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Comment by dylan604 | Hacker News Reader

The problem I have is that you make it sound like you have a right to release software for their platform. They opened their platform for devs to make apps. You accepted that offer, read their terms, agreed to those terms, and are now complaining about those terms? I get it that you want to make 100% of the price made from each sell, but that's not realistic. If you sell your product at a brick&mortar store, you don't get full amount of the sell. They buy it at wholesale. Rarely is that wholesale price only %30 of the retail price. Nothing about the App Store seems pretty reasonable.

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But in the brick & mortar scenario, the negotiation happens on more of a level playing field. Both parties have a reasonable alternative if an agreement isn't reached -- the manufacturer can find another retailer, and the retailer can find another supplier. In this case there's no such competitive market.

Granted, 30% would be low for retail, but surely digital marketplaces would charge less if competition was allowed. To get a sense of what pricing would look like in a competitive market, we can look at Steam, Epic, etc. for app distribution, or Stripe, Braintree, etc. for in-app purchases.

Ever tried to negotiate to get your product sold on a shelf? It is very much not a level playing field. WalMart is infamous for beating sellers down to such a low per unit price with the promise of making it up on quantity. Target, BestBuy, and any other big box retailer only follow WalMart's lead. Then there's the fact that if your product doesn't sell well according to their metrics, you are forced to buy it back from them. Now you're hoping Ross will buy it from you!

There are costs of doing business. They can all be negotiated or at least attempted, but at the end of they day you want your product where the consumers are, so you have to ultimately play within their terms. You can make 70% or make 0%.

No one said retail was easy! Thin margins are just the natural result of competition. Retailers have thin margins too. Walmart's net profit margin was 4.7% in Q2, and that was a major outlier. The playing field might not be completely level, but at least competition exists on both sides.

There's a saying in economics that "in a perfectly competitive market, nobody is making a profit - because if they are, someone is losing customers". In a perfectly competitive market, everyone lowers prices to the point they can't lower them anymore, and that tends to be the same price for all competitors.

In a market where someone is making billions in profit, it's almost de-facto evidence of a lack of competition. Not a priori, obviously, but it gives you a basis for measurement that where you're looking is somewhere on that spectrum.

For big box stores, that razor thin margin is exactly what you would expect from a very competitive market and so it's fair to say that it is one.

Who else can charge 30% on every sale just because?

> Who else can charge 30% on every sale just because?

Every physical product retailer charges > 30%. This is what I'm suggesting is the confusion point. If an app developer sells an app for $0.99, then the dev gets $0.66 per transaction. If a physical product producer sells something with an MSRP of $0.99, the retailer will be purchasing the item at a wholesale price of closer to 50% of the MSRP (if not a higher percentage) leaving at max $0.50 per item. This shows how much easier the software dev has it.

Arguably Apple should have nothing to do with this. Someone buys a phone from Apple, and now owns that phone. He wants to use his property to run some software. What should Apple have to do with this decision any more than Chevy should tell me what neighborhoods I should drive my car into?

Not a fair comparison, this’s between developers and Apple, Apple doesn’t change you anything after you buy their phone.

It's like saying VAT and GST aren't charged on customers but on businesses.

The point is that Apple continues to make decisions FOR YOU after you buy the phone - and we aren't talking about where the settings screen is or the color of the icons, we are talking about who you are allowed to do business with -- and that is anticompetitive.

Just because you want to punt and say it's between the developer and Apple doesn't make it better. The point is that it shouldn't be.

You call it their platform, I call it my computer.

It is your computer; you have a right to that hardware. But they only licensed you the OS and the hardware only supports that OS (which you acknowledged and agreed to when you bought it) so you can call it what you want, but you can’t force another entity to do what pleases you. The courts will decide that and it will set a pretty significant precedent.

You're arguing for a future where you own nothing and rent everything. Look at how many industries are using the idea of software licenses to retain control over your devices after you buy them so they can render them useless, or at least less useful, unless you pay for a subscription of some type.

The answer to this is to build a better iPhone and better iOS and make it open. Not legislature - this is assuming all the users are for this (at best it seems they don’t care much about the developers). All this is difficult to accomplish. Epic should try this instead of feeding their attorneys the billions of revenues they collected from their users.

EULAs have existed since the 80s, with no clear distinction on when software must be considered a product equivalent to a physical good, vs when it must be considered a service. The internet did not help with the ambiguity around this distinction.

I've always felt the start of a proper solution would have been to have the author distinguish whether they were selling products or services - choosing between copyright, patents and first sale doctrine for products, and trade secret protection only for services.

Now that the global economy is based on computer software, it would be a long and difficult process to make changes.

30% of the app price is high, but not insane. They're handling 100% of the distribution, installation, verification, and payment processing. 30% of recurring revenue is highway robbery, because they offer NOTHING to subscription content.

30% cut from one-off payments is highway robbery. On top of that...

> They're handling [...] payment processing.

That has a tone-deaf shade. This piece of news is particularly volatile because Epic and Apple are now going to court over Apple expressly forbidding a developer doing their own payment processing. These are mafia-like tactics.

I've said it before: 30% is way, way too much. A very good agent gets 15%, and they actually arrange their clients with profitable opportunities. The app stores have set themselves up as gilted gatekeepers, demanding a commission twice as high.

> 30% of recurring revenue

During feudalism 1.0 the peasants were raked for 10%.[0] In this brave new world of 2.0, that would apparently give the monarch an insufficient profit margin.

0: https://en.wikipedia.org/wiki/Tithe

> During feudalism 1.0 the peasants were raked for 10%.[0]

> 0: https://en.wikipedia.org/wiki/Tithe

Since tithes are paid to the church and not the state, this immediately implies the peasants were paying more than that.

Historical tax rates are low, and so is historical productivity. For example, you can read old instructions to tax collectors saying "take everything they don't need to survive -- but no more than that".

So this becomes a question of whether today we're measuring up from the tax rate, or down from the rate of confiscation of surplus.

In a way we associate tithes only with churches, but as the first sentence of that Wikipedia page states: "[...] paid as a contribution to a religious organization or compulsory tax to government."

However, I think you bring up a much more important point, which deserves highlighting - the confiscation of surplus. The feudal lords at least understood that a starving peasant is not going to produce much surplus. Whereas we live in our respective modern societies and see concepts such as "working poor" as perfectly normal.

IMO the world is seriously bent when people who work their arses off still have to rely on charities to sustain themselves at all. Something is being confiscated but it sure isn't surplus.

I agree with you that it's high, but can be argued except for teh recurring subscriptions, which they earn zero part of. I agree there should be third party in-app processing.

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