3 ms·
15% of gross receipts is not atypical for a publisher that takes on the responsibility of support, packaging, distribution, sales and maintenance. Honestly, as
by ghshephard 13y ago
15% of gross receipts is not atypical for a publisher that takes on the responsibility of support, packaging, distribution, sales and maintenance.
Honestly, as the owner of the IP, I would much rather have 15% of gross receipts than 50% of net. Taking a cut of net just encourages the publisher to beef up their costs, which are difficult for you to precisely track.
I've had to negotiate these in the past - and the "rational" approach, in which you sit across from a lawyer, and walk down the various details (usually it's a staged agreement, with certain levels of return for certain levels of sales) - can be painful. I'm not saying that I would enjoy Steve's hysterics, but, it would be refreshingly to the point.
A Lot of Steve Jobs success came from him eliminating the days, weeks, hell months of guidance/direction/management, and just saying let's get this f#%$cking thing done.
It might not be pretty, you really don't like the person doing it - but it can be effective. Alternatively, it can also be incredibly destructive. Very fine line to walk.
- abalone 13y agoThanks, but do you have a source for "15% gross receipts" as typical? Quick search brings up this study, "PROFITABILITY AND ROYALTY RATES ACROSS INDUSTRIES: SOME PRELIMINARY EVIDENCE": "For software and content licensing, it could be as high as 50%"... "defined as a fixed percentage rate of sales" [1] Which would make Jobs' ask more typical. [Edit: on second look I think the paper's 50% figure may refer to gross margins not receipts.. but anyway, that would still cast the final deal as a completely typical software deal.] [1] http://law.unh.edu/assets/images/uploads/pages/ipmanagement-royalty-rates.pdf http://law.unh.edu/assets/images/uploads/pages/ipmanagement-...
- ghshephard 13y agoIf this was a pure-play licensing deal, then agreed 15% is low, but the story made it clear that this wasn't a licensing deal, but a publishing deal in which the publisher had to hire developers to do ongoing development, provide support, etc... I.E. They'd receive a hairy-ball-of-code and have to provide a soup-nuts package to customers, including bug-fixes, phone-support, etc... in return for the 85%.
- musesum 13y agoA report from 10 years ago reflects a different economy from 30 years ago. 1980's software distribution was as complicated as making a manufacturing physical product. There was the manufacturing cost of the diskettes, packaging, manuals, telephone support, and marketing. Guess wrong about sales and you have a lot of worthless SKUs on you hand. So yes, as I recall from being a software developer back then, 15% seems about right.
- nimblegorilla 13y ago15% actually seems low. Today Apple takes 30% gross receipts for anything that goes through the app store. A lot of developers seem to find that acceptable.