Of course Rhapsody [insert Last.fm] can't sell their stuff for a 30% margin. It's not their own stuff!
They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable?
The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of publishing, distribution, inventory, sales, payments and shipping, there's real value for that 30%.
When all someone wants out of Apple is merely to process the payment and send things down the pipe, gee, who do they think they are? But that's not what Apple is actually holding themselves out as. Apple doesn't want to be in that kind of commodity market anyway. Seems reasonable to me.
I'm tired of seeing Zach's comment reposted as if it's some sort of inspired gospel.
Apple is positioning itself as _both_ a platform for applications and services _and_ as a consumer service. The services offered by Netflix, Hulu, Rhapsody, Rdio and so on offer value consumers have time and time shown they are willing to pay for. These are services the content owners (artists), studios and labels do not provide or provide poorly. Claiming they simply "repackage ... artist's content" is misleading.
These services are increasingly cross platform, available on the web, mobile devices, internet connected consumer electronics, game consoles, etc. They add value to those platforms and can complete when the platform is suitably independent. Those platforms provide only a portion of the necessary infrastructure to run a consumer service. Purchasing, bandwidth, hosting, encoding, transcoding, metadata, social networking features, inventory and so forth are typically still maintained by the consumer service itself. They already have these services due to their web presence.
Apple tries to play the game both ways in an increasingly monopolistic fashion. Before you go on and start harping about Android, recall that Microsoft was convicted not because it was the only operating system (it wasn't) but because it used it's market advantage in the OS to restrict competitors in other markets (browsers). Apple is doing the same thing.
It's one thing for Apple to provide competing consumer services. It's another when they intentional block competition on their supposedly independent platform. Keep in mind, as a platform provider, Apple doesn't provide as many services as Zach suggests. They are little more than a payment services provider, though their rates and restrictions are completely out of line with the rest of that market.
Consider for a moment if Apple were to do provide the same APIs and restrictions on all of Mac OS. Applications can only be made available in the Mac App Store. Applications must use Apple's subscription and purchasing API and no other API for purchases. And so on. They have their own browser? Why not offer an API for web apps as well. It would be secure and user friendly.
"Apple takes the place of publishing, distribution, inventory, sales, payments and shipping... Seems reasonable to me." I'm sure it does.
Monopolistic? Apple is in no way a monopoly. They have 4% of phone market share. Do you know what a monopoly is? Because based off your comment I don't think you do.
"In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.": http://en.wikipedia.org/wiki/Monopoly
So what product does Apple have a monopoly on? Laptops? No. Cell phones? No. Mp3 players? No. App store? No: https://market.android.com/
There are alternatives to Apple, you just don't like them.
Apple is a middle man, just like Wal-Mart, eBay, or Amazon who all charge for their service (selling your products).
If you don't like it, sell it somewhere else, but calling Apple monopolistic is factually inaccurate and intellectually dishonest.
Oh, and the reason I cited Zach's comment, is because the topic whether it's Rhapsody/Spotify/Last.fm/Pandora/Netflix still applies and credit is due to Zach for his spot on comment/analysis of the situation.
Actually, before you go putting others down, you should read about how this stuff works. It's highly dependent on what the market ends up being defined as. If you're talking smartphones, Apple certainly has more than 4%. MP3 players, again more than 4%. Tablets, again more than 4%.
And if you don't like the app store, Apple prevents you from selling it to customers through other means. So you can't exactly go somewhere else. Customers also just can't pick up and move to Android because of all the money they've spent on apps and content on an iPad.
Also, there's plenty of points that have been made as to why Zach's comment isn't necessarily "spot on" across the many times it has been posted. Many of them haven't really been addressed.
There are more Android phones sold than iOS devices every month. Apple doesn't have a monopoly on anything, however they do control/own their app store and they can refuse to sell whatever they want in it. If you don't like it then don't support Apple by buying Apple products, sell your apps on Android. Actions speak louder than words.
Also, Jaaron was much more condescending that I was: I'm tired of seeing Zach's comment reposted as if it's some sort of inspired gospel.
Now when you're trying to sell apps on those devices, and Apple wants to 30% of anything that is sold for those devices and intentionally blocks out perfectly reasonable businesses, that becomes anti-competitive
Edit: Btw, I have stopped. I just bought a DroidX instead of the Verizon iPhone. But that won't get me my $600 back for my iPad or the money for my iTouch. Or the money for the apps I've paid for.
Read my first comment again quoting Zach, it's pretty clear:
"Of course Rhapsody [insert Last.fm] can't sell their stuff for a 30% margin. It's not their own stuff!
They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable?
The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of publishing, distribution, inventory, sales, payments and shipping, there's real value for that 30%.
When all someone wants out of Apple is merely to process the payment and send things down the pipe, gee, who do they think they are? But that's not what Apple is actually holding themselves out as. Apple doesn't want to be in that kind of commodity market anyway. Seems reasonable to me."
Apple is giving them distribution, billing, discovery/advertising, inventory, shipping, et al-- 30% is a pretty fair cut I'd say, but hey if you disagree, don't support them.
And why would you expect to get your money back? You had no guarantee at the time you bought the Apps or iPad that the marketplace rules wouldn't changes, that's to be expected as nearly every marketplace's rules change frequently: see Amazon, eBay, etsy, Wal-Mart, whoever. I really don't understand your complaint.
Also, I'm tired of discussing this topic as it seems most people have already made up their minds on the issue regardless of the facts surrounding the situation.
Disclosure: typing on a Dell, I own a Blackberry and an HTC Aria, and I own a Macbook. I am agnostic to corporate entities, but I can step back and try to detach myself and be as objective as I can.
Yes, I've read the post several times, both the original and your many reposts of it. The trouble is is that it's not clear at all.
How does Apple do any inventory management or "shipping" given we're talking about digital goods? By having a counter for number of downloads? When have they ever done advertising or promotion the 99% of apps not lucky to be featured on in the ads? I'll agree they do some distribution and payment processing, but that's about it.
And I never said I had an expectation to get my money back. But when I paid money for hardware, I expect to be whatever I please with that hardware. I didn't pay $600 just to get access to Apple's app store on a 10" screen. I paid $600 to be able to take advantage of the capabilities of the iPad. Things like netflix and Kindle were a big factor in that decision (and honestly are some of the best things you can do with it).
Apple has blocked out any way of doing anything other than the app store, so it is a big deal. The fact that they sold me hardware doesn't entitle them to 30% of revenues from everything anyone wants to use that for.
|How does Apple do any inventory management or "shipping" given we're talking about digital goods? By having a counter for number of downloads? When have they ever done advertising or promotion the 99% of apps not lucky to be featured on in the ads? I'll agree they do some distribution and payment processing, but that's about it.
It's on their servers and using their bandwidth isn't it?
|Apple has blocked out any way of doing anything other than the app store, so it is a big deal. The fact that they sold me hardware doesn't entitle them to 30% of revenues from everything anyone wants to use that for.
Jailbreak it then, you have alternatives, Apple just doesn't have to support them. Your complaints are without merit.
And you were lecturing me for telling someone that they clearly don't know the definition of a monopoly when you're the one being the condescending asshole: Yes, I've read the post several times, both the original and your many reposts of it. The trouble is is that it's not clear at all.
Many reposts? I reposted it here twice, in reply to you and only because you clearly don't understand it and haven't given it any thought since you're still complaining about paying for something you have every option not to pay for.
No, it's not Apple's servers! The bandwidth for the app itself is small in comparison to the bandwidth for the content (streaming music or movies) which Apple does NOT host or help with at all.
And if you'd go back to the actual case law in the Microsoft case instead of linking to dictionaries and wikipedia, then maybe you'd realize the case law is more applicable than expected. The market can be defined much more narrowly than "smartphones" for the purpose of anti-trust.
How does using their servers mean they're doing inventory and shipping? I'm not understanding how it's possible to pay UPS to ship an app. Do you think anyone would have an issue if Apple just wanted to be compensated for that piece of hosting it on their servers?
You and I are not the average person. I can jailbreak, my parents cannot. Jailbreaking then voids the warranty, which is a part of the money I paid.
And when I do jailbreak, exactly how will that enable me to get Netflix, Kindle, Last.fm, Rhapsody back?
|Do you think anyone would have an issue if Apple just wanted to be compensated for that piece of hosting it on their servers?
When did Apple, or Google for that matter, because non-profits? Your argument is illogical.
Their hosting and bandwidth is the inventory, distribution, and shipping aspect. They also provide: discovery on their app store browsed by millions, billing, marketing, advertising, and promotion. The 30% is because there is real tangible value in the service Apple is providing. If you don't like it--WebOS, Android, Blackberry, WP7 are all available to you.
Edit: Thanks everyone, I wear the downvotes with pride because some of hive-mind on HN can't think outside the ridiculous anti-Apple jealousy. Whatever, if you're downvoting me for presenting facts you don't like but not responding-- you're a coward and a sheep.
As I've said before: I'm using a DELL laptop right this moment, a Blackberry in my pocket, an HTC Aria on my desk, and I have a Macbook at home. I'm agnostic to corporations, but this hyperbolic anti-Apple jealousy/rage is nonsense and hypocritical at best. This Apple hate is blinding many on HN of the reality.
If anyone wants to reply to me, please don't. I'm done discussing this and I'm not even an Apple fanatic, my next phone will most likely be a WP7.
But here are some comments I thought were actually informative:
Unsustainable? How about 'normal retail practice'? It's funny watching people froth at the mouth about normal retail practice.
I don't like Apple or how they run their business, but a 30% cut for a retailer is even be a little low. Go into a bricks-and-mortar store and usually 30%+ of the price you see is markup on the wholesale price.
Apple provide a service: they deserve to get paid for it. Even if Apple allowed apps to be sideloaded, you wouldn't sell anywhere near as many apps if you marketed them yourself, not to mention having to deal with organising a payment system and easy, integrated way of getting them.
App developers are the wholesalers. Apple is the retailer. If you want to be both a wholesaler and retailer for your app, then Apple isn't for you. Go to Android... but you'll find it's still better to give Google a cut and be on their market as well...
People love to throw around the antritrust word without--and this isn't necessarily directed at you personally--knowing what it actually means.
Does Apple have a monopoly on phones? Hardly. Look at HTC, Motorola, Samsung, RIM, Nokia, etc.
Does Apple have a monopoly on music? No. You can buy it from Amazon and elsewhere. Likewise you can use Grooveshark, Spotify, Rhapsody, Pandora, etc for different services depending on what country you're in. iTunes sure is dominant though.
Does Apple have a monopoly on ebooks? Hardly. Amazon is a far bigger player here. Amazon is not dependent on Apple as a means of distribution, although Apple devices are obviously important.
Does Apple have a monopoly on TV shows or movies? Hardly. You can buy DVDs from any number of places and downloads from the likes of Amazon. Content producers like Comedy Central, CBS, Fox and others also stream directly from their Websites (and they could do this in HTML5 if they wanted to, allowing them to be viewed on iDevices, but alas they still choose Flash almost exclusively).
So where exactly is the monopoly (virtual or actual) here? You can say that Apple is the only one who can sell apps on iDevices and you'd be right. So what? NBC is the only one who can broadcast shows on their stations. That doesn't make them a monopoly.
So unless someone can produce a cogent argument of how antitrust applies--and I've yet to see one--can we please stop bandying the word around like it has any relevance here?
This isn't to say that some Congressman or Senator won't speak out or possibly there might be a House or Senate hearing but that's really about creating the appearance of doing something rather than their being any justifiable basis for investigation.
I accidentally upvoted you. Sorry about taking away some of the pride.
The last time I looked into this, HN was a pro-Apple hive-mind, an anti-Apple hive-mind, a blatant Google fanboy den, a collection of privacy-minded individuals who despise Google with a passion, a bunch of Nokia haters, and pg all at the same time. Janus has nothing on us.
Of course Rhapsody [insert Last.fm] can't sell their stuff for a 30% margin. It's not their own stuff!
They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable?
The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of publishing, distribution, inventory, sales, payments and shipping, there's real value for that 30%.
When all someone wants out of Apple is merely to process the payment and send things down the pipe, gee, who do they think they are? But that's not what Apple is actually holding themselves out as. Apple doesn't want to be in that kind of commodity market anyway. Seems reasonable to me.