Apple’s 30% cut is criminal, yet when Amazon took twice that no one cared

“When rumors of Apple’s typical 30/70 split (Apple/publisher) for an eBook store became too realistic to ignore, Amazon moved quickly to match the terms (though they didn’t quite do so, putting a few conditions in place),” Tom Reestman writes for The Small Wave.

Reestman writes, “Until then Amazon had been taking up to 70% and no one questioned it or cared… It’s hard to believe those claiming outrage aren’t primarily motivated by the fact that this is Apple, and any Apple headline is ‘news.’ Let’s face it, ‘Amazon’s 70% Cut is Evil and Publishers Will Perish’ is an article few would have read.”

Read more in the full article – recommended – here.

MacDailyNews Take: Not only that, but content publishers who use Apple’s subscription service in their app can also employ other methods for acquiring subscribers outside of the app. Publishers can still sell digital subscriptions on their web sites or they can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related articles:
U.S. DOJ, FTC antitrust enforcers consider investigating Apple over App Store subscription rules – February 18, 2011
Why Elle, Nylon and Popular Science said yes to Apple’s App Store subscription terms – February 17, 2011
App Store subscriptions: Apple’s on the side of the consumer yet again – February 17, 2011
Apple’s subscription rules cause some to utter ‘antitrust’ – February 16, 2011
App Store subscription terms for content providers to focus on the consumer – February 15, 2011
Apple’s App Store subscription rules cause concern at media companies – February 15, 2011
Apple debuts subscription service on the App Store; Steve Jobs: ‘Brand new opportunity’ for content publishers – February 15, 2011

38 Comments

  1. Apple is simply taking its place in the selling of content.
    They supply the server farm (very costly) and make it very easy to get that content.
    There isnt much of a story here, but that doesnt stop the classic ‘sky is falling’ stories we have to put up with from the locked-down, corporate-owned media.
    There arent any really independent new sites, are there?

  2. This actually isn’t fair to the publishers. It would be like Microsoft charging Apple 30% for every song that Apple sells on iTunes for Windows, just because Apple’s app happens to run on Windows.

    1. How is it not fair? I don’t get your point.

      Thing is, Apple is maintaining the server farms and dealing with the transactions. Also support from their server part of the deal. If your D/L goes bust Apple has to make it right. 30% seems quite fair to me.

      iQ

    2. There is nothing to stop anyone from making an “iTunes like” Software that runs on OS-x that does NOT use the Apples stores. In that case Apple would charge them 0%. Why because they are not using Apples App store.

      For example, lets say RIM had their own music store that they sold music from. And lets say they had an iTunes-like S/W program called iRIMMES that allowed them to purchase and stream these songs when installed on a OS-X computer or Windows computer or any other OS computer in the world. In that case Apple would NOT charge them anything. Why? Because iRIMMES would not be using the Apple store in any way whatsoever. Just like iTunes does not use Microsofts “infrastructure/ecosystem”. IRIMMES would be just a program running on OS-X….just like iTunes is a program running on Windows.

    3. I gather from your comment, you don’t seem to have much respect to those that have or those publishers that think otherwise.

      When you have made your mark as high as Murdock has, perhaps you can have The Daily publish why this isn’t fair to the publishers.

      In the meantime, perhaps you should peruse the The Daily’s official launch event from February 2, 2011.* You may learn something.

      *http://www.thedaily.com/launch

  3. Apple is an Internet retailer. Retailer discounts are typically 30 to 50 percent of list. Apple has chosen to stay on the low end of this range, which might be reasonable as they do not have to maintain a brick&motar store front.

    Amazon was requiring the typical distributor’s discount and selling the goods as an Internet retailer. When Apple decided to compete in the EBook marketplace as a retailer Amazon lowered its required discount to the retail level. Normally this action would be considered to be the expected result from competition.

    The reaponse by retailers who wanted to access Apple’s coroner base was to distribute a free application and redirect the purchases to their web site. This action is equivalent to Best Buy setting up a kiosk inside of Walmart to display their wares and directing purchases to the Best Buy store across the street.

    1. One really hopes there aren’t any “retailers who wanted to access Apple’s coroner base”. And, while coroners perform a very necessary service, one also hopes that Apple’s base focuses far beyond that group.
      :))

  4. Tom is correct. The whiners should just buy some Apple stock. Once they are a part-owner of a Western company, they will FINALY have some insight into the following:

    1) business
    2) job creation
    3) where that “tax revenue” comes from (people with, you know, good-paying jobs)
    4) capitalism

    Or maybe they *won’t* understand. Indignation at seeing *others* making money is the root cause of ideological certitude and the stupid things it can cause people to say.

  5. amazon still takes a 55% cut on actual books from publishers such as myself. AND I pay the shipping to Amazon which, depending on the size of the order, runs 50 cents to a dollar per book, depending on the size of the order. It is the same or worse with major book distributors.
    So 30% sounds damned reasonable to me. Sure, Apple does not have the hassle of handling actual books, but neither do I. Nor do I have to invest in inventory and storage. To the rest of the publishing industry I say, “stop whining.” this is a way better model than the old one.

    1. That’s not even the worst of it. In gram, the country’s largest book distributor, takes a whopping 60%. you pay the postage. Then you get “returns”, often in huge numbers. These are books that went out to stores, did not sell, and are returned for credit. They are often scuffed, dented, or bent beyond salability. Guess who’s pay the postage for the returns? Not to mention the grunt work of packing, unpacking, sorting resaleable ones from junk, swearing, drinking, etc. It adds up. So the 60% discount is just the beginning.
      Compare that to 30%, no publisher cost, no storage, no investment in inventory, no shipping or handling, no returns. You do the math.

  6. Reading through many articles on the subject I noticed a few things:

    1) Apple haters seem to be REALLy enraged about this, you know people who don’t actually use Apple products.

    2) in 2010 iOS took 82.7% of the revenue from PAID Apps. Android took 4.7%. So those enraged Android users don’t actually BUY apps….
    Developers who are screaming at Apple take note of this. Go android if you want but the cheapskates there don’t actually spend money.
    This also shows that Apple has spent a lot of time and effort to build an eco system conducive for developer sales (i.e they’ve built a prime retail location. In real life Prime retail spots are worth more than bad ones, think Madison 5th Ave).

    3) Google says that they are going to charge less than Apple BUT as WSJ points out “Google has also proposed giving publishers certain personal data about app buyers to help with marketing”. Traditionally publishers have used this data mining to help advertisers AND sell them to third parties (telemarketers, junk mailers). That’s why magazine subscriptions are so cheap because the personal data is very valuable to them. When publishers got your subscriptions and personal data traditionally you don’t have a privacy clause plus legalities is muted as it is done by DISTRIBUTION companies who handling subscriptions (how exactly Google is handling this saying they will pass personal info to publishers I’m not sure). Apple has a dialog box which you can tick to refuse your personal data being given to publishers. If people curse Apple and go Android beware who knows your personal data and the stuff you subscribe to…

    (Please note I’m not supporting things be more expensive on Apple than Android: I’ve been flamed on this. But I’m just pointing out a few facts that not many have looked at.)

    1. I’m sure that since Android is going to simply obliterate Apple this year and since Google has such a WONDERFUL plan for everyone, especially the publishers, this will all be forgotten in a matter of months.

      At least that’s they keep saying.

  7. Too many iHating pricks that bitch and moan no matter what Apple does. If it wasn’t for Apple, the e-subscription industry wouldn’t be as far as it is today. Amazon did a fine job and had their share of problems, too. However, I don’t remember anyone calling the FTC or DOJ to be looking in on them when they almost had the entire market for themselves. It’s not like anyone is forcing people to use iOS for magazine subscriptions. They can go to any number of platforms. If they want to use Google’s subscription system, that’s up to content providers and consumers.

    It seems similar moaning and groaning happened when iTunes first came on the scene. It’s up to consumers to decide if the service is good enough for them. There are factions of bloggers out there that will throw up some red flag as long as Steve Jobs or Apple is mentioned. Man, those people are pains in the ass for Apple.

    Amazon got away with charging more because nobody seems to give a damn about Amazon or Jeff Bezos. Amazon’s share price isn’t as high as it is because they’re giving sh!t away. They’re charging what the market can bear. I always say if you don’t like something, don’t patronize it. Shut the hell up and go elsewhere. If nobody buys, the company will have to change its policy to stay in business. If the publishers think they’re gonna get rich from Google’s service, then more power to them. Everyone thinks Google’s so damn perfect like some charitable organization and sh!t.

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