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Apple Raises E-book Prices For Everyone
Nom du Keyboard writes "I was informed by my publisher this week that they would have to raise my e-book prices because they planned to sell them through the Apple iBooks store. How could this happen? A lot of my individual stories sell in the $1 to $3 range, which is well within the impulse purchase amount for many people. In this price range a 50-cent price difference may well be the difference between a purchase and a pass. Meanwhile, Apple is touting its new 'agency model,' whereby the publishers set the prices. However, it seems that Apple requires books sold in its iBook store have prices ending in .99 — nothing else." (More below.)
"Furthermore, Apple requires that if you sell books through them that you absolutely cannot sell them for less through anyone else. To my understanding Amazon also requires this, so Apple and Amazon prices should be identical in the future, but Amazon doesn't force prices to end in .99. What this means is that an e-book that the author was quite happy to sell for $2.29 or $2.49 is now going to cost $2.99 from everybody. While that sounds like only a few extra cents, it adds up over time and can lead to resentment against authors for charging higher prices, even though they have little real control over pricing. I, for one, do not understand why Apple computers only understand numbers ending in .99, or just how Apple is making it better for the consumer this way."
I thought we'd all be used to spending more money for the same thing because Jobs slapped his gay little Apple logo on it.
Because you obviously couldn't charge $1.99 for that book both places?
"He's lost in a 'floyd hole"
Almost all my ebooks come from Baen. They may cost a little more, but they are 100% free of Apple-style dickery, including DRM.
"Prefiero morir de pie que vivir siempre arrodillado!"
I'm really beginning to hate Apple. I'm in the process of putting together a manuscript and I would not agree to have it put in the Apple store just on this issue.
"There is a way that seems right to a man, but its end is the way of death." Proverbs 16:25 (NKJV)
See, whenever there is a book transaction, a few cents go into a bank account. They're shaved off as a remainder. Initech will never know it's missi.. oh wait.
Yeah, this sucks.
Which makes no sense to me. Apple gets to keep all of those pennies...
It sounds like the problem is really between you and your publisher, not between you and Apple. It may be time for you to find a publisher that shares your position on the situation, because it doesn't sound like your publisher does.
This is ridiculous , you perfectly know how Apple operates, so either conform to their wish or say to hell with you Jobs, I am taking my business elsewhere.
for the last time people, I am "frodo from middle eaRTH", not "middle eaST".
I, for one, do not understand why Apple computers only understand numbers ending in .99, or just how Apple is making it better for the consumer this way.
Two thoughts come to mind:
1) Possibly, it's just for uniformity sake. When all the prices end in the same digits it might appear to Jobs that it looks cleaner in the store app?
2) It could also be to prevent snowballing pricing wars (thus keeping the costs of e-books somewhat buoyant which doesn't help the consumer at all). For example, publisher A lists a book for $1.99; publisher B lists a similar competing book for $1.97; publisher A strikes back pricing their book at $1.89, etc. This behavior is discouraged, if the publisher has to drop the books price by $1.00 when the price is only $1.99.
Except that 30% is actually really low.
now its 42.99 according to jobs.
I truly hate the .99 gimick. I actually wish they'd roll tax into the prices so what you see on the label is what you pay and its a nice round number $X.10 $X.20 $X.50 $X.00. Worse is the stupid gas stations with 9/10's of a cent. Why is it they can charge a fraction of a penny you can't possibly pay, ensuring they skim 10ths of a cent gazillions of times. I think they did that in Superman III or something. How is it after all these years, they're still stealing money?
You're blaming Apple for your publisher raising prices even though you admit it's the publisher setting the price?
However, it seems...To my understanding...
It seems like maybe you're hearing things kinda third-hand and sorta don't have direct knowledge of what might be going on between Apple and your publisher, doncha think?
I live ze unknown. I love ze unknown. I am ze unknown.
About the only reason to sell through iBooks is that Apple is very good at marketing and riding on Apple coat tails could increase sales. The fear, as I get from the submission, is no one would buy any of these books if read some of it first, so the only hope is to sell it so cheaply that people will just read it, and not feel ripped off when they find out it is crap. The solution, then, is obvious. Write book that people are willing to pay for.
So it is not Apples fault or Amazons fault that the price is going up. There is no reason at all for anyone to sell books through them, except that Amazon, and soon Apple, are going to be selling a lot of books and both have already set up infrastructure and pay for advertising that is unfeasible for most authors. But that only matters to authors who want to sell a lot of crap. For the author in question, who obviously cares much more about the fact that Apple is out to rip off the public rather than volume sales, I think DRM free ebooks or Apps is the answer.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
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I, for one, do not understand why Apple computers only understand numbers ending in .99...
It's a math fixation... row one, column two. Mind you I don't get it either ln(2*pi) is much more challenging.
Only to idiots, are orders laws.
-- Henning von Tresckow
... but I'm genuinely interested: What exactly does a publisher of e-books "publish"?
I'm serious. You've written the book, you've put it in whatever form you decided on. I understand that you need some vehicle to distribute it -- isn't that what Apple and Amazon are doing? So what is your publisher doing? What value does he/she/it add?
The Mongrel Dogs Who Teach
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A 30% flat rate is really cheap, considering you don't have so set up and maintain distribution yourself, and that you are going to reach 80 million potential customers.
I still cannot find the droids I am looking for...
If you don't like Apple's censorship and their tight grip on their devices and marketplace, DON'T BUY FROM THEM.
"Furthermore, Apple requires that if you sell books through them that you absolutely cannot sell them for less through anyone else.
Uh....
'Political power grows out of the barrel of a gun.' - Mao Tse-tung
If so, take the money and run.
RIP America
July 4, 1776 - September 11, 2001
Suppose Amazon started pricing all their books at $N.98? Remember, you can't sell your books for less on Amazon than on iBooks.
Sounds to me like Apple and/or Amazon are your publishers. Whomever it is you're talking to? I think they're just taking your money in return for, well, talking to you.
If you were blocking sigs, you wouldn't have to read this.
What this means is that an eBook that the author was quite happy to sell for $2.29 or $2.49 is now going to cost you $2.99 from everybody.
Or it could make the book $1.99, right? Why is there an automatic round up? I don't see how this is really Apple's fault. Your publisher has the option to make it any dollar amount they want it to be, but they're choosing to make it cost more for the consumer, and they're using Apple as a scapegoat for it. How about this - everything that's over 2.50 gets rounded up to 2.99 and everything under 2.50 gets rounded down to 1.99 and split the difference? It's not like the means of production are any indication of price anymore. In the online world, it's practically ALL profit, and by putting their books on the Apple bookstore, they now have an extra 20 million potential customers. I'll just chalk this price increase to the continued greed of the publishing industry.
Don't trust a bull's horn, a doberman's tooth, a runaway horse or me.
since that .99 thing doesn't appear to apply outside the US
Seriously, will this .99 and .95 thing ever die? Does anybody really look at a price-tag that says $4.99 and not just think in their head "$5"?
Do marketers really think people haven't figured out that 2.99 is three dollars? Are they right?
-Lod
which means the developer would get $700,000 without the requirements of setting up distribution and to a large extent marketing. Clearly you've never run a business and had to pay for sales, marketing, advertising and distribution expenses.
30% for built in exposure to 80 million potential customer and application distribution is actually pretty cheap. Plus it's a flat pay-as-you-go situation. Generally you have to pay for marketing sales and distribution channels up from and hope you make enough to cover your costs.
Personally I don't like Apple's schizophrenic approval process, but the model is brilliant.
I still cannot find the droids I am looking for...
Compared to a web site hosting an installable .exe file? Really? I don't believe you.
Buying a physical copy of a book, downloading the text version from IRC, and reading the physical if I feel like or reading the text on my no DRM Chinese 7" Chuwi media player that has a great ebook reader application for it. Then when I'm done with the book I can give it to someone else to read.
OK. You write an app and put it on a webserver set up to take credit cards, pay-pal,etc, and charge $1.99 for it (as in you have to charge their card before they download it). I'll write a similar app and put it in the App store for $1.99. I guarantee you I'll make way more money than you even with the 30%.
I still cannot find the droids I am looking for...
Their higher prices and more limited availability will prevent you from spending so much on eBooks (or any other kind, for that matter.)
I was a sinner once, buying an entire series at once if one book looked interesting. Spending as much as $50/week on eBooks and thinking nothing of it, as I rejoiced in the comfort of knowing I'd never run out of things to read.
Now, after HarperCollins, Penguin, and other major publishers have pulled out of Fictionwise, I've spent maybe $20 on eBooks (other than Baen) in the past month. My budget can go to elsewhere, and my addiction is under control.
[ecstatic scream] Thank you, oh publishers. Thank you for shrinking my urge to buy your books to something I can manage! [/ecstatic scream]
I despise the fact that you are totally correct. Whatever else apple is guilty of, they made a brilliant play with the app store.
We could argue all day about 30% and how that applies to a website rather than a physical store, and how that relates to current consignment sales systems in the real world. However, doing so is just nitpicking. I personally believe that 30% for what apple is offering is a bit much. It's about 3x more than typical systems for similar services online. But then, apples store is considerably "better" than most. For varying definitions of better. Market exposure is huge, clutter is fairly low, and the entire support and sales structure is handled by apple. So... better, than most.
In the parent post it says the author did some trials and found out $2.49 was the price where he made the most profit. At a lower price, enough new customers weren't created to offset that lower price. A higher price caused customers to chose not to buy. Profit was optimized. So selling at $1.99 means forgoing revenue, as would selling at $2.99. Now if parent didn't say they had experimented with pricing, either pricing higher or lower could end up creating more revenue.
http://en.wikipedia.org/wiki/Price_elasticity_of_demand
Seriously, will this .99 and .95 thing ever die? Does anybody really look at a price-tag that says $4.99 and not just think in their head "$5"?
Quite the opposite: a lot of people think $4. That's the whole point.
http://en.wikipedia.org/wiki/Psychological_pricing
I've caught friends doing this on a few occasions, and when I call them on it they do a sheepish "oh, yeah". :)
and they hate that.
On the iPod they had no competition when selling content so they sold inferior content for higher prices then their competitors (who sold 192Kbps for $0.79, but never got far cause they couldn't license Apple's DRM).
They won't be able to repeat that trick for eBooks but their is a solution that allows them to avoid competing and continue selling things at Apple high prices: force the other retailers to raise their prices to Apple's levels. They can do this because of their clout and the new U.S. law that allows the publishers to enforce the recommended sales price. Actually, the publishers didn't mind and are happy to enforce the higher price now that they have a powerful ally.
This is primarily aimed at Amazon (though smaller publishers and consumers get hurt, of course) who could have competed on the iPad. Now, with everyone selling books on the iPad at the same price users are very likely to choose Apple because of the ease and the integration.
(If you think you detect some dislike of Apple, you are right. I have no personal interest in any of this, but I have grown increasingly disgusted by this company.)
Before I answer the question about the $x.99 pricing, let me address another logical fallacy. Apple is not raising prices for EVERYONE. Apple is raising prices for those publishers and/or authors who choose to use Apples service, and who choose not to lower their prices instead of raise them. Now, on the the $x.99. I don't work for Apple, so can only speculate. But don't think of it as prices that end in $0.99. Think of it as their iTunes connect app management pages refer to it, as tiers. You see, by limiting the amount of possible prices, they are able to set and keep set consistent pricing across the world, where currencies are not the same. $1.99 USD may be 1.45 currency X dollars one day and 1.56 currency X dollars the next day. Of course, they could always display the prices in the native currency of the content provider like Android does. Nobody ever complains about having to run to a currency converter program to figure out exactly how much they are paying for the latest and greatest fart app, right? The fact is, Apple has that pricing structure for a very sound, well thought out reason. One that benefits consumers in a way that competitors like Android fail them. It's why Apple has the market share that they do, and why you are all riled up that you have to play by their rules. You could very easily not publish on Apple platforms, but you want the market share. The market share that the very things you complain about help to build.
So selling at $1.99 means forgoing revenue...
selling at $1.99 in one market place.
I've worked for a large software company and we used to analyze this all the time. It is exceedingly difficult to account for all the variables. Did he, for example control for seasonality? Did he try to calculate if the potential additional sales from another marketplace would offset or erase the potential loss?
Obviously if he simply lowered the price in the Amazon store (my assumption) he would leave money on the table based on the information provided. But that is not the case we are discussing. I am suggesting that a simultaneous lowering of price and availability in another large marketplace might offset the price reduction and even net him more revenue. just a thought, hence my use of the word might above.
Regardless, you'd think that would be an analysis he would perform before posting.
I still cannot find the droids I am looking for...
Try it again.
You put up a website, how are people going to find it? You need to pay for marketing. Meanwhile, millions of people visit the iTunes App Store every day, without any effort from you. There's also the issue of trust - you have to convince people to install a .exe file from some random website, while the App Store is a trusted source.
... and then they built the supercollider.
The only "advantage" the iPad has in terms of more ways to buy books is that, since it can run different vendors e-bookstore apps, you have more ways to buy DRM-laden books from competing vendors.
But you can also take the DRM free PDF files and use them in either the Kindle app, or iBooks, or actually a ton of other offline readers.
One big advantage the iPad has going for it is a very diverse array of readers.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
And Apple would never stop you from putting your app on the App Store simply because it steps on their plans to control their platform, right?
Mmmm sounds an awful lot like price fixing, or as it is sometimes known anti-competitive acts, which is illegal (supposedly) where I live.
The tyrant will always find a pretext for his tyranny - Aesop
Ever consider that it might not be price that's limiting your sales?
September 2011: Looking for Cocoa/iOS work in Boston area Cocoa Programmer Quincy, MA
I am suggesting that a simultaneous lowering of price and availability in another large marketplace might offset the price reduction and even net him more revenue
Does not equal
Lower the price only in one store and keep the same price in the other
I see that you also accuse the GP of failing to comprehend what they read. Please check your irony meter before using the caps lock next time, or you may be denied capitalization service in the future.
Like who? Handango for example are one of the main resellers of mobile apps for Symbian, Android Blackberry etc. They take 40%.
If that's all Apple were doing, then you'd have a point. But it's not all they are doing.
Your comment is like comparing putting a table outside with a stack of books on it and a sign saying "please take one", to a real book shop that sells books.
I believe parent's point is that lowering the price in the Amazon marketplace will necessarily leave money on the table. That is a separate issue to whether higher revenue in another marketplace may make up for the lost revenue in the first.
But it is only because of this "most favored nation" clause in the Apple, and now possibly Amazon sales contract that will necessitate him to forgo revenue he could have otherwise picked up in the Amazon marketplace, because he choses to sell in the Apple marketplace at a lower price.
I believe you deserve a fail also for deeper critical thinking.
I see the "Let's place an ad in the New York Times and we'll be rich because SO MANY PEOPLE READ IT" fallacy made it to the net intact.
Your "exposure" to 80 million customers is bogus. There are tens of thousands of apps - how many people are going to see YOUR app?
And the more apps in the closed store, the less that being in that closed store is worth.
Think of it - if everybody had 10,000 friends on facebook, it would become even more useless than it already is. You'd have to filter out 99% of it somehow.
Network effects don't scale when the amount of time a person has doesn't scale.
If it's such a great model, and the best way to get your apps sold, then why is Apple afraid to let people install stuff from outside the App Store? They should welcome inefficient competition as a way of demonstrating their superior approach - except that, like any pyramid scheme, it's only superior for those at the top.
I am suggesting that a simultaneous lowering of price and availability in another large marketplace might offset the price reduction and even net him more revenue.
If i read what he was trying to say, I think he was more suggesting to lower the price to $1.99 in both market places. Even though lowering the price on Amazon netted less profits, even though more copies were sold, though not enough to offset the price reduction. By adding the additional, possibly larger market place, this price reduction could net more sales and be maybe more overall revenue.
You'd probably be wrong. You're competing for attention with tens of thousands of others in a limited store. The other person has the entire world to work with. Plus the freedom to develop their app using any technology they want - like flash, for example. It worked for youtube ...
They also have the opportunity to sell it as a service, and to continually add new features to grow the customer base. YOU, on the other hand, are competing in a market where everyone is either free or 99 cents to "get market share." Adding new features? Let us know how customers feel about being charged for their updates.
As many have said, "If you don't like it, don't buy it."
Which is why I don't buy Apple products. I like their products, but I hate assholes like Jobs. Maybe once he is gone and IF their company policies change at that time, I will reopen that option.
There's no need to guess. Developers who have applications on multiple mobile platforms know they make far more money from the iPhone.
As a teacher I know that my students sure don't read scarcely anything.
Do you remember limits in your study of math?
Let us assume the number of readers is rapidly approaching zero.
The effect on prices of books is clear:
Each book will approach the price point of precisely $ infinity.99
Help end the use of Sigs. Tomorrow
I wonder if the market is going to change now that there's another player in it? Hmmm...time for another experiment!
Or just whining on /.
Whatever.
Why yes, I AM a rocket scientist!
This wasn't even some crazy coup by Steve Jobs, it's in fact actually the standard publisher price. I heard the business model on Fresh Air this week and it's quite interesting.
Amazon has been taking a loss on almost every new ebook in their store. They did this to gain marketshare (they have about 80% of the ebook market) and hoped to make up the difference on kindles. The publishers feared that Amazon would demand lower prices from them over time since they have a huge marketshare and because Amazon wants to drive sales of kindles. Amazon is also trying to cut the publishers out by providing publishing services for books. The old publishers hate Amazon right now.
Along comes Apple and the iPad, and Steve basically made an agreement with publishers that they like. Steve doesn't compete on price, he competes with flash and glamour, and does to very well. The publishers in fact like the fact that there's more competition now, and that Apple has agreed to, for one year, a price structure favorable to what they want. Now Amazon will lose marketshare and be in a less favorable negotiating position and publishers can increase their prices again.
Yes Apple did agree to this, but besides the .99 thing, Steve could care less about the true price of the book. The price increases came from the publishers directly.
It's the 4/29/10 podcast of Fresh Air on NPR, check it out.
"All great wisdom is contained in .signature files"
Isn't corporations collaborating to fix prices in the free market an offense?
Well, if I have a well written app that serves a particular niche that isn't too crowded, then potentially a lot of people. If I have a 99 cent fart app or a tip calculator, then not probably not many.
I still cannot find the droids I am looking for...
Really? When most developers are complaining that they can't make a profit because they have to compete with the free and $0.99 stuff? Most developers are LOSING money on the iPhone. And with 100,000 competitors all trying to crowd on that same tiny screen, people have mostly gone from "We'll make money off it" to "We'll consider it advertising".
And the same thing will happen to the iPad.
The problem is that the App Store isn't a marketplace - it's a monopoly, so the regular market rules don't apply. Also, the locked-in market, despite what Apple wants to claim, is CHEAP. Because the market itself is "throw-away". The same people who will pay $50-$70 for a pc or console game, or $15/month for a game subscription, won't pay $10 for a phone app. Because of the smaller, crappy screen, crappy sound, crappy controls, the perceived value just isn't there.
It's a niche market, and with 8,000 new apps being added every week, a totally polluted one.
Here, let me fix that ... Well, if I have a well written app that serves a particular niche that isn't too crowded, then potentially a few people.
It's a niche market. Niche == few people.
And people who own iPhones are cheap. The same person who won't blink t spend $60 on a console game will not spend $30 for the same game on a crappy platform - and that's what the iPhone is compared to a laptop, a pc, or a console hooked up to a big screen - lousy graphics, lousy sound, lousy controls. Fine for a phone, lousy for games, and forget things like a spreadsheet.
True, but selling it at $1.99 is almost definitely guaranteed to bring in more money than selling it at $2.99 in this situation. (Barring the case that selling it at $1.99 brings in fewer customers than selling it at $2.49 would, which is always a possibility.)
Yes, $1.99 means you're forgoing revenue relative to $2.49, but given the options you're now restricted to, dropping the price is still probably optimal versus raising it.
tl;dr: This example was bad and you should feel bad. :-)
Or Apple could allow prices ending in things other than .99.
This is not the funny you're looking for.
Ahem.
True, but selling it at $1.99 is almost definitely guaranteed to bring in more money than selling it at $2.99 in this situation. (Barring the case that selling it at $1.99 brings in fewer customers than selling it at $2.49 would, which is always a possibility.)
No. One trivial example would be when your costs are, say, 2.00. Then you're losing money at 1.99. Still, let's say the total costs per per-unit are 0.99 (a constant value is actually the worst case, as the weight of fixed part of costs drops with the increase in sales) so 1.99 is profitable. Now, profit per unit at 2.99 is twice that at 1.99, so you need to get twice as many customers at the lower price to get the same amount of profit. Considering price scaling of fixed costs, you'll need less than 2x the number of customers, but still the difference is non-zero. OTOH, there is in practice a cut-off in the number of people that are willing to buy your book at any price and it may be that you're selling enough 2.99 books already that dropping the price to 1.99 would need more sales than that cut-off in order to make the same profit. So there is in practice no guarantee of 'more money'. Otherwise you'd just keep on dropping prices to marginal cost + 1 and reap profits from billions of billions of sales.
Point is, it's entirely possible for you to have the maximum profit at 2.49 and have both 2.99 and 1.99 bring in less money. Not all functions are monotonic, and all that jazz.
It's amazing.
Add free-market competition, and prices go up!
That's Jedi-master-level RDF skill.
Steve is using the old marketing trick where people perceive *.99 as a deal. This isn't a new tactic, tho forcing it onto once suppliers is im sure.
"look its not a buck its 99 cents", and many people are wired to fall for it.
---- Booth was a patriot ----
Like who? Handango for example are one of the main resellers of mobile apps for Symbian, Android Blackberry etc. They take 40%.
Not to mention the carriers, if you want to accept payment by SMS billing.. many of them take over 45% at the bottom end. This purely for payment processing, no other services. They also hold your funds for 90-180 days, and likely earn interest on it all the while.
And the same thing will happen to the iPad.
The same people who will pay $50-$70 for a pc or console game, or $15/month for a game subscription, won't pay $10 for a phone app. Because of the smaller, crappy screen, crappy sound, crappy controls, the perceived value just isn't there.
Isn't that a bit self-contradicting? People regularly pay $30-40 for DS/PSP/etc games.. how is the iPad any different? Yes, some control mechanisms won't translate well. So some game studios won't be able to port the same codebase they've been pushing to every new portable since Game Gear. Oh noes.
um.. I think the point is that since they are gift cards, and you probably won't ask your family/wife/husband/dog for a $25.74 gift card.
25 * $0.99 = $24.75. There's nothing to buy for 25 cents on iTunes, so Apple likely ends up with a @#$@load of unused gift cards with ~25 cents on them. Free money.
Eh, the point I was just attempting to make (and yes, I forgot about the situation of costs here, but since we're talking about e-books here, the cost is essentially a one-time fixed cost and therefore tends towards zero as the number of items sold increases) was that $1.99 should be more profitable than $2.99 more often than not, given that $2.49 has been ruled out (but sold 50% more product than $2.99 did when it was an option).
Or: in the long run, the sale of digital goods at any price is always profitable given sufficient demand. (Again, not always true, I know. Selling it at a single cent probably won't cover your bandwidth costs.) This is because of the (not complete, but nearly so) elimination of per-unit costs in favor of a single fixed cost.
The iPad is a terrible gaming platform - several times the price of a console, shitty display for games and videos (the "hi-def video stream" is down-scaled to 1990s 1024x576 because the ipad simply can't push more pixels with any sort of motion), not portable enough for school kids to shove in their pockets, not big enough to compete with a real console hooked up to the TV. Neither fish nor fowl ... my gawd - it's a frigging SPORK!
In other words, combining the best features of two devices sometimes produces overpriced junk.
Perhaps they are just trying to save storage space? Storing a price as a floating point would require 4 bytes. But if you store full dollars and cents as a separate (single) bytes you only need two (and who would buy electronic book for over 250$). With such a simple change we saved half of the space! But still we can get more: if we set the cents number to a fixed value, we get to cut another byte from storage. Now we need 4 TIMES less space to store the price!
1. The ebook market as it is today is doomed. Too fragmented, and overpriced compared to print. At least with print, I can pass it on, resell it, etc. ebooks? The price will trend down over time towards the incremental cost of producing a copy - which is pretty much $0.
2. The barrier to entry for advertising in the New York Times is the cost of a classified ad. That's not that high.
3.
Then how come almost everyone is losing money? How come the "sector of the market that has money" is complaining about apps being over-priced at $4.99 when game console owners - who pay less for their console than you do for an iphone or ipad - don't bitch about paying multiples of that?
The fact of the matter is that most Apple App Store customers are cheap. Let me rephrase that - most Apple App Store customers are CHEAP! $0.00 to $0.99 is their price point, because they see the phone itself as disposable. It's a phone. When the battery craps out, it's history, it's a disposable product, and the competition already has better stuff out than the leaked G4.
I think you're hearing from a different class of developer from I am. Two classes of developer:
1) The programmer who throws an app together, spends nothing on it but his own time, then uploads it on the app store.
2) The developer who designs an app before he starts, employs the services of a talented graphic designer for the artwork, has a website which is every bit as well designed as the app, and who actively markets the app.
There are plenty of developers making a lot of money on the app store, and plenty making small change. The difference is not luck.
Now, the developers who release the same app on multiple mobile platforms are more likely to come from the second group. And they will all tell you that there is far more money to be made on the iPhone than any other mobile platform.
Well, ALL my books are DRM free, because I buy them from a bookstore. No batteries needed. And who knows, if I am buried under an exploding volcano, some part of my bookcase might survive and provide researchers form the future with valuable insights in our society.
Future researcher: "God, what a bunch of weirdos".
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Pennies add up. But to be fair, ALL those fake currencies are a huge scam and everyone does it.
MS, Nintendo and Sony, neither of them allow you to buy online with ordinary money, to scam people with left over credit and fake ideas about how much something costs.
At least EA allows you to buy the exact amount of points you need, but still, why the point system at all? Only reason to make you think it costs less then it really does.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
You're forgetting the transaction charges for credit cards/paypal. You're forgetting the cost of aquiring/developing/setting up your ecommerce system. You're forgetting that when your sales are already good on the App Store, the appearance on best seller lists pushes your sales into high gear. You're forgetting the time taken to set up your own registration number scheme or whatever other form of rights management you do. You're forgetting all the time that you would otherwise spend looking up users registration codes that they've lost. There's no such thing as 100 cents on the dollar.
But the main thing that you're forgetting is that the one stop, easy route to purchase of the App Store means that you will sell orders of magnitude more copies on the App Store than you would from selling mobile apps from your own store. 70% of 50,000 downloads is a lot more money than 100% of 500 downloads.
Yes, I have been there and done that. You haven't.
I, for one, do not understand [...] just how Apple is making it better for the consumer this way."
Well, there's your problem. Apple's goal isn't to make things better for the consumer, it's to make money.
rooooar
The .99 ending only might be because iTunes is present in so many different countries, each with their own currency. What in the US is priced at $1, is in Denmark priced at kr. 6. Amazon on the other hand uses the actualy exchange rate to give a price in different currencies, which gives very odd prices in any other currency than the intended. Im guessing that Apple uses a simple formula for currency exchange in 1-dollar intervals, for simplicity with other currencies. So if there's a currency that's something like $1 = 0.7, an item that costs $1.50 would cost 1.05 in this other currency (Ignoring ending the price on a 9). And something that would cost $1.30 would cost 0.91.
So to conclude: Pricing in $1 intervals makes it simpler for Apple to make round prices in other currencies.
AI: When 'Lawyer == Lier' returns true.
I may be wrong, but isn't it your choice whether or not to distribute your book thorugh Apple? If you don't like their terms or pricing model, don't sell through their store. Seems pretty simple to me.
In the parent post it says the author did some trials and found out $2.49 was the price where he made the most profit. At a lower price, enough new customers weren't created to offset that lower price. A higher price caused customers to chose not to buy. Profit was optimized. So selling at $1.99 means forgoing revenue, as would selling at $2.99. Now if parent didn't say they had experimented with pricing, either pricing higher or lower could end up creating more revenue.
If only it weren't mandatory to sell on the Apple store. Oh wait, it isn't, and he can keep selling as he is now. Seriously, this guy is bitching because he wants to add another retailer, but doesn't like their rules - DON'T FUCKING ADD THEM THEN.
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Can anyone who IS a lawyer remind us how the competition authorities (at least west of the Atlantic) might respond to a complaint about the effect on e-Book prices of this concerted agreement? For instance elsewhere it is being suggested that two airlines might have been wrong to coordinate their (supplementary) transatlantic pricing models informally, even though other airlines were not involved. What, in principle, is the difference?
You can't really consider taking your book and making it into an app as a viable distribution mechanism. You have no guarantee it will be accepted for one thing (Apple has serious content restrictions in place and the only place you can sell an app is through their app store). And even if it is, Apple has forced authors to edit the content (removing swear words for instance), so it may not be your book anymore. Add to that the cost of developing the app in the first place, and it's only really worth it for large, safe authors that have a solid chance of not hitting a random Apple wall or a smaller publisher who is also a programmer that likes to mess about and won't be crushed when the app is rejected.
Portable versions of Firefox, GIMP, LibreOffice, etc
Since when do they add up to more than a couple of percent? Or if you live in a more advanced country with a modern banking system, you can just have the money emailed to you. No need for either party to use paypal or a credit card. Or you can accept checks and money orders. People still accept checks. I'm sending one off Monday to pay for some domains I registered.
Domain name $10. Hosting - look around, there are TONS of cheap hosts out there. And plenty of open-source systems. Pick one. If you find that all too daunting, you're on the wrong site.
But for someone starting out, that is not the case. And everyone has to start somewhere.
Some php and one sql statement. Come on. Really.
Riiight .... like that problem hasn't been solved a million times with lost passwords and user names. OMG - I must be from the future!!! Or you're from 1980.
95 cents on the dollar is better by far than 70 cents on the dollar. Especially since you can decide WHAT to put up on the site, and you need it anyway, to promote tha App, because just sticking it in the App store isn't going to make it a winner all by itself. So you already have the costs for the domain name and hosting, etc.
Oh yes ... and 50,000 free downloads puts lots of money in your pocket ("We'll make it up in volume. We'll sell a silver version for $0.99. And a gold version for $1.99. And a platinum version for $2.99. We'll add some code that calls a premium phone number in the background at $10 a call!" - which, btw, one app did)
Show me ANY proof the average App store app is making money. Because that's what this thread is about - that the App store doesn't make the average developer a profit. You know, [citation needed]. And while you're at it, show some stats on the number of developers who managed to get their numbers up without having anything except a place in the App store - no outside marketing, no web site, nothing but "I put my app in the app store and now I has cheeseburger". Somehow, I doubt that's the average experience.
"Apple requires books sold in its iBook store have prices ending in .99 — nothing else."
This reminds me of that scene in Bananas when the dictator requires citizens to change their underwear twice a day - and underwear is to be worn on the outside, so he can check.
Someone at Apple had better stage an intervention soon. Jobs need professional help.
`Perche non reggi tu, o sacra fame de l'oro,l'appetito de' mortali?'
Be careful though - because the lamer "knows what they're talking about because they're a "subscriber to Windows IT Pro magazine". You might have to buy a new keyboard.
Sock puppets just don't like the truth. "One or two viruses a month" is a fail. Then again, so is claiming expertise based on "subscribing to Windows IT Pro magazine". Everyone come on over and join the fun - this guy is so lame it's a hoot.
Since ALWAYS. If you are a small merchant - what you are talking about here - then the bank will not deal with you directly to allow you to take credit card payments. You need to go through services such as Worldpay or Paypal. Paypal for example will start you out at 2.9% + 30c per transaction. For a 99c app, that's already more than the App Store charges.
These naive comments all single you out as someone who has never done this stuff. They are a fact of life for the indie software developer, and their cost (in money or time - which amounts to the same thing) is far greater than you imagine.
You show me proof that they don't. In fact show me proof that theaverage high street store makes money. It's a trollish request by someonewho's already demonstrated he knows nothing about this business.
Which I've already covered. No one ever said Apple's 30% is to cover your marketing too. Serious developers market their own products. Whatever boost they get from the App Store is on top.
Two last points.
1) For developers that get their software into bricks and mortar stores, guess what percentage they lose? Well on a average $30-$50 product, they'll net about $1-$2. In other words, they are losing >95% of the retail price of the software. You didn't know that did you.
2) Finally, not sure if I said this before. every developer that is in the mobile software business is very happy with Apple's 30%. They know it's a bargain. It's just idle posters who don't know the business, like you that seem to think otherwise. You're wrong.
Anyway, talking to someone who both doesn't know about the topic, and is immune to learning anything from someone who does know is fairly pointless. So I can't see much point in continuing with this waste of time.
In the parent post it says the author did some trials and found out $2.49 was the price where he made the most profit.
Which parent post? All I see is a section called "A hypothetical", meaning that the author didn't do any experiments. Also, on a similar note, I was talking to an iPhone developer recently. He did some experiments with pricing his iPhone apps. He said that raising the price of his iPhone apps from $1 to $3 had no discernible effect on sales at all. So, he made 3x as much money. Personally, I don't think a $2.49 vs. $2.99 price is going to make that much of a difference. At certain low costs, it's all just 'throw away' amounts of money. That seems to be the results found by my iPhone developer friend.
You yourself claimed "only one or two viruses a month."
Prove the posts in "the guide" aren't shills. Your posts would tend to indicate that they are. After all, you seem to think that "one or two viruses a month" is an acceptable failure rate, even when contrasted against my zero point zero per decade.
Oh, btw - if you ever do go for a job interview in IT, don't say that you "subscribe to Windows IT Pro" - it makes you look really pitiful.
Real IT professionals recycle our complementary subscriptions.
Why don't I just cancel and "save the environment?" Because every so often, there's some swag to be had. Or invites. Discounted crap. REAL IT pros know this. You of course don't qualify. So sad. To bad. You no has cheeseburger? Awww ...
I'm sorry, I really can't suss out what you're saying, or where it contradicts my point, assuming that it's even directed at me. Can you say it again more clearly?
Also, by parent, do you mean me, the grandparent (Miseph) your previous parent (Low Ranked Craig), ...?
I'm well aware of the retail margins - and no, the publisher doesn't get $1 - $2 on a $50. A buck doesn't even cover the cost of packaging and production. Look in the trades - $10 to $20 is the norm on a $40-$50 retail product. Why do you think the retailers are screaming about thin margins - they're the ones who only get a 5% to 10% markup.
Nintendo actually published their figures. Look around for them. ISTR that Microsoft also did for their XBox titles.
Still, this doesn't address the real issue - control. As long as people have to funnel through the App store, you have a chance. However, the iPhone is under serious attack, and the leaked next-gen phone doesn't hold up all that well against the competition - especially against the latest droid from HTC. Android phones might outsell iPhones this year - they already surpass iPhones in terms of web surfing activity.
And the leaked iPhone falls short when set beside the Evo 4g. I'm not a google fan, but this phone just looks NICE!
I didn't say the publish, I said the developer. Very much NOT the same thing. The developer never touches the cost of packaging and production. That's part of the % he doesn't get.
Again, your confusion is that you are thinking about the publisher, NOT the developer.
And then finally, you wander off topic onto the success of next generations on smartphone, based on you opinion a non-functioning prototype iPhone. LOL! What an idiot.
I blogged about this yesterday: Publishers and the E-book Ecosphere
The question of what publishers want for books isn't the correct question.
I've fallen off your lawn, and I can't get up.
I just went out and got some gas.
Steve Jobs made my corner gas station set all the prices to end with .9 cents!
He really does dictate the price structure for everything.
Obviously you aren't paying attention
There's no competition for consumers here, it's the same books before and after this, and they come from the same **publishers** who are selling the books. The publishers here are oligopolies who are setting prices. Amazon was strong arming the publishers and sold ebooks at a loss because they were the only ebook game in town. Now Apple comes in and offers its services, and suddenly it's the publishers who have leverage. Remember Amazon was selling books at a loss, because they had negotiating leverage. Apple didn't have as much and contractually must sell books at a specific price. Apple doesn't set the prices, the publishers do.
To increase competition for consumers you have to make publishers smaller and more numerous.
"All great wisdom is contained in .signature files"
How's about something more than your say-so?
Get sick and tired of people making excuses for Steve Jobs, blaming everybody else for mistreating the poor defenseless man. It's just not true.
Infuriate left and right
No.
Did you read the link about price elasticity of demand? As you pointed out in a child post, additional units of a digital good are created for virtually zero cost, so we can assume all revenue is profit for simplicity.
If revenue has been optimized according to the rules of PEoD, then by necessity, and as you pointed out in your second sentence, reducing price reduces revenue. This is because enough more people aren't interested in buying your product at the lower price, to make up for the marginal loss of revenue on a per unit basis, of all the other units sold.
Assuming you will receive the same amount of revenue at $1.99 as at $2.99, and those are your only 2 choices, and you don't expect monetary deflation, it is probably better to price at $2.99 because as inflation slowly erodes the value of a dollar, it will be working your way towards your profit optimized price instead away from it. And in addition, consumers will over time perceive value in the fact you haven't raised your price in a long time.
In the parent post to you, or Brandee07, the starting facts he posited in his hypothetical situation was the agent had done the research and optimized his revenue using what is in essence the PEoD model.
Your friend has discovered he is still priced in the inelastic segment of his demand curve. His PEoD is between 0 and -1. Good for him. Keep increasing the price and he will find his product's unitary elastic point. I agree at certain low costs people don't really think about it. But that depends on the person. For me, if it is over $1, it is no longer throw away money.
I was saying the parent post to you, or Miseph, was somewhat inelegantly pointing out that Low Ranked Craig's post didn't make sense.
"if he simply lowered the price in the Amazon store... he would leave money on the table... But that is not the case we are discussing....simultaneous lowering of price and availability in another large marketplace might offset the price reduction..."
First LRC seems to discount his proposition of lowering the price in the Amazon marketplace. In continuing, he doesn't say simultaneous lowering of price in the first marketplace, and availability at the same price in a new marketplace. It is easy to read that sentence as saying "lowering the price of the item in a new marketplace."
Regardless, if he lowers the product's price in either marketplace, the other will contractually force him to offer it in their marketplace at the same lower price. If the price has been optimized in the Amazon marketplace, he will be forgoing revenue. That is a totally separate issue to whether additional revenue will be gained in a new marketplace to offset losses in the first.
Right, that's what I thought Miseph was saying.
Except that I don't think LRC fails to understand, and was pointing out there's no evidence of such despite Miseph's rant.
I guess in the end I was just a squabble over language. Sorry.
That would be a valid argument, if copying an ebook had a significant cost.
Lol, how is the air in your world. Nintendo does not release their proprietary games to any platform they do not own. Look to titles not owned by a competing platform and lets talk.
Your opinion of the iPad as a gaming platform is pretty humorous though. Good thing you do not make a living writing games.
And paying to distribute binaries, process payments, have their own notification system for updates, paying to distribute updates. The ability to do in-game micro purchases...
You clearly are not in the software business or anything related to it.
Compare that with the app store model: my software competes in its category, perhaps only a dozen other apps, to get the attention of a sector of the market that has money
iphones are dirt cheap, they aren't the accessory of rich people, they are the toy of 13yo schoolkids, anyone who wants one can get one these days. the brand loses it's prestige somewhat when you see hobos ripping it up in tap-tap revenge.
This is the crux of the whole situation. For an e-book costing $2.99 (as in the example above), any change in price is either -33% or +33%, or more.
What kind of pricing system is this that allows for so little granularity? Forget the ".99" part of it for a minute -- small purchases require the ability to make smaller-still changes in price (small squared, if you will).
To get a feel for the importance of granularity, imagine that a national association of real estate agents got together and proposed a law that all properties must be sold in multiples of $100,000. Or that all used cars must be sold in multiples of $1000. You're looking to sell your old car and you think it's worth about $1500. What should you do?
I like my Mac as much as the next guy, but Apple's business tactics need some work.
Shhhh BasilBrush, he just hates Apple, nothing to see here. Don't worry about it, all your points were correct, you've just been fighting a pointless war with a troll.
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I've often found that the truly creative/imaginative folks have a hard time dealing with reality as it is, and frequently wind up self-medicating with various substances. Clark ccna notes USA
My header says it all but I have to type this text to pass the filter.
You still need to explain why people would buy an iPad as a gaming platform when there are better ones, with better games, out there for a lot less. You can buy the games + platform for less than the iPad by itself.