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Fully recognizing that Apple's 30% is highway robbery, isn't Google's "only 10%" still fairly outrageous? This seems like more a 5% feature, since the app provi

Fully recognizing that Apple's 30% is highway robbery, isn't Google's "only 10%" still fairly outrageous? This seems like more a 5% feature, since the app providers still have to provide all their own infrastructure to actually support the subscription.

bhatau 16y ago
No, Since with Google there is no lock-in. iOS device owner have no option other than using Apple app-store/itunes.
bradleyland 16y ago
This isn't a "processing" fee. This is a new kind of fee. It's a "platform access" fee. Apple sees value in the fact that they've cultivated a mass of users who are more than willing to repeatedly spend small amounts of money on content. I don't think that point can be overstated. iOS users buy a ton of content, and anyone with content to push wants access to them. Hence, the standard rules of supply and demand apply. If you control 100% of the supply, you are a monopoly, so the question will become one of defining the supply. Is it iOS users? Is it mobile device owners? Is it media consumers? Where the definition falls on that continuum will define the outcome of the investigation. I'd be very surprised if the regulatory agencies defined the supply as iOS users, so I think Apple will get away with this. Not that it matters much. I believe Apple has crossed the critical tipping point where sustainability exists only in niches, and will ultimately push away so many content distributors that the actual creators (those with the room to sell at a 30% markdown) won't be able to fill in the gaps fast enough. There will be volumes of content available on other platforms, and the attractiveness of iOS devices (and platform) will diminish. This will have the effect of accelerating competing platforms' growth lead. At that point, Apple will either react to the market, or relegate themselves to a small portion of the market that they will happily turn a huge profit on.
- r00fus 16y ago
  This platform-markup (30%) will affect other players because in order to show any of your content on iOS, you must not just mark up your price, but Apple demands price matching with other markets... that's the uncompetetive part, as that will just raise prices for everyone, unless all those subscription services and content providers ditch iOS en-masse (unlikely). If Apple were to relinquish their price-match requirement (unlikely) or allow apps that had no external store references (more likely), they would not cause such an upheaval in pricing.
  - bradleyland 16y ago
    I don't disagree. The question, I think, is whether or not regulatory agencies will force Apple to re-tool their terms. That will depend on whether or not Apple is found to have a dominant position in "the market". No one has defined "the market" yet though.
alanfalcon 16y ago
It's not highway robbery. It's the cost of doing business on the App Store. You always have the option to serve your customers on their iOS devices over the web. If you want the convenience of the App Store and a native app, then 30% is the going rate.
- SoftwareMaven 16y ago
  And paying the bandits on the highway was the cost of doing business if you wanted to run your trade caravan through the forrest. I love my Apple products. I'm in awe at what the company has accomplished over the last decade. That doesn't mean they can do no wrong and their decisions can't be questioned. I'm not talking about the cost of doing business here. I'm talking about the cost of being a customer here and the potential cost I might be forced to take, even if I decide not to be a customer any longer. If Netflix raises its prices across the board so they can stay in the garden, then it doesn't matter whether I accept Apple's rules or not: the prices are raised across the board.
  - alanfalcon 16y ago
    The parent comment makes no mention of any terms beyond the 30%. I agree that there seem to be some questionable terms (especially involving the most favored nation clause) but the 30% fee itself is simply not highway robbery. There are two roads to your customer on an iPhone. One is nicely paved with trees planted and maintained for maximum appearance, and if you take this road you're charged 30%. The other road is a path in the forest where maybe you need to chop down some trees as you go, but there is no 30% fee. There are no robbers in any of these options, one just happens to include a toll booth and you can decide if the nice view and comfortable ride is worth paying the toll.
    - jokermatt999 16y ago
      But Apple made the other path illegal, so as it stands, you have to give the bandits your money. Personally, I just hope people realize the kingdom of Android has a much nicer path. Sure, some parts aren't as nice as iOS, and the locals tend to do less business, but there are no bandits, and no gate keeping you out if the king suddenly decides he doesn't like what you're selling.
kalak451 16y ago
Does google require you to use their service the same way apple does? Or is their service just there for developers that want to use it(at a 10% cost?)
- michaelcampbell 16y ago
  I believe the latter. Android has always allowed app installs not-from-the-market. Some CARRIERS (notably AT&T) have removed that ability for some handsets, but it's not universal and as far as I know, not common.
Kylekramer 16y ago
10% does seem a bit high, but it is also unclear what the terms actually are. Google's system is pretty vague at the moment and seems much more varied than the Apple plan to the point I can't imagine a straight 10% off the top is the deal. Of course, as far as regulators are concerned, the big difference is Google isn't railroading publishers into using it on Android or enforcing price matching.
danilocampos 16y ago
> the app providers still have to provide all their own infrastructure Like the credit card processing, the hardware manufacturing facilities in China, the software libraries, the industrial designers... Apple has made it absurdly convenient to consume rich content. They have built fucking science fiction. 30% to get delivered to someone anywhere, any time is a bargain. You're paying to be part of the gut wrenchingly difficult channel Apple has created from scratch, which no one else had the foresight to predict or the balls to put money behind. Apple bet the damn farm on this crazy iDevice shit and they get to charge whatever they like for it now that it works. Anyone who doesn't like it can go build their own fully integrated platform.
- benologist 16y ago
  Except Apple didn't build Netflix any more than HP, Dell or LG did, all of whom provide devices you can use for Netflix. Why doesn't Firefox get to charge 30%? A big chunk of people probably get to Netflix via it.
  - danilocampos 16y ago
    So we'll let the market decide which approach provides better value and a better user experience. Sounds like we've all got options, so what's the problem?
    - shou4577 16y ago
      I've got one problem, but I haven't really figured out how it fits in exactly. Assuming a lot of things in how this plays out, I don't find it terribly unlikely that some subscription services will have to raise their rates to maintain a profit. Maybe not a big problem for iOS users, since they get the benefit of using the app store for purchases. What about non-iOS users? I subscribe to Netflix, but I don't use any apple products to access that subscription. According to Apple's rules, Netflix can't have the subscription available at different prices, and so my price goes up because of Apple's policy. There may be some ways around this, like Netflix offering two plans - one that includes iOS use, one that doesn't - without hiking the latter. But they might not. I haven't yet worked out what the "fairness" of this all is. As a consumer, I certainly don't feel that I am entitled to never having price hikes, and I realize at the same time that some of the money from products I pay for is used to support products that I don't pay for. But this feels wrong to me - maybe it's just the directness of it. Apple says "pay more" and even people who don't buy Apple products have to pay more.
necubi 16y ago
The difference is, Apple's 30% is a requirement to do business on their platform. Apple can charge whatever they want because there is no competition--you're not allowed to use other providers. Your only option is to leave iOS, which isn't really an option for a lot of companies. Google isn't mandating anything; if a company finds 10% to be reasonable for the services provided, they can make use of it. Otherwise they can do it themselves, or use another provider.
ScottBurson 16y ago
Right. Now when Apple gives in and drops the fee to 15%, everyone will relax, even though if they'd asked for 15% initially, they would have gotten much the same reaction they're getting now. It's a brilliant strategy.
- dialtone 16y ago
  The problem is not the 30% fee. The problem is the requirement to offer inside iOS the same or better deal that you give outside of it.
blahedo 16y ago
I was thinking about this myself, and I'm having fun imagining an ongoing argument at Google: M: I just don't know. 10% seems high. A: But it's a great service, and developers will pay for the convenience. B: M's right, 5% would be a better rate; we're not planning to force people to use it and if it's too high they'll just go somewhere else. 5% might even be too high. M: I'll think about it. A: But you've been thinking about it for weeks! We can't release until we agree on a number. And I still... [all are interrupted by video of Apple announcing their 30% policy with mandatory participation] [pause as they pick their jaws up off the floor] M: Ten. Go.
Bossman 16y ago
10% is still a bit much, I guess. But it's pretty damn smart of Google. Apple announces 30%, everyone gets pissed. Google comes out and announces their plan and doesn't make a big deal about any of it. Everyone wants to know how much Google takes and when they find out it's 10%, Google wins.
Niten 16y ago
Not at all. Because unlike Apple, Google isn't forcing people to play by their rules; they're just holding this out as an option for those developers who choose to use it.

bhatau 16y ago

No, Since with Google there is no lock-in. iOS device owner have no option other than using Apple app-store/itunes.

bradleyland 16y ago

This isn't a "processing" fee. This is a new kind of fee. It's a "platform access" fee. Apple sees value in the fact that they've cultivated a mass of users who are more than willing to repeatedly spend small amounts of money on content. I don't think that point can be overstated. iOS users buy a ton of content, and anyone with content to push wants access to them. Hence, the standard rules of supply and demand apply. If you control 100% of the supply, you are a monopoly, so the question will become one of defining the supply. Is it iOS users? Is it mobile device owners? Is it media consumers? Where the definition falls on that continuum will define the outcome of the investigation. I'd be very surprised if the regulatory agencies defined the supply as iOS users, so I think Apple will get away with this. Not that it matters much. I believe Apple has crossed the critical tipping point where sustainability exists only in niches, and will ultimately push away so many content distributors that the actual creators (those with the room to sell at a 30% markdown) won't be able to fill in the gaps fast enough. There will be volumes of content available on other platforms, and the attractiveness of iOS devices (and platform) will diminish. This will have the effect of accelerating competing platforms' growth lead. At that point, Apple will either react to the market, or relegate themselves to a small portion of the market that they will happily turn a huge profit on.

r00fus 16y ago
This platform-markup (30%) will affect other players because in order to show any of your content on iOS, you must not just mark up your price, but Apple demands price matching with other markets... that's the uncompetetive part, as that will just raise prices for everyone, unless all those subscription services and content providers ditch iOS en-masse (unlikely). If Apple were to relinquish their price-match requirement (unlikely) or allow apps that had no external store references (more likely), they would not cause such an upheaval in pricing.
- bradleyland 16y ago
  I don't disagree. The question, I think, is whether or not regulatory agencies will force Apple to re-tool their terms. That will depend on whether or not Apple is found to have a dominant position in "the market". No one has defined "the market" yet though.

alanfalcon 16y ago

It's not highway robbery. It's the cost of doing business on the App Store. You always have the option to serve your customers on their iOS devices over the web. If you want the convenience of the App Store and a native app, then 30% is the going rate.

SoftwareMaven 16y ago
And paying the bandits on the highway was the cost of doing business if you wanted to run your trade caravan through the forrest. I love my Apple products. I'm in awe at what the company has accomplished over the last decade. That doesn't mean they can do no wrong and their decisions can't be questioned. I'm not talking about the cost of doing business here. I'm talking about the cost of being a customer here and the potential cost I might be forced to take, even if I decide not to be a customer any longer. If Netflix raises its prices across the board so they can stay in the garden, then it doesn't matter whether I accept Apple's rules or not: the prices are raised across the board.
- alanfalcon 16y ago
  The parent comment makes no mention of any terms beyond the 30%. I agree that there seem to be some questionable terms (especially involving the most favored nation clause) but the 30% fee itself is simply not highway robbery. There are two roads to your customer on an iPhone. One is nicely paved with trees planted and maintained for maximum appearance, and if you take this road you're charged 30%. The other road is a path in the forest where maybe you need to chop down some trees as you go, but there is no 30% fee. There are no robbers in any of these options, one just happens to include a toll booth and you can decide if the nice view and comfortable ride is worth paying the toll.
  - jokermatt999 16y ago
    But Apple made the other path illegal, so as it stands, you have to give the bandits your money. Personally, I just hope people realize the kingdom of Android has a much nicer path. Sure, some parts aren't as nice as iOS, and the locals tend to do less business, but there are no bandits, and no gate keeping you out if the king suddenly decides he doesn't like what you're selling.

kalak451 16y ago

Does google require you to use their service the same way apple does? Or is their service just there for developers that want to use it(at a 10% cost?)

michaelcampbell 16y ago
I believe the latter. Android has always allowed app installs not-from-the-market. Some CARRIERS (notably AT&T) have removed that ability for some handsets, but it's not universal and as far as I know, not common.

Kylekramer 16y ago

10% does seem a bit high, but it is also unclear what the terms actually are. Google's system is pretty vague at the moment and seems much more varied than the Apple plan to the point I can't imagine a straight 10% off the top is the deal. Of course, as far as regulators are concerned, the big difference is Google isn't railroading publishers into using it on Android or enforcing price matching.

danilocampos 16y ago

> the app providers still have to provide all their own infrastructure Like the credit card processing, the hardware manufacturing facilities in China, the software libraries, the industrial designers... Apple has made it absurdly convenient to consume rich content. They have built fucking science fiction. 30% to get delivered to someone anywhere, any time is a bargain. You're paying to be part of the gut wrenchingly difficult channel Apple has created from scratch, which no one else had the foresight to predict or the balls to put money behind. Apple bet the damn farm on this crazy iDevice shit and they get to charge whatever they like for it now that it works. Anyone who doesn't like it can go build their own fully integrated platform.

benologist 16y ago
Except Apple didn't build Netflix any more than HP, Dell or LG did, all of whom provide devices you can use for Netflix. Why doesn't Firefox get to charge 30%? A big chunk of people probably get to Netflix via it.
- danilocampos 16y ago
  So we'll let the market decide which approach provides better value and a better user experience. Sounds like we've all got options, so what's the problem?
  - shou4577 16y ago
    I've got one problem, but I haven't really figured out how it fits in exactly. Assuming a lot of things in how this plays out, I don't find it terribly unlikely that some subscription services will have to raise their rates to maintain a profit. Maybe not a big problem for iOS users, since they get the benefit of using the app store for purchases. What about non-iOS users? I subscribe to Netflix, but I don't use any apple products to access that subscription. According to Apple's rules, Netflix can't have the subscription available at different prices, and so my price goes up because of Apple's policy. There may be some ways around this, like Netflix offering two plans - one that includes iOS use, one that doesn't - without hiking the latter. But they might not. I haven't yet worked out what the "fairness" of this all is. As a consumer, I certainly don't feel that I am entitled to never having price hikes, and I realize at the same time that some of the money from products I pay for is used to support products that I don't pay for. But this feels wrong to me - maybe it's just the directness of it. Apple says "pay more" and even people who don't buy Apple products have to pay more.

necubi 16y ago

The difference is, Apple's 30% is a requirement to do business on their platform. Apple can charge whatever they want because there is no competition--you're not allowed to use other providers. Your only option is to leave iOS, which isn't really an option for a lot of companies. Google isn't mandating anything; if a company finds 10% to be reasonable for the services provided, they can make use of it. Otherwise they can do it themselves, or use another provider.

ScottBurson 16y ago

Right. Now when Apple gives in and drops the fee to 15%, everyone will relax, even though if they'd asked for 15% initially, they would have gotten much the same reaction they're getting now. It's a brilliant strategy.

dialtone 16y ago
The problem is not the 30% fee. The problem is the requirement to offer inside iOS the same or better deal that you give outside of it.

blahedo 16y ago

I was thinking about this myself, and I'm having fun imagining an ongoing argument at Google: M: I just don't know. 10% seems high. A: But it's a great service, and developers will pay for the convenience. B: M's right, 5% would be a better rate; we're not planning to force people to use it and if it's too high they'll just go somewhere else. 5% might even be too high. M: I'll think about it. A: But you've been thinking about it for weeks! We can't release until we agree on a number. And I still... [all are interrupted by video of Apple announcing their 30% policy with mandatory participation] [pause as they pick their jaws up off the floor] M: Ten. Go.

Bossman 16y ago

10% is still a bit much, I guess. But it's pretty damn smart of Google. Apple announces 30%, everyone gets pissed. Google comes out and announces their plan and doesn't make a big deal about any of it. Everyone wants to know how much Google takes and when they find out it's 10%, Google wins.

Niten 16y ago

Not at all. Because unlike Apple, Google isn't forcing people to play by their rules; they're just holding this out as an option for those developers who choose to use it.