App Store rent-seeking: manton.org
@manton Agree with what you're saying here. Another example of modern Apple banking on the goodwill of past achievements with little awareness for how their most loyal customers are actually affected by their actions.
@simonwoods Exactly. We all have so much respect for Apple's history and their dedication to great products that it's easy to overlook how much power the company has now, especially over developers. It's not good.
@manton Thanks for posting this, excellent read on the original article. It answered some questions and raised others in my mind
@simonwoods and then there is this solid analysis from Ben Thompson on the case in question.
To simplify their model across the entire Apple eco system maybe Apple should move to the Apple Music / Spotify et al model and nowhere near as many people seem to complain about.
—
Each one of us pays a fixed amount of money per month and has access to every single app in the system, can use everything as much as they want etc etc
At the end of the month the apps are rewarded on a percentage basis baed on how much their app was used compared to others.
Of course the musicians in that model are totally screwed.
But then they have always been screwed 😊
@JohnPhilpin That's kind of what Setapp on the Mac is about, but it's focused around productivity and paid apps. Apple isn't going to make major end-user changes, but they should change the economics for developers.
@manton @JohnPhilpin There is surely a point where their best route to nailing down better PR (at the very least) is to admit, publicly even, that bragging about their amazing third-party developers must be joined by the fact that said developers ought to be helped and not hindered. I hope they admit, privately, that the reality is Apple simply is not capable of covering a lot of their customer needs (this is has become painfully true with each passing year for the past decade).
From a (mostly) non-Apple POV, the only thing truly attracting me to buying more into the ecosystem are the efforts from third-party developers.
@adamprocter not saying I would either. My point is that the developer deal I see on the app store is waaaay better than the musicians deal on their equivalent.
@manton yes - aware of setapp … and I was suggesting it with a little bit of tongue in cheek - partly to keep alive the idea that musicians have always had a horrible time in getting paid for what they do - and these days even more so in fact for creatives in general it is HORRIBLE.
I am one of those that looks at the things you do as massively creative, and in so many ways I think Apple's cut is one of the best a creative can expect. (CAVEAT - I am not a developer, do not deal with the app store, so not bolted in to the day to day things you will be far more aware of - simply coming at this from an outsiders perspective.)
Here is another thought …. how much sales, marketing and distribution budget should a company allow for …
i.e. for every $ received - how many cents should find their way into sales, marketing and distribution activity.
How much does that reduce if you run it through the Apple Store versus doing everything yourself?
As some comps - salesforce spends over 40% of their revenue on sales and marketing. constant contact around 38%. Marketo - before they were acquired was up to TWO THIRDS - and many more examples.
// @simonwoods
@adamprocter i did … but the devil is in the detail … and it doesn’t solve the problem now ... and in the future - I wonder how MUCH of the profits will really find there way to the right people.
Meanwhile >>>>
apple - 36 million PAYING subscribers spotify - 70 million PAYING subscribers
lets call it 100 million for simple at $10 per month
that is a total revenue of 12 * 10 * 100 MM
i.e. $12,000,000,000 is the total music revenues
tho the verge in september had streaming at 75% of music revenues for '18
techcrunch had 43% for last year
there is something wrong with the figures ... no?
@JohnPhilpin I haven’t thought too much about the music business recently so my thoughts are a little old (perhaps)
Napster destroyed old business models & the music business didn’t act & tried to hold onto old models. And looks like clawed back there destruction from the open web and the chances it started to provide for small artists through concerts and other revenue streams. Surveillance capitalism helped out their (obviously)
Streaming services don’t make any money apparently. I backed Apple after the awesome Rdio couldn’t keep going. Mainly because Apples core business is not streaming music aka the can lose money. Spotify has / had to diversify
Jimmy Lovine seems to care about musicians... mind www.netflix.com/title/802...
@manton are there any numbers to back up the claim that 30% is to high. The way I see it that percentage is there to cover these costs: App hosting and bandwidth for downloads, secure payment, developer portal, Xcode/tool development, and underwriting the free apps on the store.
@benhager The $99/year developer fee covers some of that. A bigger cost is paying the app review team. But even so, we're talking about billions in revenue. I explored the free apps problem in a blog post 7 years ago but things have changed: "free" games with in-app purchase make tons of money.
@manton true, and I know the revenue is good, like $10 billion in the last earnings call, but what about profit? What’s the cost of those services? I don’t know server costs or how many people at Apple work on these things, so I don’t have a good feel on costs.
I would have a different opinion if Apple’s costs are $3-4 billion versus $8-9 billion on that $10 billion in revenue.
@benhager We don't know, but the $10 billion also includes Apple Music, iCloud, etc. They've already lowered their cut to 15% for subscriptions after 1 year. I'm sure they can afford to do it. "Services" is not a separate company that needs to have high profit margins. They also sell iPhones. 🙂