regarding the first point about 32% take, below is my cut'n'paste from the same issue on the Apple platform. At least on Android you can sideload. Summary: "If you want to do business, you have to pay for services. Deal with it".
If you think otherwise, well, there's a market full of screaming developers with little business experience, and this is the 'home of startups' - there's a startup idea to capitalise on.
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I don't like Apple's business practises and never have, but this 70/30 split furore is hilarious to someone who has worked in retail and supply before. It is entirely normal for a retailer (apple) to take this kind of split in the retail price and the supplier/wholesaler to take 70%. In the retail industry I worked in, the retailer took a 35-40% portion.
This split is yawningly normal in retail. What's not normal is the huge numbers of "one-person" wholesalers... who have very little in the way of business experience and see that split as a "tax" rather than payment for a service.
Apple and Google may mark their apps up less than the average department store or grocery store, but it marks them up a hell of a lot more than most highly-efficient retail operations. Walmart marks up around 20%, and Costco never marks its products up more than 14%. And actual retail stores need to pay for their property, their employees, transportation, and utilities to keep their stores running. Apple and Google have none of these expenses. Additionally, both Apple and Google only operate app stores as side businesses to help sell their high margin hardware or get people to look at ads.
And don't Walmart and Costco have an excellent reputation for quality!
And actual retail stores need to pay for their property, their employees, transportation, and utilities to keep their stores running.
I thought someone would say this - as if developing the infrastructure and maintaining it is extremely low cost. Development of enterprise level software is expensive. Having individual reviews of every app is expensive.
This is just apologism for people trying to get out of the rather humdrum retailer/wholesaler relationship.
I expected to see Apple/Google conflated in the reaction to this point of the list, but for me it's a different thing.
(Disclaimer: I'm an Android/webos guy)
Apple adds
- A serious review of all submitted apps (Like it not..)
- A support procedure for problems with the app store (which I cannot judge, being on the other side)
- Market penetration in lots of/most countries.
What's the equivalent of the android market place? If there's none, why pay the same and compare those things as equals? It seems on the one side there's an army of people working on quality and support (with varying results), while on the other side there's a large void and the "See, this is the marketplace, submit stuff. I'm off" attitude.
The former seems to be far more expensive to me. If that's sustainable with ~30% of the sales, why - again - does the approach that seems less involved need the same?
They offer similar services: a centralised place that people come to in order to buy a variety of products. It's good for your software to be on it. The differences are minor, it's the merchant solution that is significantly the same.
At least with the Android marketplace, if you don't like that 30% cut, you're free to separately market and take payment for your application. The principal part of both is this 'centralised store' approach, combined with dealing with the payment system.
The other thing is good old capitalism. Apple and Google aren't social services, so why should they operate on razor-thin margins? They have desirable products, and are charging normal retail overheads for what is, essentially, a royalty-based industry. 30% is fine, and 'what do you get for it'? The ability to hawk your wares and not have to worry about bad debts or if it's worth taking a 99c sale.
Anyone who's incensed at a 30% cut for Apple/Google, when they offer a turn-key merchant solution and a huge potential sales base, has probably never heard of the publishing arrangements on other console platforms, like Sony Playstation (or Xbox or...). Small devs get absolutely raked over the coals by the high costs associated with getting a game pressed onto discs and onto a store shelf. 30% is a laugh.
Steam doesn't have the overhead of creating, advancing, and supporting an entire hardware infrastructure. Which means less costs relative to Apple. So no kidding they take a smaller cut.
Any corporation is a very large organisation, the people who design the phones aren't working two jobs .. there are different departments which create and depend upon different revenue streams. In any case, the hardware is SOLD to the consumer, not given away. I don't understand your point.
I was simply stating stream would make a better comparison than a console manufacturer selling games on physical media.
Part 1: "It would be fairer to make a comparison with a purely online gaming distribution model like Steam."
It would not be fair to make that comparison since the two models have fundamentally different underlying fixed and marginal costs.
Part 2: "Apple and Google don't have as many realworld costs once their infrastructure is working and is in place."
Apple indeed has other significant "realworld costs", especially the development, maintenance, and future research to extend their hardware platform. Steam does not have those kinds of costs, and therefore does not need to build in those costs into their margins.
Sony and Nintendo burn and load their software onto cartridges or discs .. they create stock, they package stock, they store stock, they move stock - they sell stock. These are real world (physical) costs associated with production and distribution.
Comparing Apple or Google to one of these suppliers is ridiculous because Apple don't use physical media for their software.
You made this comparison - I told you that steam would be a better (not perfect) comparison - because, like Apple and Google .. they sell via a download mechanism.
Developers are charged for disc production. Not to mention the huge fees to get titles passed Sony/Nintendo/MS/etc QA. (TCR/TRC checklists, anyone?) Don't kid yourself... developers get squeezed dry on consoles.
Apple/Google don't use physical media, like Steam, sure... but that single similarity is not sufficient to prove Steam is a "better comparison". So, again, Apple/Google are much more like console manufacturers than Steam, and their deal is comparatively better than PS/Xbox/Wii developers get.
I don't think we're going to be able to agree - but I think you're comparing Apples with Oranges.
Steam sell IP through digital channels .. Apple/Google sell IP digitally. Console manufacturers (historically) sell IP on physical media. Both involve markedly different business models - a comparison is ridiculous.
Steam sells software for PCs. Apple/Google sell software for console-like devices. Console manufacturers sell software for console-like devices. Both involve markedly different business models - a comparison is ridiculous.
Sure they do - they just buy it in a JIT fashion. Someone orders the app, Apple supplies them a copy. The 'stock bought' is the payment to the wholesaler.
If you buy ten shirts from a wholesaler, they get paid for ten shirts. If you buy ten apps from a wholesaler, they get paid for ten apps.
I don't think a department store would necessarily take 30% of all sales made within it.
A department store has different expenses, but yes, a good quality department store will take that cut and higher.
Apple and Google are not just providing market space. They also provide quality review and payment processing. It's not like your Sunday market where you pay a fixed price, take a fixed amount of stock, and then spend your own time hawking your wares and dealing with payment. Instead it's a market where you supply your stock once and take royalties on it. Apple/Google take over some of the advertising and all of the payment processing. You don't have to worry about bad credit cards. Or making the payroll. Or keeping the servers up.
In fact, that's the better way to look at it - rather than a bricks-and-mortar store comparison, apps are more like music or prose. You do the work once. You can rerelease the work if you like. It's in your own interest to help market the work, but you don't have to. But once the work's done, you can just sit back and let someone else deal with making money for you if you like. That sounds more like royalty-based industries than brick-and-mortar shops.
And compared to other royalty-based industries, in this case it's the artists taking the corps to the cleaners!
Seriously though - they've sunk heavy investment into the product, why should they go for cut-throat margins in a booming industry? Besides, it comes off as whining for suppliers to have to pay a very normal fee for services supplied
>Sure they do - they just buy it in a JIT fashion. Someone orders the app, Apple supplies them a copy. The 'stock bought' is the payment to the wholesaler.
That's not a valid comparison. The retailer's markup includes the risk that they won't be able to sell the product.
If you think otherwise, well, there's a market full of screaming developers with little business experience, and this is the 'home of startups' - there's a startup idea to capitalise on.
---- I don't like Apple's business practises and never have, but this 70/30 split furore is hilarious to someone who has worked in retail and supply before. It is entirely normal for a retailer (apple) to take this kind of split in the retail price and the supplier/wholesaler to take 70%. In the retail industry I worked in, the retailer took a 35-40% portion.
This split is yawningly normal in retail. What's not normal is the huge numbers of "one-person" wholesalers... who have very little in the way of business experience and see that split as a "tax" rather than payment for a service.