Comment by greggman | Hacker News Reader

Comment by greggman | Hacker News Reader

I kind of have the opposite opinion. It should start at 30% and go down with success.

Apple is providing a service (yea there's no alternatives on iOS but still)... for 30% they take care off all your payments from all countries, they take care of refunds, dealing with credit card companies, and for the most part dealing with customers in general.

They also provide the market, the installation system, the update/upgrade system. Having tried to write some of those myself and the servers to maintain them I can tell you I don't personally want to run them.

Compare to Steam. Steam is also 30% on a platform you can do it all yourself if you want. Sure they provide the most exposure but similarly they also provide most of the other services that make it worthwhile.

Assuming you could do that do you really want to do all that yourself? Think about it. If you did it yourself you'd need to run a server to put your software on. Keep it secure, updating it constantly with security patches. Make a relationship with a payment processor. Handle refunds yourself. Figure out an upgrade system. Figure out how to deal with failed installations. I'm sure others could name many more things you'd have to do.

30% doesn't seem unreasonable to me given it would take more more than 30% of my time (and therefore money) to do this myself. At least that's my perspective.

Your comment shows a lack of understanding of what he's saying. You're not paying for software or payment systems, or anything, it's more like a tax. I'd get all of that if I just paid $100 and sold nothing. That stuff is provided for Apple's benefit as well as your benefit.

But there is benefit to be gained by not taxing the "poor". This is the same argument as the entire "regressive/progressive" tax regimes.

I mean, yes, 30% of fuck all is not a lot and well worth what you get, but that's not the point, Apple's not making much from the long tail, so why not give the long tail the economic freedom to experiment and grow and make everyone richer. That's the point. Let the small businesses grow into bigger businesses by alleviating the tax burden.

The point is that the big fat Rovio's of this world can easily pay for the Apple ecosystem by themselves. The take from the little businesses is relatively small, so why not cut them slack by introducing tiered pricing, allowing them to spend more on growing and advertising, or simply stay in the market, and thus increasing the growth rate of the overall app economy.

By using terms like "providing a service" and "platform" and "do all that yourself", you're fundamentally missing the OPs argument. He's not talking about the value of the services, the virtual bin men, or the armies, or the law systems, he's talking about the economy that pays for all that in the first place.

"Let the small businesses grow into bigger businesses by alleviating the tax burden."

Are you honestly trying to say that the only thing stopping some small app shop from getting huge is the 30%?

I think that's a straw man.

Its not the only or the biggest obstacle, but it is an obstacle.

You know what else is an obstacle? Having to set up discovery, hosting, delivery, and payment processing yourself, and convincing the public to use your fly by night store.

Clearly not. He's saying <30% allows more growth than 30%.

no, but it would certainly help. This year I will cross 100k paid to Apple, and I've been making slightly below market rates for a few years. If I had the 100k back, I would have not only gotten to market rates, but also have enough cash on hand to consider hiring someone. At the very least I could hire someone on a part time/freelance basis.

If you're paying 100k to Apple, that means you've made about $330k. If you're not making market rates with that, then you're doing something wrong. Not Apple.

You are making my point for me. 330k would be the gross revenue, and 230k is what apple would have actually paid me.

230k / 4 years = 57.5k a year 330k / 4 years = 82.5k a year

Perhaps you misread my comment as I'd be paying 100k just this year, but that is total I've paid.

If they're barely profitable, if they have employees, if they have to pay a lot of taxes in their countries.. Yes 30% is a pain in the ass. It's also a disincentive to anyone who'd rather start anything where they can get 100% instead of mobile apps.

I don't buy it. They know going into it what the split is. If it's that big of a disincentive, then there are other platforms they can develop for.

When you don't know whether you're going to break even- because you don't, since this is a risky field and app stores are not even free markets to begin with-, a 30% tax is a strong deterrent.

I imagine the tax comparison is part of why they wouldn't want to do it. As your app is more successful, you have to pay Apple more and suddenly this favor to indie developers feels like a tax on the successful. Rebates would be a good work around – we plebs are dumb like that.

But they already charge a percentage, it already is a tax, not a flat fee.

Honestly I don't think its going to do squat. For the majority of apps if I search I am bound to find an equal number of free apps or even lower priced apps.

So first we reduce the burden then find out that the big guys cut their prices because they can afford too. What is next, surcharging the big guys because its not fair? Really that is all this article is about, its not fair. Guess what, someone is going to come in under you and if they did implement tiered pricing why not farm off a bunch of subsidiaries? One per product to keep yourself under thresholds?

Ever since the start of the 30% take, people who have complained about it always sound like they have no experience on the business side of things. For that 30%, you get a canned marketplace, with all the financials and fiddly bits done for you (as you say). A 70% take as a producer of goods is very high for a manufacturer that doesn't own the distribution channel.

Also FTA: At $70K in net revenues per year, your spouse could be telling you to get a day job.

"Don't you want me to be happy, doing what I love?". I mean, if we're manufacturing convenient numbers to make an argument, let's also look at all the reasons why someone would want to be self-employed as a developer. :)

As an Australian developer, any sales to Australian customers include 10% GST (Goods and Services Tax).

Apple send a monthly GST report containing the amount of tax we need to pay for our Australian sales, which makes reporting super-easy.

Side note: Apple don't charge the tax on top of the price, so earning a 99c sale from a US customer (net revenue ~$0.70) is far more valuable than a 99c sale from an Australian customer ($0.63)

>A 70% take as a producer of goods is very high for a manufacturer that doesn't own the distribution channel.

Is there a competing distribution channel that iOS users are allowed to access? Or does the distributor lock producers into its channel? If the later, the distributor's take is completely arbitrary and can only be assumed to be selected so as to maximize the distributor's take of the producer's generated value.

Your argument falls apart given that the Play Store has the same split, and there are plenty of competing distribution channels on Android.

I don't see a coherent argument.

> there are plenty of competing distribution channels on Android.

Such as?

Amazon App store is the first that comes to mind, but IIRC most apps sold in asia are through non-google app stores

People forget that when the telcos were in charge, the split was 70/30 the other way, and with no transparency at all. You basically couldn't make money on an app. When Apple announced their price structure, it was a huuuge deal to everybody. That's why so many people retrained and retooled so fast.

All the services they provide don't justify the cost (30% of sales!) in any way. The only reason Apple is able to charge a fee so high is because they are the monopoly provider of apps for the most popular (or the richest) mobile platform.

Why should Apple justify the cost? They only need to provide the benefit (access to the overwhelming majority of iOS users) and let developers opt in or not.

and let developers opt in or not.

Your option is to leave a massive mobile phone platform or opt-in. It's really not much of a choice. As long as people keep giving Apple their money, developers will suffer. The situation is better (but not great) on Android where third party app stores are at least possible.

High fee ??? You should do some research, before Apples App store the split was often 30 % / 70 %. With the store taking the 70 %.

Prior to the App Store, indie software developers using turnkey online solutions from eSellerate, Kagi and others were typically only paying around 10% - and this included all the VAT/TAX handling for the EU and different US states.

The 30%/70% was for other digital storefronts, not direct sales through your own store. Kagi and the like are more akin to payment processors.

In other words comparing apples with oranges.

I'd be willing to bet you've never built a successful business that handles everything done by Apple in-house.

If you had, you'd already be doing everything yourself (and doing it better that Apple) and happily collecting more than 70%. Alternately, you'd have realized that beating this price is a major accomplishment and probably not the best use of your time, making the 30% is a pretty fair trade.

In either case, you would not be complaining.

Stea

Admittedly, Apple probably has an excellent rate negotiated with the Credit Card Processors. But if you were to sell something for $0.99 yourself, it'd be hard to beat what Apple offers.

Taking Stripe as an example, you'd be charged 2.9% of 99¢ PLUS a fixed 30¢ per transaction. That's about 32.9% you lose to the payment processor.

Apple bundles payments together to avoid this. It's complicated af.

I never claimed I could get such a rate myself, I'm just saying that if there was competition when it comes to app stores, the fee would likely be lower. I'm absolutely certain that big companies can get amazing rates for transactions, with no fixed fees. For instance, I can pay 1 penny (or whatever the minimum cost of an item would be, maybe 20 pence) with my credit card in Tesco or Sainsbury's, I'm pretty sure they're not loosing money by selling stuff to me.

I wouldn't be at all surprised if Tesco lost money selling you a 20 pence item by credit card. So few people make purchases like that that it will be easy to absorb the losses rather than taking the PR hit that comes with rejecting someone's attempt to pay you.

Think of it this way: for every 20p purchase, how many 100 pound+ purchases are there? Can the one cover the other?

There are competing app stores. Windows Phone is one, and Android has several. There isn't much difference in the fee.

Do you know how much it cost before Apple came in? It was about 70 to 80% that you gave the publishers. And that was if you were lucky to get accepted to develop apps. Which happened to only a few big companies.

Funny. When they launched, everyone was expecting it to be 50/50, and in fact Intel and Microsoft had announced or launched stores with that as the split but changed to 70/30 as soon as the App store came out. Some rivals even complained that Apple was using it's financial muscle to undercut them at below-market rates as a loss-leader, yet even then at the same time others were making the same complaint you are.

Bear in mind the App Store was losing money or barely breaking even for most of it's existence. It's only in the last few years it's begun to make significant profits. They've sunk billions into it. That hardly seems like the business plan of a gouger.

As for being a monopoly. That's like complaining that the shop down the road is a monopoly provider of products in their own store. There is no monoploy, you can always buy an Android, Symbian, Tizen, or even Windows Mobile phone.

Yes mobile app publishing was even worse before Apple, when you had to go through carriers etc. It was also largely irrelevant. The modern smartphone ecosystem has very little relation to that of Symbian and others.

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