U are 100 percent right on this...
Go Apple...Do this and rule the world. Don't back down. You will win not matter what. This will make the competition open up and do something.
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Apple's App Store Subscription Policies Raise Antitrust Issues as Content Providers F
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U are 100 percent right on this...
Go Apple...Do this and rule the world. Don't back down. You will win not matter what. This will make the competition open up and do something.
LOL, yet they don't want to pay for that. Well they have not said that, people here think they should not have to pay for that.
Scary good you mean.
Apple is saying to its IOS customers, we want you to be able to EASILY purchase content (1 click easy), and do so at the same prices you might buy it anywhere else. In otherwords, Apple is saying, we want our customers to have an awesome experience. That is scary!
Can someone refresh my memory on how apple convinced all the record companies to agree to the 30% on songs?
Were these same debates happening back than regarding music? Just want some historical perspective. The 30% is so accepted now it seems ho hum but were people up in arms screaming bloody hell when apple proposed it and calling for apples head?
Also from a magazine perspective isn't it all about volume of subrscribers b/c the real money is from advertisements? Who cares if they get 30% less. They'll save on delivery, printing, employees, marketing etc..
They'l have way more subscribers and be able to charge more for advertising.
Were these same debates happening back than regarding music? Just want some historical perspective. The 30% is so accepted now it seems ho hum but were people up in arms screaming bloody hell when apple proposed it and calling for apples head?
Also from a magazine perspective isn't it all about volume of subrscribers b/c the real money is from advertisements? Who cares if they get 30% less. They'll save on delivery, printing, employees, marketing etc..
They'l have way more subscribers and be able to charge more for advertising.
nope, you still fail -- just because the infrastructure was in place doesnt mean you get to use it for free! imagine if i tried moving my retail business into the local Walmart and said i wont pay rent because, "You already have this big store built! What's the big deal!?"
while it's true the hard drive volume for non-hosted content will be less, the mere fact that the apps/content use said infrastructure for the rest is still a tangible cost. again: nothing is running on unicorn farts. databases require a lot of infrastructure.
so is 30% for content as fair as 30% for hosting? perhaps not. but its not my -- or your -- business to decide that. thats apple's business, quite literally... they will adjust w/ the market.
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Construction is much different from retail. The investments are different and amortized differently, the overheads are different, etc. You can't really compare them. One has rent, one has heavy equipment purchasing.
In retail and distribution, 30% is a low markup. In "cornered" markets, which one can argue in a sense that iOS is, it's shockingly low. As pointed out Amazon was extracting a 70% share from publishers on eBooks--and essentially demanding an unrestricted license to the work--until iBooks hit the scene.
...not if theyre investors, theyre not. but if theyre publishers? yeah may be some sour grapes there.
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Welcome to economics. Were you really under the illusion that when you bought something, you were really paying the exact cost that the item took to be produced marketed, distributed, packaged, and put in your hands? You think for every individual Coke sold that the profit margin is exactly the same, regardless of where it is sold?
It would be too great a hassle and effort, on the content provider, and the consumer, to charge every item sold at its real cost. The result is that you might be paying a little more or less than the "real cost" of the item, due to circumstances in a different state or country. This will be no different.
What Apple does in their own market may have consequences outside of their market, but again, that is just economics... as well as the general principles of cause and effect
That's definitley it. Magazine's don't care that they get 30% less. How many times do you see 60% off the newstand price. or free 1 year subscription. they just need eyeballs but they want all your info. Age, Gender, income level etc.. Apple is not going to give it to them so they are freaking out. That is the real issue. Magazine specific topics (i.e. popular science, bird watching weekly) do not have this issue. they know their audience. More general magazines want to be able to target.
Sorry fellas the game is changing.
They didn't.
The amount that Apple gets from record labels is tiny. It's certainly nowhere near 30%.
There are relatively few record companies in the world. There are hundreds of Apps on the iOS App Store from companies big and small, all over the world that will be impacted by these changes.
Some companies will be able to write off 30%, some simply wont.
Apple knows that with the App Store it has these companies over a barrel - it's the App Store or nothing.
If Apple made unreasonable demands to music or video companies then those companies have plenty of other places they can go to sell content to customers.
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That's incorrect in regards to Amazon, some highlights from their terms here
How is the Kindle edition price determined?
Amazon.com determines the Kindle edition price. Publishers will receive an email notification with the pricing details prior to launch of the publication.
Effective December 1, 2010, qualifying publishers will earn an increased royalty for their newspaper and magazine titles. For each subscription sold, publishers will earn 70% of the retail price, net of delivery costs. Blog publishers will continue to receive 30% of the gross revenue.
How is my revenue share calculated?
Revenue share is calculated as (revenue - delivery costs) x 70%. Delivery costs apply if we deliver content via a paid distribution method, such as over Whispernet. When Amazon includes delivery, the cost is $0.15/megabyte (MB) in the US and UK sales from Amazon.com, £0.10/MB for sales from Amazon.co.uk and $0.99/MB in the rest of the world. We calculate the delivery cost by multiplying total megabytes sent by paid delivery by the cost per megabyte above. Delivery costs are therefore dependent upon customer location, how they chose to download and the file size.
How can I estimate my delivery costs?
Delivery costs are dependent on the Kindle file sizes. Kindle file sizes vary depending on the number of articles and images that are included in the file. The file size for a typical newspaper with 100 articles and 15 to 20 images ranges between 0.5 and 1MB. The file size will also vary depending on the resolution of the images. The file size for a typical magazine publication with 30 articles and 20 to 25 images ranges between 1 and 1.5MB. You can estimate the file size for your publication by downloading the Kindle files after you have added your publication through KPP.
For example, the delivery cost of a newspaper that delivers 9.0MB/month via paid delivery methods is $1.35. If the publication costs $9.99/month, then a publisher would earn $6.05 for each subscription.
Does this mean that publishers pay for all of the delivery costs?
No, the delivery cost is shared in proportion to the revenue split, so publishers only pay for 70% of the delivery costs. The formula to calculate your royalties under this new revenue model is (revenue - delivery costs) x 70%.
On a personal note, I'm not sure this'll apply to Netflix, Rhapsody, etc Reading the Apple press release (as well as Google's announcement) makes me think it's more to do with digital newspapers/magazines, particularly how Apple kept mentioning publishers, which I don't think really applies to Netflix et al.
If they're really going for everyone with no exceptions, then I just hope they know what there doing.
Short-sighted. There is always a struggle between creators, publishers, and distributors. The closer you are to the beginning of that list, the more coincidence there is between what is good for you and what is good for the consumer. If Amazon is not taking an extra "cartel cut", that means some combination of:
1. More money for the creator.
2. More money for the publisher.
3. More money for Apple.
Any and all of which correlate, more or less directly, to better things for me--the consumer. The idea that having extra middlemen, who have demonstrated themselves to be bad actors when it comes to anything other than following the short-term Walmart model, is a consumer win is so bats that there isn't even a word for it.
Take into account that the store and land Walmart is on is also leased from a 3rd party. Just something not to forget. Also, your analogy doesn't really fit this issue at hand here. The issue at hand here is Walmart charges you 100 dollars to develop your products (lets call them Product A) to sell in Walmart. You gladly pay the 100 bucks and give 30% of all profits to Walmart on items sold through Walmart. You also have a Product A store down the street. Walmart is now telling you if you want to continue to sell here we take 30% across the board. Whether you sold the product here or not. I may have missed a few things but thats kind of the general issue the way i see it.
"The bottom line is we would not be able to offer our service through the iTunes store if subjected to Apple's 30 percent monthly fee vs. a typical 2.5 percent credit card fee"
So what's the problem then? If that's the case, Apple won't have your business, and Apple will lose. You can still sell your products as before.
Keep the government's guns and coercion out of this.
So what's the problem then? If that's the case, Apple won't have your business, and Apple will lose. You can still sell your products as before.
Keep the government's guns and coercion out of this.
Which is why many Kindle mag/newspaper subscriptions are high-priced, many even higher than the physical copies. Which is crazy...no one is making money in the news industry and magazine publishers are hurting, too.
Apparently you missed the whole e-book fiasco when Steve Jobs reset the publisher's cut but insisted on "best price" and Amazon refused to comply with publisher-set pricing...but eventually caved in. Now many Kindle books are higher-priced than the hard copy because Amazon isn't allowed to sell below the publishers' set price. We can thank Steve for that, and the coming price increases, too. I've purchased at least 100 physical books since I've owned a Kindle, because I refused to pay MORE for a digital copy.
I think you misunderstand slightly.
From the press release...
Netflix are perfectly within their right to not put a subscribe link within their app (do they now?) and therefore not pay Apple anything. Only when, like I said, they want to let people subscribe from the app do they have to use the Apple subscription method.
They can continue to drive people towards their website, their own subscription and billing platform, and continue to do their own authentication within the app if they want to and pay Apple nothing.
But if they want to put subscriptions in the app, they have to use the Apple way.
This has been rehashed so many times that one can only surmise you're deliberately lying at this point. Apple is not taking a 30% cut of Kindle purchases made on the Kindle. You are wrong, wrong, wrong, wrong, wrong.
It sounds like it is choice superficially, but when you look closely at it, it's not. In-app purchase will always be more convenient than going outside the app, so this requirement will be unsustainable for music services and literary publishers. Book and magazine publishers, for example, don't have the kind of margins to fork over 30% to Apple. They will have to raise their prices by around 42% or leave the platform altogether.
The reality is that Apple can live without the business of these companies, but those companies can't live without the business of iOS customers.
Services like Netflix, Spotify, Last.fm etc. operate on a subscription basis and a huge part of their offering is the ability to use their service on your mobile device.
If they leave the App Store in protest, they will lose customers.
If they stay in the App store, they will lose money - which could completely destroy many business models.
Well sort of, apple is saying offer both ways to purchase not just theirs. I don't see the issue. The publishers are afraid everyone will just use the App Store, well then that should tell them something about their offer and service. And if they want my contact info which they are also crying about then you better offer the subscription for free. They can't have it both ways.
I can buy iTunes cards at a lower cost than face value so I save money and it is just easier.
Not quite. I don't know book margins, but Amazon doesn't make books. It sells them. Apple is taking 30% of the cost, but that comes out of Amazon's profit, which is less than the sale price.
So, in your example:
With two ten dollar books, maybe only $5 each goes to Amazon. In a direct sale, Amazon is making $10 total for the two books, and they have to pay the other $10 to the publisher and author, etc. for the actual materials itself. This gives Amazon a 50% margin (this is just an example. I don't know Amazon's actual cost of goods sold).
With the 6 sold via iOS, Apple gets 30% of each sale. 30% of $10 is three dollars. That means Amazon is only netting $2 each book ($10 - $5 cost of goods - $3 apple slice). 2*6 = 12, or only 2 more dollars than the two they could have sold on their own. Meanwhile, they've had to spend resources to sell those books on Apple (building and maintaining an iOS app, paying the account executives who work with Apple, etc.). Your example ALSO assumes that they sell 4 additional books because of the Apple platform. I think it's more likely the only sell 2 additional ones.
The real problem with this idea, and why Amazon and Netflix won't do it is this whole process reduces their profit margin. Margins directly translate into stock price (look up price earnings ratio). Amazon, a public company, could see their margins slashed if sales really shot off on the Apple platform, if Apple gets 30%, even if their total sales went up (i.e. if their margins on two $10 books was 50%, their new margin in the made-up-example above would be 12/16, or 20%). Lower margin business have lower P/E ratios. Even if sales goes up, if their margins go down enough, their stock will fall, and they'll have less ability to go to the public markets for growth capital, and some investor will rise up and try to win control of the company to take it in a different direction.
I can't say this clearly enough -- THIRTY PERCENT WILL NOT HAPPEN. Amazon, Hulu, Netflix will all walk. This is not Apple trying to make more money, this is Apple pushing these folks off their platform. Period. It's a punitive, ridiculous amount, and there is no way these other companies will pay it. An original content producer might pay it (because Apple then becomes their channel instead of Amazon), but not an existing reseller/channel player like AMZ.
People are defending Apple as if they are sticking up for the consumer. They are not (in this case). They are trying to lock down their platform for their content channels, and scare away the other channel players. This is about less choice. It's a logical move by Apple, but I would submit they are mis-playing their hand. The iPhone and iPad are not dominant ENOUGH to make this move. I think they will get burned, and they will back-track from this for the the near term.
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Absolutely, that's how they know what products we need before we do!
But, that being said, I still (for whatever reason) trust apple with my info more than I trust Conde Nast.