Apple recently updated or, ahem, clarified a notion that they wanted 30% of everything sold through an iOS device.
- • They want 30% of the spend of every new customer that signs up through iOS.
- • They’re not interested in customers who sign up through other routes even if they buy stuff on iOS
- • This affects digital music, eBooks, eMags but not physical goods.
The justification is that if apple does the work in creating a platform that attracts you some new customers, then you have to give them something. After all, software developers are paying the platform tax so why shouldn’t producers of books, music and other digital products.
Letting you keep 100% of your custom gained through other channels is good news for Amazon who likely sign most people up through the web site anyway and already have a massive customer base. It’s bad news for Spotify because most people will be signing up through their iOS device. As the music labels don’t really like Spotify, this is probably a win-win for Apple (killing a subscription service) and the music labels (killing a service which makes them no money).
This is all about digital content, not physical goods. And again, software developers have to pay the piper so it’s not surprising that others have to. The old way of doing things in books and music (publishers, aggregators, distributors, retailers) is dead. As Jean-Louis Gassée tweeted:
Apple’s new rules rile. But not me: I’m the paying customer and I resent the old model. The new rules are customer-centric.
Don’t shed any tears for the middle-men in this story. The people who make all the money in the digital content business. It’s not the writers and artists who benefit, or even who lose out here. These guys should be taking this as an opportunity to break free an set themselves up in business. It’s the middle men whose margins are being shaved, who have made a fortune off the backs of creative folk, who are railing about the lack of customer information being provided – information they will sell, manipulate, put into a massive CRM system and spam the hell out of you with.
You’ll seldom go wrong betting on Apple doing something that’s good for Apple and good for its users — no matter what the ramifications for everyone else.
When I was making books, we had to get the costs below 20% of cover price just to break even. We’d sell to a distributor at 40% of cover price. They’d sell to a retailer at 60% of cover price. So out of a £10 book, we’d often just get £2 and out of that we’d have to cover art, layout, writing, printing and shipping. The high margins demanded by distributors and retailers was partly to pay for warehouse and shelf space and a little bit of shipping and the admin to wrap it all up. With digital content, the costs of storage, duplication and shipping are trending increasingly towards zero and they’re already in the order of pennies.
The people screaming about these changes are the middle men. Not content to take 80%+ of every creators money, they’re balking at giving 30% of that to Apple and even attempting to squeeze more percentage points out of writers and performers.
Yes, Apple made a dick move. But you, the consumer, are not the one being screwed. No more than you ever were at any rate.