fee and would almost certainly be over breakeven for Apple.
Certainly 10% would be more attractive to them, but how much over break even is entirely debatable. I certainly don't believe this means as much money out of Amazon's pockets as is being claimed, especially since all these claims are based on the assumption that all eBooks purchased by iOS users will be purchased via IAP, which they won't.
But, right now they are paying 0%, which is even more attractive to them.
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And it would be trivial for Apple to spot this. They could require such apps to charge $.99 up front to cover the initial app distribution cost, even without this a 10% fee as I propose would still earn Apple money in the vast majority of cases.
No it doesn't. The proposed 10% subscription fee would cover the initial app distribution fee, or as I said earlier Apple could require a $.99 initial app price. No subsidising here.
Yet, in your scenario, Amazon, which according to claims is making piles of money off their iOS apps, which it's claimed they will now loose entirely, pays much less than a developer selling a $4.99 app, less still than a $14.99 app. Yet, who is generating more revenue? Still seems like subsidization to me.
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So you are anti the iBooks as well?
DRM has to be proprietary in order to function. Presumably you mean DRM being proprietary to a major content provider is a bad thing?
Yes, I don't and won't buy eBooks (I read plenty of free, public domain books.) until there is an open standard for DRM (and that doesn't mean it has to be free or open source, just like H.264 is an open standard, but not free or open source.). There is absolutely no reason it has to be proprietary, and what people ought to be upset about is that vendors are allowed to lock their content up with DRM, essentially making them prisoners of a single eBook vendor, and that goes for iBooks as well.
In terms of subscriptions, that's what it amounts to because the only thing Apple does is process a payment.
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Originally Posted by anonymouse
Certainly 10% would be more attractive to them
So why not just make it 10% and be done with it? End this arguing, make content producers happy, increase the attractiveness of the iOS platform and gain through increased sales of high-margin hardware.
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Originally Posted by anonymouse
but how much over break even is entirely debatable.
Well, there are plenty of online payment platforms out there (protx, paypal etc.) who are making money charging much less than 10% to process payments, so 10% would definitely cover Apple's costs.
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Originally Posted by anonymouse
until there is an open standard for DRM (and that doesn't mean it has to be free or open source, just like H.264 is an open standard, but not free or open source.).
Actually, there are open-source implementations of the H.264 standard (both encoders and decoders)
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Originally Posted by anonymouse
There is absolutely no reason it has to be proprietary
Yes there is. DRM is about restricting what you can do with content, and it works by encrypting the content, then giving the user the encrypted content, a "player" with an obfuscated decryption algorithm, and the decryption key. The player will only decrypt your content according to the terms of the DRM. If the decryption algorithm were not obfuscated, you could decrypt the content with your own program (using the key they have to give you otherwise the official player couldn't work), and then use the content however you want.
Having an "open" DRM system would by definition mean a non-obfuscated decryption algorithm, but it's the obfuscation of the algorithm that is required in order for DRM to function.
Whilst DRM has to be proprietary, the proprietor(s) needn't be content producers/sellers, which mitigates the risks.
Of course, no DRM is nicer as DRM tends to piss off legitimate users without stopping thieves thieving stuff.
Give me a break! Sure, it's in the agreement. You call it a "revenue share", and I'll call it what it amounts to, which is a 30% fee for processing subscription payments.
And access to 160M potential customers.
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It's because that's what it amounts to. Apple performs a service: processing payments; Apple charge a fee: 30% of the payment amount. Yes, there are non-tangible benefits here such as Apple "providing" a huge customer base, but in this context Apple providing said customer base costs Apple nothing (that's been paid for already through the purchase price of the hardware).
This "non tangible" benefit is the majority of the value of the ecosystem. It costs Apple a significant amount of money and effort to develop a successful product line like the iPad. The purchase price of the hardware is just one of many ways to profit from that highly successful invention.
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Which developers have no choice to agree to if they want to sell apps for iOS devices.
With it's huge user base, easy development environment and top notch ecosystem. They are free to exclusively develop for Android if this agreement is overly burdensome.
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Clearly people pointing this out on numerous occasions are willfully ignoring the fact that Apple vet all applications before allowing them into the app store and can therefore easily prevent this from happening.
Which they are now doing so. So the problem is what? App approvals were too slow! So they opened the gates a bit until better policies and more staff can be trained to enforce those polices.
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Apart from if it means no content on iOS devices because content providers are unwilling to pay Apple's exorbitant fees.
Actual content providers probably are used to less than 70% of gross.
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Some content providers will be able to move to HTML5 delivery over the web, but this could easily become a second-thought approach with development focus on android-native apps. Some content providers wouldn't be able to use web-delivery due to DRM requirements.
Streaming netflix works okay most of the time. But I still have movies natively loaded because it certainly doesn't work enough of the time. For ebooks it would be stupid to rely only on HTML5 access because of all the use cases where you might want to read a book is not where wifi is and sometimes not even 3g or edge.
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No it won't but if Amazon remove it it won't be available to future iOS users which makes iOS less attractive to potential customers, which is not in the interests of current users of a still relatively young platform.
No, it makes KINDLE less attractive and disastrously so. Because sure as hell B&N will stay if Amazon is dumb enough to pull the app because then only the Nook ebook ecosystem will be buy once and read everywhere.
With 160M and growing users not having iOS access is a gaping hole in that buy once and read everywhere concept.
In terms of subscriptions, that's what it amounts to because the only thing Apple does is process a payment.
So why not just make it 10% and be done with it? End this arguing, make content producers happy, increase the attractiveness of the iOS platform and gain through increased sales of high-margin hardware.
Using that logic, then when a game developer sells you new game levels through IAP, all Apple is doing is processing a payment, so why should they have to pay 30%?
The reason is that if they didn't, game developers would give away games and sell the levels for a lower, perhaps 0%, share to Apple, effectively gaming the system to hide revenue. This is absolutely no different.
On the other hand, if Apple made it 10%, there would be just as much uproar, and Apple ends up in a much weaker bargaining position with those who are currently paying 0%.
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Yes there is. DRM is about restricting what you can do with content, and it works by encrypting the content, then giving the user the encrypted content, a "player" with an obfuscated decryption algorithm, and the decryption key. The player will only decrypt your content according to the terms of the DRM. If the decryption algorithm were not obfuscated, you could decrypt the content with your own program (using the key they have to give you otherwise the official player couldn't work), and then use the content however you want.
Having an "open" DRM system would by definition mean a non-obfuscated decryption algorithm, but it's the obfuscation of the algorithm that is required in order for DRM to function.
Whilst DRM has to be proprietary, the proprietor(s) needn't be content producers/sellers, which mitigates the risks.
Of course, no DRM is nicer as DRM tends to piss off legitimate users without stopping thieves thieving stuff.
Yes, it can't be completely open, but it can be non-proprietary and not locked to a single vendor, just like SSL certificates are held "in trust" by certificate authorities, so could DRM keys. Perhaps 'open standard' and 'non-proprietary' are not the best choice of words, but the point is that buyers of digital content ought not have their ability to legitimately use that content controlled by a single company, and that the method for accessing that content ought to be a single one that is open to all reader software, just like authenticating SSL certificates is open to all browsers.
just like SSL certificates are held "in trust" by certificate authorities, so could DRM keys.
The problem is not one of distributing keys, it's one of the algorithm used to decrypt content using the key. You have to give the user the key, otherwise even the "restricted" player can't decode the content. But if the decryption algorithm is not obfuscated (as it wouldn't be, by definition, if it were an open standard) you could use the key and the known decryption algorithm to decrypt the content and circumvent the DRM.
You could of course have an open standard whose specification document is very expensive for the average consumer, say $100,000, and has strict NDAs attached. But the risk of the spec. being leaked is high, and as soon as it is leaked, it would have to be fundamentally changed at massive cost to all those who are legitimately implementing the standard.
Apples and oranges. Amazon aren't trying to get a tablet platform off the ground.
Tablet platform is off the ground. In a decisive way.
If anything the Kindle ecosystem is less off the ground and needs iOS far more than iOS needs Kindle.
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That amounts to a 30% payment processing fee. Why should Apple expect to share 30% of content provider's revenue, when the only thing Apple is doing is processing payments? Just because it's fairer than other distribution methods (this is debatable), doesn't mean it's fair.
Again, that 30% of revenue sharing is for the strategic advantage of access to 160M+ iOS users.
This is exactly what you pay middlemen for. A high concentration of potential customers. Otherwise everyone would be selling direct and not taking 70% of the revenue stream but 100% of the revenue stream.
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Apple make their money selling the hardware and should look to make a small profit on iTunes/appstore.
And that is all they are doing according to the conference call. The 30% revenue sharing should have very limited impact to the bottom line. It DOES, however, make sure that those folks with competing hardware ecosystems (Kindle, Nook, etc) pays a fair market price for access to the iOS market.
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I'm going to have to assume that you will agree that a 10% fee would be more attractive to content providers than a 30% fee and would almost certainly be over breakeven for Apple.
These aren't content producers but content resellers. And no, it wouldn't be "over breakeven" for Apple from a strategic point of view.
Apple does not want to be a commodity hardware provider that hosts other ecosystems. They want to insure that the NATIVE ecosystem remain the competitive advantage that they have labored long and hard to develop.
Folks that want a commodity hardware/software platform should look to Android. You get what you pay for.
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No it doesn't. The proposed 10% subscription fee would cover the initial app distribution fee, or as I said earlier Apple could require a $.99 initial app price. No subsidising here.
Tremendous subsidizing here. This is like Amtrak saying "Hey, Southwest, carry these passengers for me and I'll pay the gas, that's like no subsidies, mkay?" It completely ignores the cost of developing and running a successful airline. Carry those passengers on your own trains buddy.
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So you are anti the iBooks as well?
DRM has to be proprietary in order to function. Presumably you mean DRM being proprietary to a major content provider is a bad thing?
No, DRM does not have to be proprietary to function. There are (mostly unused) open source DRM solution. And no, DRM algorithms do not have be hidden to work. They need to be secure from tampering and the keys also need to be secure. Typically this requires a trusted platform (cell phone, etc) that restrict access to the keys except from signed and approved apps.
AND, there are also other industry standard DRM solutions that allow for interoperability. For ebooks the I would have gone ePub with Adobe DRM as a potential defacto standard...it's missing Kindle and iBooks so it's really nascent but interoperability between the latest Nooks and Sony ebook readers is nice (the older Sonys don't do epub/adobe).
And yes, iBooks isn't compliant since they use ePub w/Fairplay. I probably wouldn't buy from the iBookStore except for non-DRM titles. This is one area where Apple might decide to switch from Airplay for strategic reasons. By adopting the Adobe DRM spec then iBooks can sideload from other 3rd party book stores...then all books are iBooks...
Come on, you know this isn't true. The uproar is about the level Apple want to charge, not that the charge exists.
I disagree. The uproar is, wrongly, about the fact that Apple is asking for what is perceived as a hefty "payment processing" fee, when in fact all they are doing is enforcing revenue sharing provisions of the developer agreement.
... And yes, iBooks isn't compliant since they use ePub w/Fairplay. I probably wouldn't buy from the iBookStore except for non-DRM titles. This is one area where Apple might decide to switch from Airplay for strategic reasons. By adopting the Adobe DRM spec then iBooks can sideload from other 3rd party book stores...then all books are iBooks...
Except of course for Kindle books.
But, yes, these single company DRMs are the biggest problem with eBook publishing and the only way to end this is to vote with our dollars, which means not buying DRMed eBooks until this changes. I'd not be keen on Adobe DRM, either, since, again, the whole thing is controlled by a single entity, but it might be better than the current situation.
In other words, if the eBook DRM situation weren't already fubar for consumers, no one would even care about this issue.
But, yes, these single company DRMs are the biggest problem with eBook publishing and the only way to end this is to vote with our dollars, which means not buying DRMed eBooks until this changes. I'd not be keen on Adobe DRM, either, since, again, the whole thing is controlled by a single entity, but it might be better than the current situation.
In other words, if the eBook DRM situation weren't already fubar for consumers, no one would even care about this issue.
90% of my paid ebooks are from Baen books and aren't DRM'd. The free ebooks from Baen and other folks still dominate the collection since I've started borrowing ebooks from the library.
They typically use ePub + Adobe or Overdrive.
I would buy a Nook...and am still tempted to get a Nook Color. Kindle, not so much.
You have two arguments here, one: Apple are charging too much. Two: the developers are taking the piss and bee taking Apple for a free ride.
At the end of the day, if you are making money on apps in the iTunes store you got to pay Apple. If you don't like that then stop publishing in iTunes. If enough devs move to Android then maybe Apple will revise its pricing.
Just some information, not taking sides. I am an intense Kindle iOS user. I sometimes read or at least partially read 2 books a day. I DO NOT purchase the books through the iOS device. I purchase on the Amazone Website and down load to the device (s)... that is .. all my Kindle capable devices. I also purchase hard copy part of the time. Why... so I can read anywhere with whatever device I happen to have at hand which often works out to be an iPhone. But it could also be my laptop... an electronic pad.... and I have the hard copy because there are places where you are not allowed to have an electronic device turned on... Airplane take off and landings, hospital ERs... waiting lines in government buildings.... and so forth... just a little something for the discussion.
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Compared to traditional physical publishing and distribution, yes. Compared to competing net/web-based platforms, no. You ignore that some such as Netflix already have their infrastructure in place and this 30% charge that Apple is proposing is directly comparable, as far as Netflix is concerned, to a credit-card processing fee and it is therefore preposterous....
It's not a fee for service, it's revenue sharing that every developer, large and small, agreed to. What is being argued is that big companies like Amazon ought not have to abide by their contracts because they don't need Apple to sell content, it's as simple as that.
All hail the power of the mod. Amazing how you don't get called a troll for making similar arguments to mine...
In any event, I do see the point of Apple's 30% cut. They were trying to be consistent across the board. I think the part that might make it untenable for some is the insistence that you must offer subscriptions to iOS users and you must do it at a universal price point, while Apple takes its 30% cut. So no chance to just offer straight viewers.
One could argue that by offering viewers, these companies are passing up the benefits of being able to sign up 160 million customers and that they are merely catering to their exisitng customer base who use iOS devices. But Apple doesn't give developers even that choice. It's either all in, with the 30% cut on iOS or all out. That's quite a harsh line.
He doesn't get called a troll because his comments in this thread and historically don't suggest that he is.
What you call harsh, some call fair. Why Amazon and other large companies should be allowed to steal revenue from the App Store just because they can and leave other, smaller, developers to foot their bill is beyond my understanding.
You're missing a very big point here. The 30% is not for processing subscription payments. The 30% is the revenue the developer agreed to share with Apple
Give me a break! Sure, it's in the agreement. You call it a "revenue share", and I'll call it what it amounts to, which is a 30% fee for processing subscription payments.
I don't understand why everyone keeps evaluating this in a fee for services context
It's because that's what it amounts to. Apple performs a service: processing payments; Apple charge a fee: 30% of the payment amount. Yes, there are non-tangible benefits here such as Apple "providing" a huge customer base, but in this context Apple providing said customer base costs Apple nothing (that's been paid for already through the purchase price of the hardware).
when it's all about the revenue sharing that the developers agreed to do.
Which developers have no choice to agree to if they want to sell apps for iOS devices.
As has been pointed out above and in numerous previous threads, allowing these shell apps to be given away for free and sell all their content for free, or even at a reduced rate, is a recipe for every developer hiding every penny of revenue they can from Apple
Clearly people pointing this out on numerous occasions are willfully ignoring the fact that Apple vet all applications before allowing them into the app store and can therefore easily prevent this from happening.
And there is absolutely no reason to think that this will be anything but good for the consumer.
Apart from if it means no content on iOS devices because content providers are unwilling to pay Apple's exorbitant fees. Some content providers will be able to move to HTML5 delivery over the web, but this could easily become a second-thought approach with development focus on android-native apps. Some content providers wouldn't be able to use web-delivery due to DRM requirements.
First of all, with subscriptions, all data collection is opt-in so this preserves customer's privacy. They are also easier to manage and cancel. And, more generally, this policy improves the iOS user experience and lessens the likelihood that users will become victims of fraud by requiring that IAP be used, and not some random website that may or may not be legitimate or secure.
Yes, these are all good for iOS users and therefore iOS users should be wishing that Apple make it much more appealing for content providers to use this method. Seriously, why is Apple making it so difficult for themselves? The answer is that they are being greedy: they already make massive margins on the hardware, and now they're trying to excessively milk content delivery as well. As I said in a previous post, a lower fee would make for a more attractive platform for content providers which would make for a more attractive platform for potential users which would result in Apple selling more hardware, where they make their real money.
"all their profits will go to Apple and they'll leave iOS,"
This could easily result in prices increasing. And it's not about whether people leave iOS, it's about whether they even come to it in the first place. There are not currently that many magazines or newspapers sold by subscription as a native iOS app.
Amazon not only isn't going to lose money on iOS users, it isn't going to lose money on IAPs.
They won't "make a loss", but they will "lose money" in as much as if they don't raise prices, they will lose 30% of their revenue to Apple.
But, the fear that people have is that they won't be able to read their Kindle content on iOS devices. (As though the reader app would be deleted from their devices, which it won't.)
No it won't but if Amazon remove it it won't be available to future iOS users which makes iOS less attractive to potential customers, which is not in the interests of current users of a still relatively young platform.
Give me a break! Sure, it's in the agreement. You call it a "revenue share", and I'll call it what it amounts to, which is a 30% fee for processing subscription payments.
...
It's because that's what it amounts to. Apple performs a service: processing payments; Apple charge a fee: 30% of the payment amount. Yes, there are non-tangible benefits here such as Apple "providing" a huge customer base, but in this context Apple providing said customer base costs Apple nothing (that's been paid for already through the purchase price of the hardware).
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Which developers have no choice to agree to if they want to sell apps for iOS devices.
Yeah, and those wishing to sell through Amazon have no choice but to agree to Amazon's terms. There's nothing shocking or unusual about the terms of the app store. In contrast to what came before it, it's quite reasonable and fair. And it is revenue sharing. The fact is unless Apple requires that IAP use Store Kit and that all IAP are subject to the revenue sharing, it becomes trivial for "developers" to hide revenue and cheat on the developer agreement.
Clearly people pointing this out on numerous occasions are willfully ignoring the fact that Apple vet all applications before allowing them into the app store and can therefore easily prevent this from happening.
Isn't that exactly what they are doing here?
Apart from if it means no content on iOS devices because content providers are unwilling to pay Apple's exorbitant fees. Some content providers will be able to move to HTML5 delivery over the web, but this could easily become a second-thought approach with development focus on android-native apps. Some content providers wouldn't be able to use web-delivery due to DRM requirements.
There simply is no reason at this point to believe this scenario is true. People are tossing around a lot of numbers to try to show it's what will happen, but the numbers are just being pulled out of hats and any and all contradictory evidence ignored.
Yes, these are all good for iOS users and therefore iOS users should be wishing that Apple make it much more appealing for content providers to use this method. Seriously, why is Apple making it so difficult for themselves? The answer is that they are being greedy: they already make massive margins on the hardware, and now they're trying to excessively milk content delivery as well. As I said in a previous post, a lower fee would make for a more attractive platform for content providers which would make for a more attractive platform for potential users which would result in Apple selling more hardware, where they make their real money.
Again, this amounts to an argument that big companies ought to be subsidized in the App Store by small developers. Hardly fair to them.
This could easily result in prices increasing. And it's not about whether people leave iOS, it's about whether they even come to it in the first place. There are not currently that many magazines or newspapers sold by subscription as a native iOS app.
It's not going to make subscriptions any more expensive. Those publishers are already paying that much or more for subscriptions and making most of their money from ads.
They won't "make a loss", but they will "lose money" in as much as if they don't raise prices, they will lose 30% of their revenue to Apple.
They aren't going to lose 30% of their revenue, or even 30% of their revenue from iOS users. They may make less money, but the reason they were making more money in the first place is because they were cheating on their contracts.
No it won't but if Amazon remove it it won't be available to future iOS users which makes iOS less attractive to potential customers, which is not in the interests of current users of a still relatively young platform.
Which is exactly why people ought to be focused on the DRM issues here. That the, albeit unlikely, possibility that a single vendor might withdraw from a platform causes wide-spread panic ought to give pause to think about exactly why. The reason is that Amazon has locked customers into proprietary DRM and now they essentially own those customers. The real issue that ought to be under discussion is just how dangerous proprietary DRM is in the eBook market.
Yeah, and those wishing to sell through Amazon have no choice but to agree to Amazon's terms.
Apples and oranges. Amazon aren't trying to get a tablet platform off the ground.
it is revenue sharing.
That amounts to a 30% payment processing fee. Why should Apple expect to share 30% of content provider's revenue, when the only thing Apple is doing is processing payments? Just because it's fairer than other distribution methods (this is debatable), doesn't mean it's fair.
Apple make their money selling the hardware and should look to make a small profit on iTunes/appstore. It's a business model that worked fantastically well for Apple in the mp3-player market and I see no reason why it should not work equally well with the arguably more important tablet market (mp3 market was transient and is giving way to the smartphone and tablet markets which will be around for a lot longer).
I'm going to have to assume that you will agree that a 10% fee would be more attractive to content providers than a 30% fee and would almost certainly be over breakeven for Apple.
The fact is unless Apple requires that IAP use Store Kit and that all IAP are subject to the revenue sharing, it becomes trivial for "developers" to hide revenue and cheat on the developer agreement.
And it would be trivial for Apple to spot this. They could require such apps to charge $.99 up front to cover the initial app distribution cost, even without this a 10% fee as I propose would still earn Apple money in the vast majority of cases.
Again, this amounts to an argument that big companies ought to be subsidized in the App Store by small developers.
No it doesn't. The proposed 10% subscription fee would cover the initial app distribution fee, or as I said earlier Apple could require a $.99 initial app price. No subsidising here.
It's not going to make subscriptions any more expensive.
It will if content providers wish to maintain their revenues.
The real issue that ought to be under discussion is just how dangerous proprietary DRM is in the eBook market.
So you are anti the iBooks as well?
DRM has to be proprietary in order to function. Presumably you mean DRM being proprietary to a major content provider is a bad thing?
Apples and oranges. Amazon aren't trying to get a tablet platform off the ground.
Well, that's debatable.
That amounts to a 30% payment processing fee. Why should Apple expect to share 30% of content provider's revenue, when the only thing Apple is doing is processing payments? Just because it's fairer than other distribution methods (this is debatable), doesn't mean it's fair.
Because it is not a payment processing fee.
Apple make their money selling the hardware and should look to make a small profit on iTunes/appstore. ...
And they do, and will continue to only make a small profit.
I'm going to have to assume that you will agree that a 10% fee would be more attractive to content providers than a 30% fee and would almost certainly be over breakeven for Apple.
Certainly 10% would be more attractive to them, but how much over break even is entirely debatable. I certainly don't believe this means as much money out of Amazon's pockets as is being claimed, especially since all these claims are based on the assumption that all eBooks purchased by iOS users will be purchased via IAP, which they won't.
But, right now they are paying 0%, which is even more attractive to them.
And it would be trivial for Apple to spot this. They could require such apps to charge $.99 up front to cover the initial app distribution cost, even without this a 10% fee as I propose would still earn Apple money in the vast majority of cases.
No it doesn't. The proposed 10% subscription fee would cover the initial app distribution fee, or as I said earlier Apple could require a $.99 initial app price. No subsidising here.
Yet, in your scenario, Amazon, which according to claims is making piles of money off their iOS apps, which it's claimed they will now loose entirely, pays much less than a developer selling a $4.99 app, less still than a $14.99 app. Yet, who is generating more revenue? Still seems like subsidization to me.
So you are anti the iBooks as well?
DRM has to be proprietary in order to function. Presumably you mean DRM being proprietary to a major content provider is a bad thing?
Yes, I don't and won't buy eBooks (I read plenty of free, public domain books.) until there is an open standard for DRM (and that doesn't mean it has to be free or open source, just like H.264 is an open standard, but not free or open source.). There is absolutely no reason it has to be proprietary, and what people ought to be upset about is that vendors are allowed to lock their content up with DRM, essentially making them prisoners of a single eBook vendor, and that goes for iBooks as well.
Because it is not a payment processing fee.
In terms of subscriptions, that's what it amounts to because the only thing Apple does is process a payment.
Certainly 10% would be more attractive to them
So why not just make it 10% and be done with it? End this arguing, make content producers happy, increase the attractiveness of the iOS platform and gain through increased sales of high-margin hardware.
but how much over break even is entirely debatable.
Well, there are plenty of online payment platforms out there (protx, paypal etc.) who are making money charging much less than 10% to process payments, so 10% would definitely cover Apple's costs.
until there is an open standard for DRM (and that doesn't mean it has to be free or open source, just like H.264 is an open standard, but not free or open source.).
Actually, there are open-source implementations of the H.264 standard (both encoders and decoders)
There is absolutely no reason it has to be proprietary
Yes there is. DRM is about restricting what you can do with content, and it works by encrypting the content, then giving the user the encrypted content, a "player" with an obfuscated decryption algorithm, and the decryption key. The player will only decrypt your content according to the terms of the DRM. If the decryption algorithm were not obfuscated, you could decrypt the content with your own program (using the key they have to give you otherwise the official player couldn't work), and then use the content however you want.
Having an "open" DRM system would by definition mean a non-obfuscated decryption algorithm, but it's the obfuscation of the algorithm that is required in order for DRM to function.
Whilst DRM has to be proprietary, the proprietor(s) needn't be content producers/sellers, which mitigates the risks.
Of course, no DRM is nicer as DRM tends to piss off legitimate users without stopping thieves thieving stuff.
Give me a break! Sure, it's in the agreement. You call it a "revenue share", and I'll call it what it amounts to, which is a 30% fee for processing subscription payments.
And access to 160M potential customers.
It's because that's what it amounts to. Apple performs a service: processing payments; Apple charge a fee: 30% of the payment amount. Yes, there are non-tangible benefits here such as Apple "providing" a huge customer base, but in this context Apple providing said customer base costs Apple nothing (that's been paid for already through the purchase price of the hardware).
This "non tangible" benefit is the majority of the value of the ecosystem. It costs Apple a significant amount of money and effort to develop a successful product line like the iPad. The purchase price of the hardware is just one of many ways to profit from that highly successful invention.
Which developers have no choice to agree to if they want to sell apps for iOS devices.
With it's huge user base, easy development environment and top notch ecosystem. They are free to exclusively develop for Android if this agreement is overly burdensome.
Clearly people pointing this out on numerous occasions are willfully ignoring the fact that Apple vet all applications before allowing them into the app store and can therefore easily prevent this from happening.
Which they are now doing so. So the problem is what? App approvals were too slow! So they opened the gates a bit until better policies and more staff can be trained to enforce those polices.
Apart from if it means no content on iOS devices because content providers are unwilling to pay Apple's exorbitant fees.
Actual content providers probably are used to less than 70% of gross.
Some content providers will be able to move to HTML5 delivery over the web, but this could easily become a second-thought approach with development focus on android-native apps. Some content providers wouldn't be able to use web-delivery due to DRM requirements.
Streaming netflix works okay most of the time. But I still have movies natively loaded because it certainly doesn't work enough of the time. For ebooks it would be stupid to rely only on HTML5 access because of all the use cases where you might want to read a book is not where wifi is and sometimes not even 3g or edge.
No it won't but if Amazon remove it it won't be available to future iOS users which makes iOS less attractive to potential customers, which is not in the interests of current users of a still relatively young platform.
No, it makes KINDLE less attractive and disastrously so. Because sure as hell B&N will stay if Amazon is dumb enough to pull the app because then only the Nook ebook ecosystem will be buy once and read everywhere.
With 160M and growing users not having iOS access is a gaping hole in that buy once and read everywhere concept.
In terms of subscriptions, that's what it amounts to because the only thing Apple does is process a payment.
So why not just make it 10% and be done with it? End this arguing, make content producers happy, increase the attractiveness of the iOS platform and gain through increased sales of high-margin hardware.
Using that logic, then when a game developer sells you new game levels through IAP, all Apple is doing is processing a payment, so why should they have to pay 30%?
The reason is that if they didn't, game developers would give away games and sell the levels for a lower, perhaps 0%, share to Apple, effectively gaming the system to hide revenue. This is absolutely no different.
On the other hand, if Apple made it 10%, there would be just as much uproar, and Apple ends up in a much weaker bargaining position with those who are currently paying 0%.
Yes there is. DRM is about restricting what you can do with content, and it works by encrypting the content, then giving the user the encrypted content, a "player" with an obfuscated decryption algorithm, and the decryption key. The player will only decrypt your content according to the terms of the DRM. If the decryption algorithm were not obfuscated, you could decrypt the content with your own program (using the key they have to give you otherwise the official player couldn't work), and then use the content however you want.
Having an "open" DRM system would by definition mean a non-obfuscated decryption algorithm, but it's the obfuscation of the algorithm that is required in order for DRM to function.
Whilst DRM has to be proprietary, the proprietor(s) needn't be content producers/sellers, which mitigates the risks.
Of course, no DRM is nicer as DRM tends to piss off legitimate users without stopping thieves thieving stuff.
Yes, it can't be completely open, but it can be non-proprietary and not locked to a single vendor, just like SSL certificates are held "in trust" by certificate authorities, so could DRM keys. Perhaps 'open standard' and 'non-proprietary' are not the best choice of words, but the point is that buyers of digital content ought not have their ability to legitimately use that content controlled by a single company, and that the method for accessing that content ought to be a single one that is open to all reader software, just like authenticating SSL certificates is open to all browsers.
On the other hand, if Apple made it 10%, there would be just as much uproar
Come on, you know this isn't true. The uproar is about the level Apple want to charge, not that the charge exists.
just like SSL certificates are held "in trust" by certificate authorities, so could DRM keys.
The problem is not one of distributing keys, it's one of the algorithm used to decrypt content using the key. You have to give the user the key, otherwise even the "restricted" player can't decode the content. But if the decryption algorithm is not obfuscated (as it wouldn't be, by definition, if it were an open standard) you could use the key and the known decryption algorithm to decrypt the content and circumvent the DRM.
You could of course have an open standard whose specification document is very expensive for the average consumer, say $100,000, and has strict NDAs attached. But the risk of the spec. being leaked is high, and as soon as it is leaked, it would have to be fundamentally changed at massive cost to all those who are legitimately implementing the standard.
Apples and oranges. Amazon aren't trying to get a tablet platform off the ground.
Tablet platform is off the ground. In a decisive way.
If anything the Kindle ecosystem is less off the ground and needs iOS far more than iOS needs Kindle.
That amounts to a 30% payment processing fee. Why should Apple expect to share 30% of content provider's revenue, when the only thing Apple is doing is processing payments? Just because it's fairer than other distribution methods (this is debatable), doesn't mean it's fair.
Again, that 30% of revenue sharing is for the strategic advantage of access to 160M+ iOS users.
This is exactly what you pay middlemen for. A high concentration of potential customers. Otherwise everyone would be selling direct and not taking 70% of the revenue stream but 100% of the revenue stream.
Apple make their money selling the hardware and should look to make a small profit on iTunes/appstore.
And that is all they are doing according to the conference call. The 30% revenue sharing should have very limited impact to the bottom line. It DOES, however, make sure that those folks with competing hardware ecosystems (Kindle, Nook, etc) pays a fair market price for access to the iOS market.
I'm going to have to assume that you will agree that a 10% fee would be more attractive to content providers than a 30% fee and would almost certainly be over breakeven for Apple.
These aren't content producers but content resellers. And no, it wouldn't be "over breakeven" for Apple from a strategic point of view.
Apple does not want to be a commodity hardware provider that hosts other ecosystems. They want to insure that the NATIVE ecosystem remain the competitive advantage that they have labored long and hard to develop.
Folks that want a commodity hardware/software platform should look to Android. You get what you pay for.
No it doesn't. The proposed 10% subscription fee would cover the initial app distribution fee, or as I said earlier Apple could require a $.99 initial app price. No subsidising here.
Tremendous subsidizing here. This is like Amtrak saying "Hey, Southwest, carry these passengers for me and I'll pay the gas, that's like no subsidies, mkay?" It completely ignores the cost of developing and running a successful airline. Carry those passengers on your own trains buddy.
So you are anti the iBooks as well?
DRM has to be proprietary in order to function. Presumably you mean DRM being proprietary to a major content provider is a bad thing?
No, DRM does not have to be proprietary to function. There are (mostly unused) open source DRM solution. And no, DRM algorithms do not have be hidden to work. They need to be secure from tampering and the keys also need to be secure. Typically this requires a trusted platform (cell phone, etc) that restrict access to the keys except from signed and approved apps.
The actual algorithms can be well known. For example the OMA DRM is a public spec and has an open source implementation. http://sourceforge.net/projects/openipmp/
AND, there are also other industry standard DRM solutions that allow for interoperability. For ebooks the I would have gone ePub with Adobe DRM as a potential defacto standard...it's missing Kindle and iBooks so it's really nascent but interoperability between the latest Nooks and Sony ebook readers is nice (the older Sonys don't do epub/adobe).
And yes, iBooks isn't compliant since they use ePub w/Fairplay. I probably wouldn't buy from the iBookStore except for non-DRM titles. This is one area where Apple might decide to switch from Airplay for strategic reasons. By adopting the Adobe DRM spec then iBooks can sideload from other 3rd party book stores...then all books are iBooks...
Come on, you know this isn't true. The uproar is about the level Apple want to charge, not that the charge exists.
I disagree. The uproar is, wrongly, about the fact that Apple is asking for what is perceived as a hefty "payment processing" fee, when in fact all they are doing is enforcing revenue sharing provisions of the developer agreement.
... And yes, iBooks isn't compliant since they use ePub w/Fairplay. I probably wouldn't buy from the iBookStore except for non-DRM titles. This is one area where Apple might decide to switch from Airplay for strategic reasons. By adopting the Adobe DRM spec then iBooks can sideload from other 3rd party book stores...then all books are iBooks...
Except of course for Kindle books.
But, yes, these single company DRMs are the biggest problem with eBook publishing and the only way to end this is to vote with our dollars, which means not buying DRMed eBooks until this changes. I'd not be keen on Adobe DRM, either, since, again, the whole thing is controlled by a single entity, but it might be better than the current situation.
In other words, if the eBook DRM situation weren't already fubar for consumers, no one would even care about this issue.
Except of course for Kindle books.
But, yes, these single company DRMs are the biggest problem with eBook publishing and the only way to end this is to vote with our dollars, which means not buying DRMed eBooks until this changes. I'd not be keen on Adobe DRM, either, since, again, the whole thing is controlled by a single entity, but it might be better than the current situation.
In other words, if the eBook DRM situation weren't already fubar for consumers, no one would even care about this issue.
90% of my paid ebooks are from Baen books and aren't DRM'd. The free ebooks from Baen and other folks still dominate the collection since I've started borrowing ebooks from the library.
They typically use ePub + Adobe or Overdrive.
I would buy a Nook...and am still tempted to get a Nook Color. Kindle, not so much.
Don't like Apple's choices? Try the competition.
Exactly.
You have two arguments here, one: Apple are charging too much. Two: the developers are taking the piss and bee taking Apple for a free ride.
At the end of the day, if you are making money on apps in the iTunes store you got to pay Apple. If you don't like that then stop publishing in iTunes. If enough devs move to Android then maybe Apple will revise its pricing.
Just some information, not taking sides. I am an intense Kindle iOS user. I sometimes read or at least partially read 2 books a day. I DO NOT purchase the books through the iOS device. I purchase on the Amazone Website and down load to the device (s)... that is .. all my Kindle capable devices. I also purchase hard copy part of the time. Why... so I can read anywhere with whatever device I happen to have at hand which often works out to be an iPhone. But it could also be my laptop... an electronic pad.... and I have the hard copy because there are places where you are not allowed to have an electronic device turned on... Airplane take off and landings, hospital ERs... waiting lines in government buildings.... and so forth... just a little something for the discussion.
So what did it add?
So what did it add?
He's a huge fan of thread necrophilia?
He's a huge fan of thread necrophilia?
Holy 2011, Batman. Didn’t even notice.