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I think part of the problem here is that Apple's 30% fee is clearly aimed at digital goods for which the marginal sale has approximately no costs. Most digital
by graeme 8y ago
I think part of the problem here is that Apple's 30% fee is clearly aimed at digital goods for which the marginal sale has approximately no costs. Most digital goods are quite scaleable, and have enormous marginal per unit.
However, Spotify is not at all like that. Neither is Kindle, neither is Netflix. So a system that is somewhat justifiable for software is simply insane for digital goods which do have marginal costs to sell.
This is not necessarily simply to resolve. Witness, for example, the troubles with corporate taxation, and EU proposals for a digital tax on gross revenues rather than net revenues. This is basically aimed at the same sort of problem. E.g. Spotify might actually be very happy to hand over 30% of profit per user to apple, as opposed to revenue per user. But, how the devil do you calculate that simply, for all companies in this category?
I don't know exactly how to address it, but Apple should in some way address the fact that not all digital goods have zero marginal costs to sell.
This is far from the only issue at play, but I haven't seen it addressed, and I think it's fairly central.
- teilo 8y agoThat may be true for bedroom developers, but it's just not true for the great majority of people or companies making money on app sales. Consider how many of them rely on cloud infrastructure. Those are not sunk costs. Consider also how necessary it is to market your apps, pay your staff, etc. Also not sunk costs.
- graeme 8y agoThose are generally average costs, not marginal ones. I don’t mean overall profit is 100%. I mean profit on a single extra sale is genrally between 80-100%.
- nacs 8y ago1) The Apple statement that the royalty drops to 15% after the first year (so Spotify is not paying 30%) 2) Also from that statement -- the majority of Spotify customers are either free (ad-supported) customers or don't pay for Spotify through the in-app purchase I'm actually a Spotify customer and am also one of the people who subscribed through the Spotify site instead of the in-app purchase (of which Apple gets no cut).