Once in a while AI gets a comment from someone who actually has real knowledge of the topic at hand. A know-it-well rather than a know-it-all like the rest of us.
My take is this whole brouhaha over the 30% is just a dance that Apple and the publishers have to go through as part of the negotiation process. Neither party really knows how much room the other has for price flexibility because it's a new way of doing business. In the end if 30% is really too high that the subscribers will walk away then Apple will offer secret discounts on a case-to-case basis. But we will never know how much a publisher is really paying Apple.
30% cut is not the real issue. Major publishers can afford to give that but what they really want is personal info of subscribers that Apple refuses to just hand out. Publishers makes more money off selling Ads than subscription. Apple is compromising with Opt-In letting consumers decide to give their personal info away but publishers are insisting on Opt-Out.
Your logic is crazy. You say prices will be higher on the iPad because Apple "won't let the publisher charge less on their own web site". That's your argument?
As for the 30% commission, how is it fair for Apple to charge 30% to the developers of Angry Birds, but not publishers. I'm a former newspaper and magazine publisher, and even I don't see the logic of expecting Apple to go commission-free for us publishers. We publishers get charged for distribution by newsstand distributors, we pay the USPS, we pay our printers, we pay our subscription telemarketing firms, hell, we pay everybody! . . . 30% is a bargain compared to all the other charges we face.
Magazine and newspaper publishers are lucky, damn lucky to make a 10 to 20 percent return on our products -- most don't. The 30% charge, on a price we set, seems reasonable to me. It's better than what Amazon is offering me: they will give me 30%, but they get to set the price.
That's a good point. I work for a magazine/newspaper but I am somewhat skeptical. Your point really warms me to this idea which I was initially cold on. So publishers can set the price 30% higher. I don't see a problem with that at Itunes type prices.
Exactly. Further, processing the payment and hosting the data costs money. Try creating that infrastructure yourself. On top of that, Apple is giving the publishers a platform to make money. Publishers aren't making seventy percent on Amazon. Moreover, publishing on the platform is optional.
Quote:
Originally Posted by Damn_Its_Hot
But is this not exactly what Amazon does? I dare say they are not creating content and then selling it. The are buying it at wholesale prices, marking it up and selling it to make a buck. Why shouldn't Apple be able to do the same thing? Why is it evil for Apple to do this but OK for Amazon? Amazon is bummed because a site that they paid nothing to sell before now says "hey if you are going to use us to facilitate the sale we want our share". Maybe you feel that is not fair but artists/writers/musicians have said the same thing about getting their product sold for a long time. You can either use the service or not. It is left as a choice - but don't give away an app as a vehicle to generate sales for yourself and expect someone else to tote the line for you.
No, the difference is that Amazon/Sony/Apple (with iBooks) is hosting the content, in the in app case, Apple only precesses the payment, the hosting is still done by the provider.
I am not sure what you mean by hosting. At least with the App store's iBooks this is not a cloud situation where they stream books to me and I can keep a zillion books in their library. I buy a book and download it to my device (just like music on iTunes). It is mine at that point. No hosting here other than for the sale (which is not really different from the brick and mortar model).
I know the Kindle is somewhat of a different beast but I was under the impression that you still have to download what you buy i.e., it is not some sort of streaming thing (e.g., renting a movie on iTunes, key word here is rent).
but - I am sure someone will correct me if I am wrong; everyone here is always so king about that. [/QUOTE]
Yes all of the people here with business degrees and intimate knowledge of the publishing world are providing us with wonder analysis. I am sure all business deals from food to cars, etc would receive the same treatment if they were regularly published. This of course is not american idol, people do not get to vote, they can just choose what and where they buy products.
I am not sure what you mean by hosting. At least with the App store's iBooks this is not a cloud situation where they stream books to me and I can keep a zillion books in their library. I buy a book and download it to my device (just like music on iTunes). It is mine at that point. No hosting here other than for the sale (which is not really different from the brick and mortar model).
I know the Kindle is somewhat of a different beast but I was under the impression that you still have to download what you buy i.e., it is not some sort of streaming thing (e.g., renting a movie on iTunes, key word here is rent).
When you buy a book from Amazon the book is hosted on Amazon servers. When you buy a book through in app App Store, Apple only processes the payment, the book is also hosted on Amazon. Apple ONLY processes the payment, they don't host the content, they don't distribute the content, they only take the 30% cut.
so major credit cards charge 1.5 - 2.7% for a transaction fee, processing all of the data.
...Apple has decided that they want 30%, AND won't allow publishers to offer a lower price anywhere outside of their store? ridiculous
i should be able to subscribe to a publishers content through the convenience of the app store for a slight upcharge, and still be able to get that subscription directly from the publisher for slightly less.
You make it sound like it's stupid, but just think. Whatever the cost to produce the thing, factor in a profit, that's C+P. Add Apple's cut, that's C+P+A, with A= 30% of C+P.
Still following?
Price can't be higher on the app store per the Apple rule aforementionned, which means inapp = C+P+A < O, with O the outside price.
By pure mathematics, O is now higher than it was earlier.
And since the reseller is NOT going to sell at a loss, and it's highly doubtful P<A with A, remember, equal to 30% of the whole price, you get (C+P+A+O)/2 > original price.
Prices, hence are higher on the iPad because Apple "won't let the publisher charge less on their own web site", Quod Erat Demonstrandum.
You make it sound like profit margins aren't greater than 30%. This isn't necessarily, or even usually the case. A company in the publishing business can EASILY give up 30% and still be making profit. The price will continue to be set at what makes the most money. Suppliers of content won't increase outside prices by 30% if that means they will sell 1/5 as much. I wouldn't worry too much about prices going skyrocket. Hard copy magazines are currently an absurd $6-20, and I don't see this happening when a few clicks of a button and a company realizes they are making 40% more money. They will do what is most profitable, and they can't just 'raise' prices without paying the price.
He knows a lot of publishing but he doesn't know that Apple doesn't distribute content from other publishers like Amazon, Sony, Kobo, Audible, etc. They all distribute the content
Isn't Apple only distributing the app while the content is distributed by Amazon et al. I don't see any justification for a 30% cut if Apple is just processing the payment for the content.
I don't suppose any of us can wait to see this in practice to make an informed decision of how it impacts us economically? I know that goes against the peculiar need to show others how smart we are, but it could be helpful.
My take is that since Amazon is not a publisher nor do they sell subscriptions it shouldn't affect them at all.
But I could be wrong.
There was a kindle app update this morning. No change as far as I can tell in purchasing books. You press 'Kindle Store' and Safari opens on the Kindle Store. There is no in app purchase option there.
The apologists are out in force. This is a cost for being on the platform. It needs the publishers to have a 43% margin to begin with, as the 30% applies on top of everything.
So Kindle and Skype will probably leave.
Most people who buy Apple products are not of the mindset of the people on here - buyers of iPods are clearly not buyers of Macs, same with iPhones and iPads.
In some future date the buyer will go into a shop, ask for a tablet and the technically minded seller - a group often hostile to Apple - will suggest that they take a look at Android as all the books they bought on Kindle and Sony E-Books will not be available.
I don't suppose any of us can wait to see this in practice to make an informed decision of how it impacts us economically? I know that goes against the peculiar need to show others how smart we are, but it could be helpful.
I don't see how 'waiting and seeing' is helpful. Of course, making absurd conjectures can be destructive. But, just sitting around doing nothing isn't usually "helpful".
Once in a while AI gets a comment from someone who actually has real knowledge of the topic at hand. A know-it-well rather than a know-it-all like the rest of us.
My take is this whole brouhaha over the 30% is just a dance that Apple and the publishers have to go through as part of the negotiation process. Neither party really knows how much room the other has for price flexibility because it's a new way of doing business. In the end if 30% is really too high that the subscribers will walk away then Apple will offer secret discounts on a case-to-case basis. But we will never know how much a publisher is really paying Apple.
Not all industries are created equal and have the same margins.
Quote:
Originally Posted by wdowell
Well, this proves he's not ailing too much if he's able to contribute to the press release?!
Incorrect analogy, Apple is not distributing anything.
I agree they are not distributing, they are selling.It is no different than any other service - except I get it that you don't like how much they are charging for that service. Just like the folks that send me a huge package of magazine subscriptions (in the US one example is Publisher Clearing House). They may not be sending out every magazine but they are in fact selling subscriptions. Is this wrong too?
I agree they are not distributing, they are selling.It is no different than any other service - except I get it that you don't like how much they are charging for that service. Just like the folks that send me a huge package of magazine subscriptions (in the US one example is Publisher Clearing House). They may not be sending out every magazine but they are in fact selling subscriptions. Is this wrong too?
Don't buy it if it costs too much!
They were not selling, they have started to sell and forcing to put this option and disabling links to the browser to cut the 30%, so different.
How about all of those upset by apple's 30% take(cause you must have read the whole deal yourself) write or call the publisher and tell them they are making a GIANT mistake. That you will provide them an avenue which holds millions of people in which to sell their magazine. And you will do it for free or practically free,(not sure what the general consensus is to what percentage should be paid) ! Next you should check with all of the vendors who sell through amazon and make sure they too are getting a good deal and not having to give up too much. And then you should go after day traders, all they do is buy and sell stock to make money, all the while raising prices on everything including magazines! You will really be putting your MBA to good use rather than just posting on some random websites.
And I am sick of getting 10k mailings to subscribe or resubscribe. If I choose to do it via iTunes and the new publication is coming from apple why shouldn't they keep 30%? Its more content that comes through apples channel and cant be given away, hosted, payment processed for free!
Otherwise whats to stop someone from putting up a free app and then charging for subscription and not giving apple a dime and getting apple to host and market it.
And when you said apple isn't doing anything, thats wrong. They are hosting, marketing (being in the app store is marketing, believe it or not, and processing payment. All that does cost.
With all said and done maybe 30 percent is high for subscription. Maybe 20 or 15. But I dont know what the cost of processing payment and hosting all the content costs apple. But that cost should definitely be forwarded to the content provider.
And yes I do want to get my subscriptions all from iTunes and not have to worry about going to external sites and sharing my data with more companies. I would pay more for it. If they dont like it then they can not be on iTunes and I simply wont have their publication.
Quote:
Originally Posted by Wiggin
I disagree. 30% for nothing more than processing the payment and passing the data? If the person purchased within the app, the iTunes UI/browser wasn't used. Apple didn't perform any marketing to get the attention of the subscriber since they purchased it in, not via the iTunes UI.
I was hoping an iPad could replace the stack of magazines on my table, but I don't think that is going to happen anytime soon. Since Apple won't let the publisher charge less on their own web site, all subscription prices are going to be pushed higher due to Apple's policies. Online subscriptions, if available at all, will probably cost more than the print copy mailed to my door.
I agree they are not distributing, they are selling.It is no different than any other service - except I get it that you don't like how much they are charging for that service. Just like the folks that send me a huge package of magazine subscriptions (in the US one example is Publisher Clearing House). They may not be sending out every magazine but they are in fact selling subscriptions. Is this wrong too?
Don't buy it if it costs too much!
Its hardly semantics. Amazon ( or Sony) have the books on their server, they have bought the content rights, they can handle the credit card transaction themselves.
Apple, supplying none of this, is getting in the middle. By forcing the same price ( or better, lol) in the in App purchase the user is going to use the in-app purchase to renew.
BTW Apple could allow that button to be an link to the credit card transactions from Amazon, they already banned that with 11.2, this is new, it means the only button on your app is going to take 30% of your total price, meaning to need to have 43% margins. Nobody really has that.
Comments
Once in a while AI gets a comment from someone who actually has real knowledge of the topic at hand. A know-it-well rather than a know-it-all like the rest of us.
My take is this whole brouhaha over the 30% is just a dance that Apple and the publishers have to go through as part of the negotiation process. Neither party really knows how much room the other has for price flexibility because it's a new way of doing business. In the end if 30% is really too high that the subscribers will walk away then Apple will offer secret discounts on a case-to-case basis. But we will never know how much a publisher is really paying Apple.
30% cut is not the real issue. Major publishers can afford to give that but what they really want is personal info of subscribers that Apple refuses to just hand out. Publishers makes more money off selling Ads than subscription. Apple is compromising with Opt-In letting consumers decide to give their personal info away but publishers are insisting on Opt-Out.
Your logic is crazy. You say prices will be higher on the iPad because Apple "won't let the publisher charge less on their own web site". That's your argument?
As for the 30% commission, how is it fair for Apple to charge 30% to the developers of Angry Birds, but not publishers. I'm a former newspaper and magazine publisher, and even I don't see the logic of expecting Apple to go commission-free for us publishers. We publishers get charged for distribution by newsstand distributors, we pay the USPS, we pay our printers, we pay our subscription telemarketing firms, hell, we pay everybody! . . . 30% is a bargain compared to all the other charges we face.
Magazine and newspaper publishers are lucky, damn lucky to make a 10 to 20 percent return on our products -- most don't. The 30% charge, on a price we set, seems reasonable to me. It's better than what Amazon is offering me: they will give me 30%, but they get to set the price.
That's a good point. I work for a magazine/newspaper but I am somewhat skeptical. Your point really warms me to this idea which I was initially cold on. So publishers can set the price 30% higher. I don't see a problem with that at Itunes type prices.
But is this not exactly what Amazon does? I dare say they are not creating content and then selling it. The are buying it at wholesale prices, marking it up and selling it to make a buck. Why shouldn't Apple be able to do the same thing? Why is it evil for Apple to do this but OK for Amazon? Amazon is bummed because a site that they paid nothing to sell before now says "hey if you are going to use us to facilitate the sale we want our share". Maybe you feel that is not fair but artists/writers/musicians have said the same thing about getting their product sold for a long time. You can either use the service or not. It is left as a choice - but don't give away an app as a vehicle to generate sales for yourself and expect someone else to tote the line for you.
No, the difference is that Amazon/Sony/Apple (with iBooks) is hosting the content, in the in app case, Apple only precesses the payment, the hosting is still done by the provider.
I am not sure what you mean by hosting. At least with the App store's iBooks this is not a cloud situation where they stream books to me and I can keep a zillion books in their library. I buy a book and download it to my device (just like music on iTunes). It is mine at that point. No hosting here other than for the sale (which is not really different from the brick and mortar model).
I know the Kindle is somewhat of a different beast but I was under the impression that you still have to download what you buy i.e., it is not some sort of streaming thing (e.g., renting a movie on iTunes, key word here is rent).
Yes all of the people here with business degrees and intimate knowledge of the publishing world are providing us with wonder analysis. I am sure all business deals from food to cars, etc would receive the same treatment if they were regularly published. This of course is not american idol, people do not get to vote, they can just choose what and where they buy products.
I am not sure what you mean by hosting. At least with the App store's iBooks this is not a cloud situation where they stream books to me and I can keep a zillion books in their library. I buy a book and download it to my device (just like music on iTunes). It is mine at that point. No hosting here other than for the sale (which is not really different from the brick and mortar model).
I know the Kindle is somewhat of a different beast but I was under the impression that you still have to download what you buy i.e., it is not some sort of streaming thing (e.g., renting a movie on iTunes, key word here is rent).
When you buy a book from Amazon the book is hosted on Amazon servers. When you buy a book through in app App Store, Apple only processes the payment, the book is also hosted on Amazon. Apple ONLY processes the payment, they don't host the content, they don't distribute the content, they only take the 30% cut.
Exactly. Further, processing the payment and hosting the data costs money
Apple is NOT hosting any data.
...Apple has decided that they want 30%, AND won't allow publishers to offer a lower price anywhere outside of their store? ridiculous
i should be able to subscribe to a publishers content through the convenience of the app store for a slight upcharge, and still be able to get that subscription directly from the publisher for slightly less.
He's damn right.
You make it sound like it's stupid, but just think. Whatever the cost to produce the thing, factor in a profit, that's C+P. Add Apple's cut, that's C+P+A, with A= 30% of C+P.
Still following?
Price can't be higher on the app store per the Apple rule aforementionned, which means inapp = C+P+A < O, with O the outside price.
By pure mathematics, O is now higher than it was earlier.
And since the reseller is NOT going to sell at a loss, and it's highly doubtful P<A with A, remember, equal to 30% of the whole price, you get (C+P+A+O)/2 > original price.
Prices, hence are higher on the iPad because Apple "won't let the publisher charge less on their own web site", Quod Erat Demonstrandum.
You make it sound like profit margins aren't greater than 30%. This isn't necessarily, or even usually the case. A company in the publishing business can EASILY give up 30% and still be making profit. The price will continue to be set at what makes the most money. Suppliers of content won't increase outside prices by 30% if that means they will sell 1/5 as much. I wouldn't worry too much about prices going skyrocket. Hard copy magazines are currently an absurd $6-20, and I don't see this happening when a few clicks of a button and a company realizes they are making 40% more money. They will do what is most profitable, and they can't just 'raise' prices without paying the price.
He knows a lot of publishing but he doesn't know that Apple doesn't distribute content from other publishers like Amazon, Sony, Kobo, Audible, etc. They all distribute the content
Isn't Apple only distributing the app while the content is distributed by Amazon et al. I don't see any justification for a 30% cut if Apple is just processing the payment for the content.
My take is that since Amazon is not a publisher nor do they sell subscriptions it shouldn't affect them at all.
But I could be wrong.
There was a kindle app update this morning. No change as far as I can tell in purchasing books. You press 'Kindle Store' and Safari opens on the Kindle Store. There is no in app purchase option there.
So Kindle and Skype will probably leave.
Most people who buy Apple products are not of the mindset of the people on here - buyers of iPods are clearly not buyers of Macs, same with iPhones and iPads.
In some future date the buyer will go into a shop, ask for a tablet and the technically minded seller - a group often hostile to Apple - will suggest that they take a look at Android as all the books they bought on Kindle and Sony E-Books will not be available.
I don't suppose any of us can wait to see this in practice to make an informed decision of how it impacts us economically? I know that goes against the peculiar need to show others how smart we are, but it could be helpful.
I don't see how 'waiting and seeing' is helpful. Of course, making absurd conjectures can be destructive. But, just sitting around doing nothing isn't usually "helpful".
Once in a while AI gets a comment from someone who actually has real knowledge of the topic at hand. A know-it-well rather than a know-it-all like the rest of us.
My take is this whole brouhaha over the 30% is just a dance that Apple and the publishers have to go through as part of the negotiation process. Neither party really knows how much room the other has for price flexibility because it's a new way of doing business. In the end if 30% is really too high that the subscribers will walk away then Apple will offer secret discounts on a case-to-case basis. But we will never know how much a publisher is really paying Apple.
Not all industries are created equal and have the same margins.
Well, this proves he's not ailing too much if he's able to contribute to the press release?!
Or that he's a control freak.
Incorrect analogy, Apple is not distributing anything.
I agree they are not distributing, they are selling.It is no different than any other service - except I get it that you don't like how much they are charging for that service. Just like the folks that send me a huge package of magazine subscriptions (in the US one example is Publisher Clearing House). They may not be sending out every magazine but they are in fact selling subscriptions. Is this wrong too?
Don't buy it if it costs too much!
I agree they are not distributing, they are selling.It is no different than any other service - except I get it that you don't like how much they are charging for that service. Just like the folks that send me a huge package of magazine subscriptions (in the US one example is Publisher Clearing House). They may not be sending out every magazine but they are in fact selling subscriptions. Is this wrong too?
Don't buy it if it costs too much!
They were not selling, they have started to sell and forcing to put this option and disabling links to the browser to cut the 30%, so different.
Otherwise whats to stop someone from putting up a free app and then charging for subscription and not giving apple a dime and getting apple to host and market it.
And when you said apple isn't doing anything, thats wrong. They are hosting, marketing (being in the app store is marketing, believe it or not, and processing payment. All that does cost.
With all said and done maybe 30 percent is high for subscription. Maybe 20 or 15. But I dont know what the cost of processing payment and hosting all the content costs apple. But that cost should definitely be forwarded to the content provider.
And yes I do want to get my subscriptions all from iTunes and not have to worry about going to external sites and sharing my data with more companies. I would pay more for it. If they dont like it then they can not be on iTunes and I simply wont have their publication.
I disagree. 30% for nothing more than processing the payment and passing the data? If the person purchased within the app, the iTunes UI/browser wasn't used. Apple didn't perform any marketing to get the attention of the subscriber since they purchased it in, not via the iTunes UI.
I was hoping an iPad could replace the stack of magazines on my table, but I don't think that is going to happen anytime soon. Since Apple won't let the publisher charge less on their own web site, all subscription prices are going to be pushed higher due to Apple's policies. Online subscriptions, if available at all, will probably cost more than the print copy mailed to my door.
I agree they are not distributing, they are selling.It is no different than any other service - except I get it that you don't like how much they are charging for that service. Just like the folks that send me a huge package of magazine subscriptions (in the US one example is Publisher Clearing House). They may not be sending out every magazine but they are in fact selling subscriptions. Is this wrong too?
Don't buy it if it costs too much!
Its hardly semantics. Amazon ( or Sony) have the books on their server, they have bought the content rights, they can handle the credit card transaction themselves.
Apple, supplying none of this, is getting in the middle. By forcing the same price ( or better, lol) in the in App purchase the user is going to use the in-app purchase to renew.
BTW Apple could allow that button to be an link to the credit card transactions from Amazon, they already banned that with 11.2, this is new, it means the only button on your app is going to take 30% of your total price, meaning to need to have 43% margins. Nobody really has that.