It's not a concern if you understand how publishing works.
C.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot. I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable. If it was me in charge at Apple, I'd lower the subscription cut to 10% and be happy making my massive margins on the hardware.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot.
It is a legitimate concern, but I think it is unfounded.
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Originally Posted by Mr. H
If it was me in charge at Apple, I'd lower the subscription cut to 10%
I don't believe it is possible to maintain one rate for app sales and another for subscriptions and content. There'd be nothing to stop, for instance, a games company from giving away a free game, and selling subscriptions that unlock all the content.
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Originally Posted by Mr. H
I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable..
The pricing isn't based on credit card processing or the overheads associated with running a network. The pricing is based on what it is worth.
Publishers have always paid to gain access to market. In a physical retail store, this is typically 40 or 50%.
If you are trying to sell content, 30% is cheap. Certainly cheaper than trying to create your own platform.
Yes some publisher's will complain. It would be surprising if they didn't. But the loss of thirty percent per sale will be more than offset by a threefold increase in the size of the market.
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.
Really, I don't understand where Apple is coming from. They should be trying to make their platform as attractive as possible to app and content providers, within reason. I don't believe in running iTunes at a loss but breakeven is a good strategy when the margins on the hardware are so huge. Attractive platform for developers & content providers = attractive platform for potential customers = massive win when a new platform is being born and people who buy-in now are likely to remain with your platform due to effective lock-in thanks to different platforms having incompatible application runtime environments. More users choosing your platform then makes it even more attractive to others who haven't taken the plunge yet (as in: "hey, lots of people seem to be buying this iPad thing, what's that all about? Maybe I should check it out").
There'd be nothing to stop, for instance, a games company from giving away a free game, and selling subscriptions that unlock all the content.
No, nothing to stop them apart from Apple who vet all applications before they're allowed onto the app store. Regardless, If Apple don't host the content, they would still make money with their 10% cut of subscription content and would be able to cover the cost of hosting the app for free.
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.
There's nothing to stop publishers also using the free web-based path. You don't have to be inside the mall, you can set up a stall on the roadside.
The factor that will drive more and more content providers to the iPad, is the sheer size of the market, and the willingness of the customers to click the "buy" button.
Publishers, who think this is poor value for money, are free to set up their own platforms, or somehow channel content through the web. For many companies these options are much more expensive.
Speaking as a consumer, when presented with the option of dealing with a web-based interface, and typing my credit card details into yet another site, I tend to just pass.
That still does not leave room for profit. That 30% that Apple wasn't touching before. That was their profit.
No, it does not. The 30% is taken from publishers and not Amazon.
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It's a huge assumptions that publishers will accept Apple's iOS fees on Amazon as part of the delivery costs.
They accept it today for foreign sales channels.
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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.
Apple is offering 70% which appears fair for access to 160M+ customers. The comparison was to show that Apple's offering IS ethical.
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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 the cost to Amazon is part of the cost of leveraging someone else's ecosystem. This is not really different than the cost Amazon passes on to publishers for foreign book sales through foreign affiliates that take their own cut.
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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)?
iBooks is not a serious profit center for Apple, no more than iAds is. It is simply leverage to insure native content exists at some level on the Apple iOS ecosystem.
The margins on the iPad are healthy and the aggressive nature is to quickly grow the market and to capture share.
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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?
Because the total value of being on iOS is significant even if they have to take 10% and give publishers 60%. At no point is taking a loss a requirement to stay.
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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 goes away B&N will gain share. There will always be content distributors that want 160M potential customers in exchange for a 30% revenue share.
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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.
I outlined the business considerations that apply that differ between Amazon and B&N.
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And I suspect this is Apple's endgame. Can't compete with Amazon? Tax them out of the ecosystem.
Amazon can't afford not to be in the ecosystem. The risk is too high.
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As above.
No, not as above. You completely ignored the huge value of a 160M customer base.
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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.
No. They are saying that if you want access to an ecosystem with a 160M customers the revenue sharing rate is 30%.
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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.
And it is highly unlikely they will drop out. The economic and competitive value of access to 160M customers is large.
Seeing as people are not buying Kindle books through the Kindle app right now. What impulse buy numbers are you citing to support your claim?
As I've stated MULTIPLE TIMES in this thread, it is VERY safe to assume that All books currently purchased via the webapp portal on the current kindle app will be converted to IAP. For the average consumer,
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Along with iOS numbers you also would need the purchase numbers of every other device that people can use to consume Kindle services.
Why? Their purchase habits will not change. What's at issue here is how much money Amazon will LOSE to IAP and if it is a small enough number to justify keeping Kindle on the iOS platform. No, I don't have any "hard" numbers for this cost. I never claimed to. But that's not the issue here. See, anonymouse calls EVERYONE who disagrees with apple (on any point) a troll. He has since I've noticed him commenting. He's like a dog who's proud of himself because he knows how to play fetch so he never leaves anyone alone, constantly trying to poke them with sticks.
Let's look at what Amazon knows, shall we?
-Amazon pays $100 a year to apple to host their app (Call this Y)
-Amazon pays coders somewhere $X to maintain said app
-Amazon knows how many books are currently purchased through their webapp ($Z). This number will LARGELY convert over to IAP because there will be little change for the consumer. In fact, it may even be MORE convenient.
-"Q" would be the customers who would switch from using some other method to IAP because of iTunes gift cards, irrational privacy fears, and customer who sign up for Kindle put "impulse" buy apps using IAP.
-Amazon also knows which users have a registered iOS device, and how many books that customer purchases on and off the device, as well as which books are transferred to the iOS device later to be read (Call this $A). These are the users who consume kindle books, but largely purchase them on different platforms.
-"B" are the potential customers who sign up to kindle from iOS but do not purchase a majority of books through it.
So what amazon needs to do is: Figure out if Q+Y+X+Z+$100<(or equal to) A + B
Anonymouse and yourself are insisting that that Apples consumer base is so large that it's impossible to ignore. I'm saying that the MORE lucrative Apple's base is (the more they tend to purchase things) is a NEGATIVE working against apple in this regard. See, apple spent a ton of money fostering an ecosystem where people like purchasing things. This is one of the main reasons their app store is so popular with developers. The problem is, is that IAP feeds INTO that consumer mindset, which increases it's potential affect a lot more than you guys are giving it credit for.
And Anonymouse, no.. Amazon CANNOT just point a customer to their website to purchase the content. That's against the new rules. If they have content that is viewable on their iOS app it MUST be available for purchase on the iOS app using IAP and developers cannot provide a link OR any incentive to purchase elsewhere.
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Our argument is that by the very fact that there are far more device options than simply iOS for Kindle use. iOS by itself is a small percentage of the over all mobile device market. That its not plausible for iOS alone to destroy the entire Kindle business model.
We NEVER said it would. That's anonymouse's irrational fear mongering.
All I've said is that this change might make iOS no longer profitable for Kindle to maintain a presence on it. If, as you say, the kindle is such a small percentage of kindle users, then that makes dropping support for it MORE attractive.
Sure, you can try and argue that most people who consume kindle books on iOS don't purchase them from their device, but you have NO evidence to support this. Furthermore, the very existence of IAP and apple's STRICT rules about allowing people to provide alternative payment methods means that even APPLE doesn't think this.
If they did, they wouldn't make these rules. Well, maybe the require IAP part, but they wouldn't block customers from having the option to pay with their Amazon Gift Card instead.
Apple's move won't ruin kindle. It might make them pull Kindle from iOS, but that's it. Now, apple's move might ruin their OWN ecosystem. Not only will it make some of the big name developers start looking at alternative methods of delivery (HTML5 for example) but it is another move in a long string of precedents where Apple pulling the rug out from under the feet of developers.
-Removing apps it deems "Offensive"
-Blocking the use of third party app compilers (like CS5)
-Re-enabling the use of third party app compilers
-IAP.
Now, you can argue if some (or all) of those changes were good for the consumer in the end if you wish. The point is that companies like stability. Yes, they also like making money, but changing app submission policy (seemingly on a whim) will make them reconsider their investment and seek more stable, possibly more profitable alternatives.(like HTML5)
As for NHT: You keep going back to the fact that it's Apple's "Ecosystem" and that they can hold their customers hostage, charging insane fees (30% is HIGH. You can't compare what Apple is doing to what Amazon does. Amazon handles all the backend distribution and licensing, Apple does none of this) to companies who want to offer THEIR customers access to content on the CUSTOMERS devices.
You'll most likely try to compare what Apple is doing to what Microsoft does with the x360. Sorry, different products. The web is going mobile. People are increasingly switching to using their phones/tablets as PRIMARY consumption mediums, like the used the PC in the past decade. Does Apple take a 30% cut everytime someone buys software for their macbook? Does HP/Windows get a cut on EVERY SINGLE software sale? That's what you need to compare this move to.
The App store IS an ecosystem, the iPhone, iPad, and iPod touch are NOT. They're PLATFORMS like a PC or a Mac. Apple made it so that the only way to get on those platforms was through their app store (they could do this because the shift wasn't happening yet) and companies played along because like you said, that's a lot of potential customers. But now Apple's trying to take a piece of the pie for no other reason than they will not allow those providers ANY other point of entry save the browser (which most are weary to do because of DRM issues)
Amazon isn't using Apple's servers to distribute content, they're "leeching" off of Apple's app discovery in the store with the exception of the initial app which they ALREADY pay apple for. Should they pay more since they're "competing" with Apple's native offerings? Maybe. But that's not a Tax issue, that's a RENT issue.
Before you get your blood pressure up. Please see the post below where I accepted your rationale.
Not really. You simply reiterated that Amazon ends up with 0% profit later on again.
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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.
And yet you continued to characterize Apple's move as pricing out competition and unethical.
That doesn't strike me as an open mind as opposed to an extreme bias.
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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.
When reasonable scenarios and arguments are continually ignored there isn't a reasonable discussion.
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...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?
Yes, because anyone looking at Amazon's practices when the Kindle was launched would have understood Kindle was a power play to dominate the ebook market and lock in users exclusively into their ecosystem. Did you need to predict the launch of the iPad to know that this is a bad idea for consumers? No.
What were some of those indicators? Creating a new format and DRM when they already had one to lock out older users. Purchasing Stanza and killing support for other DRM formats. Hardball negotiations with publishers that were highlighted in senate hearings.
Anything Amazon has done to loosen their tight hold on the ebook market has been pretty much because Apple entered the market with the iPad. What the consumer didn't do by voting with their wallet Apple did for them...in their own interests of course but typically their interests are aligned with a better experience for everyone in their ecosystem...users, vendors, developers, etc.
Why? Their purchase habits will not change. What's at issue here is how much money Amazon will LOSE to IAP
Very little. This is Amazon we're talking about here. The cost will be passed along to the actual content owner.
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Let's look at what Amazon knows, shall we?
-Amazon pays $100 a year to apple to host their app (Call this Y)
Effectively 0. It doesn't even deserve a spot on the equation since it is in the noise.
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-Amazon pays coders somewhere $X to maintain said app
Essentially 0.
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-Amazon knows how many books are currently purchased through their webapp ($Z). This number will LARGELY convert over to IAP because there will be little change for the consumer. In fact, it may even be MORE convenient.
-"Q" would be the customers who would switch from using some other method to IAP because of iTunes gift cards, irrational privacy fears, and customer who sign up for Kindle put "impulse" buy apps using IAP.
-Amazon also knows which users have a registered iOS device, and how many books that customer purchases on and off the device, as well as which books are transferred to the iOS device later to be read (Call this $A). These are the users who consume kindle books, but largely purchase them on different platforms.
-"B" are the potential customers who sign up to kindle from iOS but do not purchase a majority of books through it.
So what amazon needs to do is: Figure out if Q+Y+X+Z+$100<(or equal to) A + B
You are completely disregarding the value of buy once and read anywhere.
Again, even if the ratio was 30% apple, 60% publisher and 10% Amazon they still makes a profit and remaining on iOS is a huge benefit to the Kindle ecosystem.
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Anonymouse and yourself are insisting that that Apples consumer base is so large that it's impossible to ignore. I'm saying that the MORE lucrative Apple's base is (the more they tend to purchase things) is a NEGATIVE working against apple in this regard.
Completely false. They will either share the cost with the publisher or dump the entire cost on the publisher.
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All I've said is that this change might make iOS no longer profitable for Kindle to maintain a presence on it. If, as you say, the kindle is such a small percentage of kindle users, then that makes dropping support for it MORE attractive.
Which would be absolutely wonderful for everyone who likes ebooks. Because then the kindle format loses market share and the ePub + Adobe DRM gains market share (Nook, Sony, others).
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Apple's move won't ruin kindle. It might make them pull Kindle from iOS, but that's it. Now, apple's move might ruin their OWN ecosystem. Not only will it make some of the big name developers start looking at alternative methods of delivery (HTML5 for example) but it is another move in a long string of precedents where Apple pulling the rug out from under the feet of developers.
HTML5 is a non-starter. Connectivity is not always available. Only netflix and other streaming services have this option.
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The point is that companies like stability. Yes, they also like making money, but changing app submission policy (seemingly on a whim) will make them reconsider their investment and seek more stable, possibly more profitable alternatives.(like HTML5)
For large companies the cost of building an app is low in comparison to their revenue stream. It's pretty much a zero cost even if the number is in the six digits.
Not really. You simply reiterated that Amazon ends up with 0% profit later on again.
Which they will (for any books purchased under IAP using the Agency model) Publishers have other alternatives to get their content onto iOS devices. I don't see them taking another 30% cut to their profits "just because"
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And yet you continued to characterize Apple's move as pricing out competition and unethical.
That doesn't strike me as an open mind as opposed to an extreme bias.
if ANY other company attempted this (charging a tax to access their customers when they offered DIRECT competition) AI, you and Anonymouse would be SCREAMING about how it's unethical.
Imagine if it was Google forcing their onepass system on content providers, or microsoft suddenly wanting a piece of the pie for EVERY piece of software sold that was compatible with their computers? People would be screaming. There wouldn't be a single tech site or blogger that even ATTEMPTED to justify it. Yet since it's apple, people are falling over themselves trying to justify it.
Yes, I am biased. I've explained why in the past. But so are you, and doubly so because you pretend you aren't. You write everyone who disagrees with this move as a troll, even when it's DEVELOPERS of apps for iOS. (Readability, Instapaper, etc)
How is it possible to have a rational discussion with you when you're so set on defending a multi BILLION dollar company that you write off any and all concerns as pointless?
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When reasonable scenarios and arguments are continually ignored there isn't a reasonable discussion.
That would only work if you and anonymouse attempted reasonable discussion before resorting to calling dissenters trolls. You don't.
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Yes, because anyone looking at Amazon's practices when the Kindle was launched would have understood Kindle was a power play to dominate the ebook market and lock in users exclusively into their ecosystem. Did you need to predict the launch of the iPad to know that this is a bad idea for consumers? No.
What were some of those indicators? Creating a new format and DRM when they already had one to lock out older users. Purchasing Stanza and killing support for other DRM formats. Hardball negotiations with publishers that were highlighted in senate hearings.
Anything Amazon has done to loosen their tight hold on the ebook market has been pretty much because Apple entered the market with the iPad. What the consumer didn't do by voting with their wallet Apple did for them...in their own interests of course but typically their interests are aligned with a better experience for everyone in their ecosystem...users, vendors, developers, etc.
So Apple pulls a power play and it's justified because it makes for a "better experience." Any other company tries it and it's evil and solely for greed and doesn't align with anyone else's experience. Got it.
I maybe misinterpreting things but I take it that Amazon pays out 70% to their content providers. If you know different, please do share.
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.
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.
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).
You had me right up to the end. You can just as easily look at it as developers screwing over Apple. Amazon and others want to expand out their user base, they should have to pay for that.
Which they will (for any books purchased under IAP using the Agency model) Publishers have other alternatives to get their content onto iOS devices. I don't see them taking another 30% cut to their profits "just because"
In this context Amazon is just a publisher.
In the real world publishers don't pay out royalties on the basis of retail price. They pay royalties based on net-receipts.
In other words they pay out royalties as a proportion of the revenue that they receive. In fact many publishers love to add in little extras. (The cost of marketing, the cost of storing the inventory, and the hotel porn at the last trade show.) Anything to make their share bigger and the royalty recipient's share smaller. Hollywood gives masterclasses in this black art.
They then finally decide upon a figure that represents their "revenue", and it is a proportion of this figure that is handed out as royalties.
They do it this way to protect themselves from an absurd possibility. The possibility of paying out more money in royalties than they receive. Any publisher who did that would be clinically insane. Any publisher who did this would be thrown out of the publisher guild. Have his latte thrown in his face, his mistress taken away and his Rolex stamped upon.
Amazon will simply make a tiny change to their publishing agreement. A change, which they have probably been anticipating for quite a while.
And while it is true that their iPad revenues will fall by 30% (per sale) their iPad COSTS will fall by 30% too. Amazon's tears will be short-lived, because the iPad is set to triple in size next year. So their 30% fall in revenue will be compensated by an increase in volume. I would not be surprised if this caused them to reduce prices further.
Which they will (for any books purchased under IAP using the Agency model) Publishers have other alternatives to get their content onto iOS devices. I don't see them taking another 30% cut to their profits "just because"
Again...they do that today for foreign sales where there is another middleman. Their cut is 35% for foreign sales and not 70%.
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if ANY other company attempted this (charging a tax to access their customers when they offered DIRECT competition) AI, you and Anonymouse would be SCREAMING about how it's unethical.
Except Apple is doing no such thing. They are reiterating that access to the iOS ecosystem is on a revenue sharing basis whether you are a competitor or not.
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Imagine if it was Google forcing their onepass system on content providers,
Google has policies that govern the access to their eyeballs for advertising and how and what they pay for eyeball providers.
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microsoft suddenly wanting a piece of the pie for EVERY piece of software sold that was compatible with their computers?
They don't make computers. Folks that make computers do sell and ask for money (a piece of the pie) for all software that is added to their systems (your typical junk apps). Those companies are glad to pay for access.
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Yes, I am biased. I've explained why in the past. But so are you, and doubly so because you pretend you aren't. You write everyone who disagrees with this move as a troll, even when it's DEVELOPERS of apps for iOS. (Readability, Instapaper, etc)
Some developers with a specific business case. Not all developers, not most developers and not even many developers.
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How is it possible to have a rational discussion with you when you're so set on defending a multi BILLION dollar company that you write off any and all concerns as pointless?
So why are you so vociferously defending Amazon? Why do you care?
There can be no rational discussion with trolls. You can only refute their incorrect assumptions and assertions. Such as Amazon cannot make money if Apple takes 30%. They can and will. They have the market power to demand that publishers take the hit...the entire hit if necessary. Publishers will pay Amazon for the same reason Amazon will pay Apple. Middlemen provide far wider access to potential customers than most individuals and companies can get on their own.
Apple provides access to 160+M iOS users. Amazon provides access to 10s of millions of Kindle users and hundreds of million Amazon web users for physical media.
This is why you will never be able to eliminate the middleman. They actually DO provide a valuable and necessary service to the content producers.
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So Apple pulls a power play and it's justified because it makes for a "better experience." Any other company tries it and it's evil and solely for greed and doesn't align with anyone else's experience. Got it.
Apple is trying to dominate the tablet market as they did the mp3 player market. However, this isn't part of that play and is actually in opposition to that goal. They have no ambitions in dominating the ebook market...or if they do they are making none of the moves required to do so.
In any case these moves, regardless of intent, should result in a better user experience for users, content producers and developers. I don't care WHY they do something as much as WHAT the outcome is. This is true for Amazon, Apple, IBM, Microsoft, whomever. If the end result if more competition, I'm typically for it.
Apple's objective here is to insure that folks understand that access to the iOS ecosystem is valuable and that the going rate is 30% revenue sharing unless you are some kind of strategic partner with Apple. They are also making the point that folks with competing ecosystems have to pay to leverage the iOS ecosystem and not expect a free ride.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot. I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable. If it was me in charge at Apple, I'd lower the subscription cut to 10% and be happy making my massive margins on the hardware.
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.
All hail the power of the mod. Amazing how you don't get called a troll for making similar arguments to mine...
Trollish statements are not ones of disagreement but rather stated in a way to be partisan and inflammatory.
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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.
You never just offer straight viewers as a subscription content reseller.
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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.
Nothing harsh about it because you can't be partly in. Either your app is available in iOS or not. Unless you offer corresponding value to Apple to offset Apple's offer of value then the retail cost for access is always 30%.
Access to iOS is always a benefit to the developer of the app or the developer wouldn't bother except in the case of genuinely free apps.
Netflix providing iOS streaming to their customers provides Netflix competitive advantages to competitors that don't provide iOS streaming to their customers. Whether they charge $0 or $4.99 for their streaming app is immaterial. It is a significant competitive advantage.
Fortunately for Netflix it has something Apple wants. So it can trade value for value in a non-monetary way if agreeable to all parties.
Amazon has things to trade too but probably not ones Apple is all that interested in getting or Amazon is interested in providing: access for iBooks on the Kindle ecosystem.
Well, since you've officially approved this discussion on this topic a lot of the regulars around here are fed up with having to reply over and over again to the same dishonest FUD that's been debunked since the beginning of the thread, or in reality, several threads. I guess we can call the people who, from their history, are blatant Apple bashers and from posts in the current thread where they have argued both sides of the issue with the very obvious purpose of stirring up anger and fear anything you like, but we can't really pretend their are here with honest intent to engage in meaningful discussion to arrive at the truth.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot. I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable. If it was me in charge at Apple, I'd lower the subscription cut to 10% and be happy making my massive margins on the hardware.
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 when they signed the developer agreement. I don't understand why everyone keeps evaluating this in a fee for services context when it's all about the revenue sharing that the developers agreed to do.
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, and the few, most likely, small and honest developers who don't cheat on their agreement end up subsidizing Amazon's app distribution.
And there is absolutely no reason to think that this will be anything but good for the consumer. 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.
As far as how this affects other apps and companies, it doesn't affect, for example, companies like Dropbox at all because they aren't selling in-app content. How much it will affect other companies is unknown, but the, "all their profits will go to Apple and they'll leave iOS," crowd are using false and misleading numbers and assumptions to make that case. Any time you find people doing that you can be sure their objective is not the truth, and this case is no different. Unfortunately, far too many people have gotten caught up in the panic these people are trying, and succeeding, to create.
Kindle isn't going anywhere, and people can put forth all the false numbers and assumptions they want to try to prove it will, but their proofs are worth what their evidence is, which is nothing. Amazon not only isn't going to lose money on iOS users, it isn't going to lose money on IAPs.
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.) It's an emotional topic and panic is in some part understandable, but it's just not going to happen and it would be the beginning of the decline of Amazon if they allowed it to. They'll still make plenty of money on eBooks and iOS users, so we don't need to be crying a river for them just yet.
The bigger issue that people's fears ought to be driving them to look at, the actual source of their fears, is the problem of proprietary DRM. If it weren't for proprietary DRM, no one would even care if Amazon disappeared off the face of the earth. The fact that the presence of this proprietary DRM, with the potential to render one's eBooks useless ought to be the the real point people focus their concern on here.
.. Anonymouse and yourself are insisting... And Anonymouse, no.. Amazon CANNOT ... That's anonymouse's irrational fear mongering. ...
I don't appreciate having words put in my mouth and what I've said being completely misrepresented. One of us is dishonestly fear mongering, but it's not me.
Comments
It's not a concern if you understand how publishing works.
C.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot. I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable. If it was me in charge at Apple, I'd lower the subscription cut to 10% and be happy making my massive margins on the hardware.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot.
It is a legitimate concern, but I think it is unfounded.
If it was me in charge at Apple, I'd lower the subscription cut to 10%
I don't believe it is possible to maintain one rate for app sales and another for subscriptions and content. There'd be nothing to stop, for instance, a games company from giving away a free game, and selling subscriptions that unlock all the content.
I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable..
The pricing isn't based on credit card processing or the overheads associated with running a network. The pricing is based on what it is worth.
Publishers have always paid to gain access to market. In a physical retail store, this is typically 40 or 50%.
If you are trying to sell content, 30% is cheap. Certainly cheaper than trying to create your own platform.
Yes some publisher's will complain. It would be surprising if they didn't. But the loss of thirty percent per sale will be more than offset by a threefold increase in the size of the market.
C.
If you are trying to sell content, 30% is cheap.
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.
Really, I don't understand where Apple is coming from. They should be trying to make their platform as attractive as possible to app and content providers, within reason. I don't believe in running iTunes at a loss but breakeven is a good strategy when the margins on the hardware are so huge. Attractive platform for developers & content providers = attractive platform for potential customers = massive win when a new platform is being born and people who buy-in now are likely to remain with your platform due to effective lock-in thanks to different platforms having incompatible application runtime environments. More users choosing your platform then makes it even more attractive to others who haven't taken the plunge yet (as in: "hey, lots of people seem to be buying this iPad thing, what's that all about? Maybe I should check it out").
There'd be nothing to stop, for instance, a games company from giving away a free game, and selling subscriptions that unlock all the content.
No, nothing to stop them apart from Apple who vet all applications before they're allowed onto the app store. Regardless, If Apple don't host the content, they would still make money with their 10% cut of subscription content and would be able to cover the cost of hosting the app for free.
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.
There's nothing to stop publishers also using the free web-based path. You don't have to be inside the mall, you can set up a stall on the roadside.
The factor that will drive more and more content providers to the iPad, is the sheer size of the market, and the willingness of the customers to click the "buy" button.
Publishers, who think this is poor value for money, are free to set up their own platforms, or somehow channel content through the web. For many companies these options are much more expensive.
Speaking as a consumer, when presented with the option of dealing with a web-based interface, and typing my credit card details into yet another site, I tend to just pass.
C.
That still does not leave room for profit. That 30% that Apple wasn't touching before. That was their profit.
No, it does not. The 30% is taken from publishers and not Amazon.
It's a huge assumptions that publishers will accept Apple's iOS fees on Amazon as part of the delivery costs.
They accept it today for foreign sales channels.
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.
Apple is offering 70% which appears fair for access to 160M+ customers. The comparison was to show that Apple's offering IS ethical.
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 the cost to Amazon is part of the cost of leveraging someone else's ecosystem. This is not really different than the cost Amazon passes on to publishers for foreign book sales through foreign affiliates that take their own cut.
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)?
iBooks is not a serious profit center for Apple, no more than iAds is. It is simply leverage to insure native content exists at some level on the Apple iOS ecosystem.
The margins on the iPad are healthy and the aggressive nature is to quickly grow the market and to capture share.
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?
Because the total value of being on iOS is significant even if they have to take 10% and give publishers 60%. At no point is taking a loss a requirement to stay.
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 goes away B&N will gain share. There will always be content distributors that want 160M potential customers in exchange for a 30% revenue share.
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.
I outlined the business considerations that apply that differ between Amazon and B&N.
And I suspect this is Apple's endgame. Can't compete with Amazon? Tax them out of the ecosystem.
Amazon can't afford not to be in the ecosystem. The risk is too high.
As above.
No, not as above. You completely ignored the huge value of a 160M customer base.
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.
No. They are saying that if you want access to an ecosystem with a 160M customers the revenue sharing rate is 30%.
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.
And it is highly unlikely they will drop out. The economic and competitive value of access to 160M customers is large.
Seeing as people are not buying Kindle books through the Kindle app right now. What impulse buy numbers are you citing to support your claim?
As I've stated MULTIPLE TIMES in this thread, it is VERY safe to assume that All books currently purchased via the webapp portal on the current kindle app will be converted to IAP. For the average consumer,
Along with iOS numbers you also would need the purchase numbers of every other device that people can use to consume Kindle services.
Why? Their purchase habits will not change. What's at issue here is how much money Amazon will LOSE to IAP and if it is a small enough number to justify keeping Kindle on the iOS platform. No, I don't have any "hard" numbers for this cost. I never claimed to. But that's not the issue here. See, anonymouse calls EVERYONE who disagrees with apple (on any point) a troll. He has since I've noticed him commenting. He's like a dog who's proud of himself because he knows how to play fetch so he never leaves anyone alone, constantly trying to poke them with sticks.
Let's look at what Amazon knows, shall we?
-Amazon pays $100 a year to apple to host their app (Call this Y)
-Amazon pays coders somewhere $X to maintain said app
-Amazon knows how many books are currently purchased through their webapp ($Z). This number will LARGELY convert over to IAP because there will be little change for the consumer. In fact, it may even be MORE convenient.
-"Q" would be the customers who would switch from using some other method to IAP because of iTunes gift cards, irrational privacy fears, and customer who sign up for Kindle put "impulse" buy apps using IAP.
-Amazon also knows which users have a registered iOS device, and how many books that customer purchases on and off the device, as well as which books are transferred to the iOS device later to be read (Call this $A). These are the users who consume kindle books, but largely purchase them on different platforms.
-"B" are the potential customers who sign up to kindle from iOS but do not purchase a majority of books through it.
So what amazon needs to do is: Figure out if Q+Y+X+Z+$100<(or equal to) A + B
Anonymouse and yourself are insisting that that Apples consumer base is so large that it's impossible to ignore. I'm saying that the MORE lucrative Apple's base is (the more they tend to purchase things) is a NEGATIVE working against apple in this regard. See, apple spent a ton of money fostering an ecosystem where people like purchasing things. This is one of the main reasons their app store is so popular with developers. The problem is, is that IAP feeds INTO that consumer mindset, which increases it's potential affect a lot more than you guys are giving it credit for.
And Anonymouse, no.. Amazon CANNOT just point a customer to their website to purchase the content. That's against the new rules. If they have content that is viewable on their iOS app it MUST be available for purchase on the iOS app using IAP and developers cannot provide a link OR any incentive to purchase elsewhere.
Our argument is that by the very fact that there are far more device options than simply iOS for Kindle use. iOS by itself is a small percentage of the over all mobile device market. That its not plausible for iOS alone to destroy the entire Kindle business model.
We NEVER said it would. That's anonymouse's irrational fear mongering.
All I've said is that this change might make iOS no longer profitable for Kindle to maintain a presence on it. If, as you say, the kindle is such a small percentage of kindle users, then that makes dropping support for it MORE attractive.
Sure, you can try and argue that most people who consume kindle books on iOS don't purchase them from their device, but you have NO evidence to support this. Furthermore, the very existence of IAP and apple's STRICT rules about allowing people to provide alternative payment methods means that even APPLE doesn't think this.
If they did, they wouldn't make these rules. Well, maybe the require IAP part, but they wouldn't block customers from having the option to pay with their Amazon Gift Card instead.
Apple's move won't ruin kindle. It might make them pull Kindle from iOS, but that's it. Now, apple's move might ruin their OWN ecosystem. Not only will it make some of the big name developers start looking at alternative methods of delivery (HTML5 for example) but it is another move in a long string of precedents where Apple pulling the rug out from under the feet of developers.
-Removing apps it deems "Offensive"
-Blocking the use of third party app compilers (like CS5)
-Re-enabling the use of third party app compilers
-IAP.
Now, you can argue if some (or all) of those changes were good for the consumer in the end if you wish. The point is that companies like stability. Yes, they also like making money, but changing app submission policy (seemingly on a whim) will make them reconsider their investment and seek more stable, possibly more profitable alternatives.(like HTML5)
As for NHT: You keep going back to the fact that it's Apple's "Ecosystem" and that they can hold their customers hostage, charging insane fees (30% is HIGH. You can't compare what Apple is doing to what Amazon does. Amazon handles all the backend distribution and licensing, Apple does none of this) to companies who want to offer THEIR customers access to content on the CUSTOMERS devices.
You'll most likely try to compare what Apple is doing to what Microsoft does with the x360. Sorry, different products. The web is going mobile. People are increasingly switching to using their phones/tablets as PRIMARY consumption mediums, like the used the PC in the past decade. Does Apple take a 30% cut everytime someone buys software for their macbook? Does HP/Windows get a cut on EVERY SINGLE software sale? That's what you need to compare this move to.
The App store IS an ecosystem, the iPhone, iPad, and iPod touch are NOT. They're PLATFORMS like a PC or a Mac. Apple made it so that the only way to get on those platforms was through their app store (they could do this because the shift wasn't happening yet) and companies played along because like you said, that's a lot of potential customers. But now Apple's trying to take a piece of the pie for no other reason than they will not allow those providers ANY other point of entry save the browser (which most are weary to do because of DRM issues)
Amazon isn't using Apple's servers to distribute content, they're "leeching" off of Apple's app discovery in the store with the exception of the initial app which they ALREADY pay apple for. Should they pay more since they're "competing" with Apple's native offerings? Maybe. But that's not a Tax issue, that's a RENT issue.
Before you get your blood pressure up. Please see the post below where I accepted your rationale.
Not really. You simply reiterated that Amazon ends up with 0% profit later on again.
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.
And yet you continued to characterize Apple's move as pricing out competition and unethical.
That doesn't strike me as an open mind as opposed to an extreme bias.
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.
When reasonable scenarios and arguments are continually ignored there isn't a reasonable discussion.
...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?
Yes, because anyone looking at Amazon's practices when the Kindle was launched would have understood Kindle was a power play to dominate the ebook market and lock in users exclusively into their ecosystem. Did you need to predict the launch of the iPad to know that this is a bad idea for consumers? No.
What were some of those indicators? Creating a new format and DRM when they already had one to lock out older users. Purchasing Stanza and killing support for other DRM formats. Hardball negotiations with publishers that were highlighted in senate hearings.
Anything Amazon has done to loosen their tight hold on the ebook market has been pretty much because Apple entered the market with the iPad. What the consumer didn't do by voting with their wallet Apple did for them...in their own interests of course but typically their interests are aligned with a better experience for everyone in their ecosystem...users, vendors, developers, etc.
Why? Their purchase habits will not change. What's at issue here is how much money Amazon will LOSE to IAP
Very little. This is Amazon we're talking about here. The cost will be passed along to the actual content owner.
Let's look at what Amazon knows, shall we?
-Amazon pays $100 a year to apple to host their app (Call this Y)
Effectively 0. It doesn't even deserve a spot on the equation since it is in the noise.
-Amazon pays coders somewhere $X to maintain said app
Essentially 0.
-Amazon knows how many books are currently purchased through their webapp ($Z). This number will LARGELY convert over to IAP because there will be little change for the consumer. In fact, it may even be MORE convenient.
-"Q" would be the customers who would switch from using some other method to IAP because of iTunes gift cards, irrational privacy fears, and customer who sign up for Kindle put "impulse" buy apps using IAP.
-Amazon also knows which users have a registered iOS device, and how many books that customer purchases on and off the device, as well as which books are transferred to the iOS device later to be read (Call this $A). These are the users who consume kindle books, but largely purchase them on different platforms.
-"B" are the potential customers who sign up to kindle from iOS but do not purchase a majority of books through it.
So what amazon needs to do is: Figure out if Q+Y+X+Z+$100<(or equal to) A + B
You are completely disregarding the value of buy once and read anywhere.
Again, even if the ratio was 30% apple, 60% publisher and 10% Amazon they still makes a profit and remaining on iOS is a huge benefit to the Kindle ecosystem.
Anonymouse and yourself are insisting that that Apples consumer base is so large that it's impossible to ignore. I'm saying that the MORE lucrative Apple's base is (the more they tend to purchase things) is a NEGATIVE working against apple in this regard.
Completely false. They will either share the cost with the publisher or dump the entire cost on the publisher.
All I've said is that this change might make iOS no longer profitable for Kindle to maintain a presence on it. If, as you say, the kindle is such a small percentage of kindle users, then that makes dropping support for it MORE attractive.
Which would be absolutely wonderful for everyone who likes ebooks. Because then the kindle format loses market share and the ePub + Adobe DRM gains market share (Nook, Sony, others).
Apple's move won't ruin kindle. It might make them pull Kindle from iOS, but that's it. Now, apple's move might ruin their OWN ecosystem. Not only will it make some of the big name developers start looking at alternative methods of delivery (HTML5 for example) but it is another move in a long string of precedents where Apple pulling the rug out from under the feet of developers.
HTML5 is a non-starter. Connectivity is not always available. Only netflix and other streaming services have this option.
The point is that companies like stability. Yes, they also like making money, but changing app submission policy (seemingly on a whim) will make them reconsider their investment and seek more stable, possibly more profitable alternatives.(like HTML5)
For large companies the cost of building an app is low in comparison to their revenue stream. It's pretty much a zero cost even if the number is in the six digits.
Not really. You simply reiterated that Amazon ends up with 0% profit later on again.
Which they will (for any books purchased under IAP using the Agency model) Publishers have other alternatives to get their content onto iOS devices. I don't see them taking another 30% cut to their profits "just because"
And yet you continued to characterize Apple's move as pricing out competition and unethical.
That doesn't strike me as an open mind as opposed to an extreme bias.
if ANY other company attempted this (charging a tax to access their customers when they offered DIRECT competition) AI, you and Anonymouse would be SCREAMING about how it's unethical.
Imagine if it was Google forcing their onepass system on content providers, or microsoft suddenly wanting a piece of the pie for EVERY piece of software sold that was compatible with their computers? People would be screaming. There wouldn't be a single tech site or blogger that even ATTEMPTED to justify it. Yet since it's apple, people are falling over themselves trying to justify it.
Yes, I am biased. I've explained why in the past. But so are you, and doubly so because you pretend you aren't. You write everyone who disagrees with this move as a troll, even when it's DEVELOPERS of apps for iOS. (Readability, Instapaper, etc)
How is it possible to have a rational discussion with you when you're so set on defending a multi BILLION dollar company that you write off any and all concerns as pointless?
When reasonable scenarios and arguments are continually ignored there isn't a reasonable discussion.
That would only work if you and anonymouse attempted reasonable discussion before resorting to calling dissenters trolls. You don't.
Yes, because anyone looking at Amazon's practices when the Kindle was launched would have understood Kindle was a power play to dominate the ebook market and lock in users exclusively into their ecosystem. Did you need to predict the launch of the iPad to know that this is a bad idea for consumers? No.
What were some of those indicators? Creating a new format and DRM when they already had one to lock out older users. Purchasing Stanza and killing support for other DRM formats. Hardball negotiations with publishers that were highlighted in senate hearings.
Anything Amazon has done to loosen their tight hold on the ebook market has been pretty much because Apple entered the market with the iPad. What the consumer didn't do by voting with their wallet Apple did for them...in their own interests of course but typically their interests are aligned with a better experience for everyone in their ecosystem...users, vendors, developers, etc.
So Apple pulls a power play and it's justified because it makes for a "better experience." Any other company tries it and it's evil and solely for greed and doesn't align with anyone else's experience. Got it.
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.
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.
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.
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).
You had me right up to the end. You can just as easily look at it as developers screwing over Apple. Amazon and others want to expand out their user base, they should have to pay for that.
Which they will (for any books purchased under IAP using the Agency model) Publishers have other alternatives to get their content onto iOS devices. I don't see them taking another 30% cut to their profits "just because"
In this context Amazon is just a publisher.
In the real world publishers don't pay out royalties on the basis of retail price. They pay royalties based on net-receipts.
In other words they pay out royalties as a proportion of the revenue that they receive. In fact many publishers love to add in little extras. (The cost of marketing, the cost of storing the inventory, and the hotel porn at the last trade show.) Anything to make their share bigger and the royalty recipient's share smaller. Hollywood gives masterclasses in this black art.
They then finally decide upon a figure that represents their "revenue", and it is a proportion of this figure that is handed out as royalties.
They do it this way to protect themselves from an absurd possibility. The possibility of paying out more money in royalties than they receive. Any publisher who did that would be clinically insane. Any publisher who did this would be thrown out of the publisher guild. Have his latte thrown in his face, his mistress taken away and his Rolex stamped upon.
Amazon will simply make a tiny change to their publishing agreement. A change, which they have probably been anticipating for quite a while.
And while it is true that their iPad revenues will fall by 30% (per sale) their iPad COSTS will fall by 30% too. Amazon's tears will be short-lived, because the iPad is set to triple in size next year. So their 30% fall in revenue will be compensated by an increase in volume. I would not be surprised if this caused them to reduce prices further.
This "sky is falling" stuff is quite tiresome.
C.
Which they will (for any books purchased under IAP using the Agency model) Publishers have other alternatives to get their content onto iOS devices. I don't see them taking another 30% cut to their profits "just because"
Again...they do that today for foreign sales where there is another middleman. Their cut is 35% for foreign sales and not 70%.
if ANY other company attempted this (charging a tax to access their customers when they offered DIRECT competition) AI, you and Anonymouse would be SCREAMING about how it's unethical.
Except Apple is doing no such thing. They are reiterating that access to the iOS ecosystem is on a revenue sharing basis whether you are a competitor or not.
Imagine if it was Google forcing their onepass system on content providers,
Google has policies that govern the access to their eyeballs for advertising and how and what they pay for eyeball providers.
microsoft suddenly wanting a piece of the pie for EVERY piece of software sold that was compatible with their computers?
They don't make computers. Folks that make computers do sell and ask for money (a piece of the pie) for all software that is added to their systems (your typical junk apps). Those companies are glad to pay for access.
Yes, I am biased. I've explained why in the past. But so are you, and doubly so because you pretend you aren't. You write everyone who disagrees with this move as a troll, even when it's DEVELOPERS of apps for iOS. (Readability, Instapaper, etc)
Some developers with a specific business case. Not all developers, not most developers and not even many developers.
How is it possible to have a rational discussion with you when you're so set on defending a multi BILLION dollar company that you write off any and all concerns as pointless?
So why are you so vociferously defending Amazon? Why do you care?
There can be no rational discussion with trolls. You can only refute their incorrect assumptions and assertions. Such as Amazon cannot make money if Apple takes 30%. They can and will. They have the market power to demand that publishers take the hit...the entire hit if necessary. Publishers will pay Amazon for the same reason Amazon will pay Apple. Middlemen provide far wider access to potential customers than most individuals and companies can get on their own.
Apple provides access to 160+M iOS users. Amazon provides access to 10s of millions of Kindle users and hundreds of million Amazon web users for physical media.
This is why you will never be able to eliminate the middleman. They actually DO provide a valuable and necessary service to the content producers.
So Apple pulls a power play and it's justified because it makes for a "better experience." Any other company tries it and it's evil and solely for greed and doesn't align with anyone else's experience. Got it.
Apple is trying to dominate the tablet market as they did the mp3 player market. However, this isn't part of that play and is actually in opposition to that goal. They have no ambitions in dominating the ebook market...or if they do they are making none of the moves required to do so.
In any case these moves, regardless of intent, should result in a better user experience for users, content producers and developers. I don't care WHY they do something as much as WHAT the outcome is. This is true for Amazon, Apple, IBM, Microsoft, whomever. If the end result if more competition, I'm typically for it.
Apple's objective here is to insure that folks understand that access to the iOS ecosystem is valuable and that the going rate is 30% revenue sharing unless you are some kind of strategic partner with Apple. They are also making the point that folks with competing ecosystems have to pay to leverage the iOS ecosystem and not expect a free ride.
Imagine if microsoft suddenly wanting a piece of the pie for EVERY piece of software sold that was compatible with their computers?
Hello?
XBox.
C.
Hello?
XBox.
C.
Ah right. That is as much a computer as an iPad. You know, I've always wondered why they never released MS Office Student for the XBox.
Actually I do know...Dell, HP, et al would be screaming bloody murder. Eh, maybe not if the Windows Home Server thing had taken off.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot. I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable. If it was me in charge at Apple, I'd lower the subscription cut to 10% and be happy making my massive margins on the hardware.
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.
All hail the power of the mod. Amazing how you don't get called a troll for making similar arguments to mine...
Trollish statements are not ones of disagreement but rather stated in a way to be partisan and inflammatory.
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.
You never just offer straight viewers as a subscription content reseller.
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.
Nothing harsh about it because you can't be partly in. Either your app is available in iOS or not. Unless you offer corresponding value to Apple to offset Apple's offer of value then the retail cost for access is always 30%.
Access to iOS is always a benefit to the developer of the app or the developer wouldn't bother except in the case of genuinely free apps.
Netflix providing iOS streaming to their customers provides Netflix competitive advantages to competitors that don't provide iOS streaming to their customers. Whether they charge $0 or $4.99 for their streaming app is immaterial. It is a significant competitive advantage.
Fortunately for Netflix it has something Apple wants. So it can trade value for value in a non-monetary way if agreeable to all parties.
Amazon has things to trade too but probably not ones Apple is all that interested in getting or Amazon is interested in providing: access for iBooks on the Kindle ecosystem.
This.
Well, since you've officially approved this discussion on this topic a lot of the regulars around here are fed up with having to reply over and over again to the same dishonest FUD that's been debunked since the beginning of the thread, or in reality, several threads. I guess we can call the people who, from their history, are blatant Apple bashers and from posts in the current thread where they have argued both sides of the issue with the very obvious purpose of stirring up anger and fear anything you like, but we can't really pretend their are here with honest intent to engage in meaningful discussion to arrive at the truth.
No, Apple's stance here is a concern to the consumer, as it looks like Apple is running a genuine and not insignificant risk of alienating content providers. The tablet market is still just being born; Apple have this huge first-mover advantage but right now it looks to me like they're determined to shoot themselves in the foot. I think the 30% cut for app sales is reasonable, but 30% cut just for processing subscription payments is totally unreasonable. If it was me in charge at Apple, I'd lower the subscription cut to 10% and be happy making my massive margins on the hardware.
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 when they signed the developer agreement. I don't understand why everyone keeps evaluating this in a fee for services context when it's all about the revenue sharing that the developers agreed to do.
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, and the few, most likely, small and honest developers who don't cheat on their agreement end up subsidizing Amazon's app distribution.
And there is absolutely no reason to think that this will be anything but good for the consumer. 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.
As far as how this affects other apps and companies, it doesn't affect, for example, companies like Dropbox at all because they aren't selling in-app content. How much it will affect other companies is unknown, but the, "all their profits will go to Apple and they'll leave iOS," crowd are using false and misleading numbers and assumptions to make that case. Any time you find people doing that you can be sure their objective is not the truth, and this case is no different. Unfortunately, far too many people have gotten caught up in the panic these people are trying, and succeeding, to create.
Kindle isn't going anywhere, and people can put forth all the false numbers and assumptions they want to try to prove it will, but their proofs are worth what their evidence is, which is nothing. Amazon not only isn't going to lose money on iOS users, it isn't going to lose money on IAPs.
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.) It's an emotional topic and panic is in some part understandable, but it's just not going to happen and it would be the beginning of the decline of Amazon if they allowed it to. They'll still make plenty of money on eBooks and iOS users, so we don't need to be crying a river for them just yet.
The bigger issue that people's fears ought to be driving them to look at, the actual source of their fears, is the problem of proprietary DRM. If it weren't for proprietary DRM, no one would even care if Amazon disappeared off the face of the earth. The fact that the presence of this proprietary DRM, with the potential to render one's eBooks useless ought to be the the real point people focus their concern on here.
.. Anonymouse and yourself are insisting... And Anonymouse, no.. Amazon CANNOT ... That's anonymouse's irrational fear mongering. ...
I don't appreciate having words put in my mouth and what I've said being completely misrepresented. One of us is dishonestly fear mongering, but it's not me.