<story><title>Apple blocking SkyDrive from iOS store, wants cut of revenue</title><url>http://microsoft-news.com/apple-blocking-skydrive-from-ios-store-wants-cut-of-revenue/</url></story><parent_chain><item><author>fauigerzigerk</author><text>Potential consumer confusion has nothing to do with the size of Apple&apos;s cut or how it is structured.&lt;p&gt;Clearly, a 30% cut is fair for the average $1.5 purchase because it includes fees for payment processing and fixed cost per app.&lt;p&gt;But Apple will have to decide whether or not they want people to sell more expensive stuff on their platform. Taking a 30% cut on a $100 purchase is not economically viable and it is unnecessary if the goal is to avoid consumer confusion.&lt;p&gt;They could just charge 50 cents + 5%</text></item><item><author>drewcrawford</author><text>I think the problem is in how the question is framed.  The App Store has always been revenue neutral [1].  It&apos;s not a profit center for Apple.  It&apos;s not about &quot;getting their cut&quot;.  It&apos;s about having one billing statement to look at.  It&apos;s about eliminating shady billing tactics a la gym memberships.  It&apos;s about keeping your address out of some developer&apos;s mailing list.&lt;p&gt;You&apos;d be surprised about the extent of this problem.  I get e-mails all the time from people who are worried that they have a monthly payment for my app, for example.  There are just an awful lot of people who don&apos;t &quot;get&quot; software at all and derive real value from simplified one-party billing.&lt;p&gt;So if you start from the premise that billing for iOS apps has to be brain-dead simple, we arrive at the present rule: any payment that looks like it happens on an iPhone must [2] run through IAP at whatever rate Apple can break even.  If your payment collection process consists of people using their fingers on the screen of an iPhone, then it is potentially confusable with IAP by Grandpa and he might get mad at Apple; this is unacceptable.  But monetizing your pizza ordering app by handing money to a pizza delivery guy who shows up at your house is not confusable, so it&apos;s A-OK.&lt;p&gt;Now, it&apos;s perfectly debatable whether or not consumer confusion is really that big of a problem, or a problem big enough to justify the negative externalities of solving it.  But if it is, then the result follows: the solution is to run all the billing through a break-even single party.  If you accept the premise, then the rule that is fairest and best and also solves the problem is the rule that we already have.&lt;p&gt;It&apos;s unfortunate that we live in a world where the economics of Dropbox, Skydrive, Amazon et al seemingly don&apos;t allow enough profit margin to pay Apple&apos;s overhead to process payments.  But I&apos;m not really sure who is to blame for that: the consumers, for being confused about billing; Apple, for trying to fix it for them; Skydrive etc. for not creating a two-tiered pricing structure to charge IAP customers at 30% more; or consumers again for being unwilling to pay an extra 30% for single-party billing.&lt;p&gt;[1] &lt;a href=&quot;http://www.macobserver.com/tmo/article/apple_app_store_runs_just_above_break_even&quot; rel=&quot;nofollow&quot;&gt;http://www.macobserver.com/tmo/article/apple_app_store_runs_...&lt;/a&gt;
[2] there are some exceptions, I&apos;m speaking broadly to make a point</text></item><item><author>crazygringo</author><text>So I&apos;m very curious if anyone can help see a &quot;intuitive fair line&quot; better than I can (because I can&apos;t find one).&lt;p&gt;On the one hand, it makes perfect sense Apple wants 30% on apps. They run the store.&lt;p&gt;On the other hand, it seems like Amazon should be able to sell books, Dropbox should be able to sell space, etc., without paying 30% -- otherwise it&apos;s financially impossible.&lt;p&gt;But if you allow apps to sell content within without paying 30%, then all of a sudden all apps become free, selling &quot;upgrading functionality&quot; within, and the app store is no longer viable for Apple.&lt;p&gt;You can&apos;t even make a rule like &quot;reselling 3rd party content is exempt from the fee&quot;, because apps will claim additional functionality as 3rd-party. You can&apos;t make a rule that &quot;content accessible on other devices is exempt from the fee&quot;, because gamemakers will just make their in-game purchases accessible on the Android version too, or something.&lt;p&gt;Can anyone think of a clear, unambiguous rule that would allow things like Dropbox, Skydrive, Amazon, etc. to get around the 30% fee, but without allowing loopholes that would allow everyone to skirt it? I swear my brain thinks there&apos;s a distinction, but I can&apos;t figure out what it is.</text></item></parent_chain><comment><author>drewcrawford</author><text>&amp;#62; Taking a 30% cut on a $100 purchase is not economically viable&lt;p&gt;The market for a $100 app isn&apos;t very large, and that price point is also a target for fraud / scams / accidental purchase complaints.  This risk is offset by additional review scrutiny, but the cost for that additional scrutiny is amortized over a small number of potential customers.&lt;p&gt;The result of all this is that $100 purchases are expensive for Apple to run, and Apple as a rational actor should discourage them.  I wouldn&apos;t be surprised to learn that the whole $50+ market runs at a loss that is covered by the cheaper apps.</text></comment>
<story><title>Apple blocking SkyDrive from iOS store, wants cut of revenue</title><url>http://microsoft-news.com/apple-blocking-skydrive-from-ios-store-wants-cut-of-revenue/</url></story><parent_chain><item><author>fauigerzigerk</author><text>Potential consumer confusion has nothing to do with the size of Apple&apos;s cut or how it is structured.&lt;p&gt;Clearly, a 30% cut is fair for the average $1.5 purchase because it includes fees for payment processing and fixed cost per app.&lt;p&gt;But Apple will have to decide whether or not they want people to sell more expensive stuff on their platform. Taking a 30% cut on a $100 purchase is not economically viable and it is unnecessary if the goal is to avoid consumer confusion.&lt;p&gt;They could just charge 50 cents + 5%</text></item><item><author>drewcrawford</author><text>I think the problem is in how the question is framed.  The App Store has always been revenue neutral [1].  It&apos;s not a profit center for Apple.  It&apos;s not about &quot;getting their cut&quot;.  It&apos;s about having one billing statement to look at.  It&apos;s about eliminating shady billing tactics a la gym memberships.  It&apos;s about keeping your address out of some developer&apos;s mailing list.&lt;p&gt;You&apos;d be surprised about the extent of this problem.  I get e-mails all the time from people who are worried that they have a monthly payment for my app, for example.  There are just an awful lot of people who don&apos;t &quot;get&quot; software at all and derive real value from simplified one-party billing.&lt;p&gt;So if you start from the premise that billing for iOS apps has to be brain-dead simple, we arrive at the present rule: any payment that looks like it happens on an iPhone must [2] run through IAP at whatever rate Apple can break even.  If your payment collection process consists of people using their fingers on the screen of an iPhone, then it is potentially confusable with IAP by Grandpa and he might get mad at Apple; this is unacceptable.  But monetizing your pizza ordering app by handing money to a pizza delivery guy who shows up at your house is not confusable, so it&apos;s A-OK.&lt;p&gt;Now, it&apos;s perfectly debatable whether or not consumer confusion is really that big of a problem, or a problem big enough to justify the negative externalities of solving it.  But if it is, then the result follows: the solution is to run all the billing through a break-even single party.  If you accept the premise, then the rule that is fairest and best and also solves the problem is the rule that we already have.&lt;p&gt;It&apos;s unfortunate that we live in a world where the economics of Dropbox, Skydrive, Amazon et al seemingly don&apos;t allow enough profit margin to pay Apple&apos;s overhead to process payments.  But I&apos;m not really sure who is to blame for that: the consumers, for being confused about billing; Apple, for trying to fix it for them; Skydrive etc. for not creating a two-tiered pricing structure to charge IAP customers at 30% more; or consumers again for being unwilling to pay an extra 30% for single-party billing.&lt;p&gt;[1] &lt;a href=&quot;http://www.macobserver.com/tmo/article/apple_app_store_runs_just_above_break_even&quot; rel=&quot;nofollow&quot;&gt;http://www.macobserver.com/tmo/article/apple_app_store_runs_...&lt;/a&gt;
[2] there are some exceptions, I&apos;m speaking broadly to make a point</text></item><item><author>crazygringo</author><text>So I&apos;m very curious if anyone can help see a &quot;intuitive fair line&quot; better than I can (because I can&apos;t find one).&lt;p&gt;On the one hand, it makes perfect sense Apple wants 30% on apps. They run the store.&lt;p&gt;On the other hand, it seems like Amazon should be able to sell books, Dropbox should be able to sell space, etc., without paying 30% -- otherwise it&apos;s financially impossible.&lt;p&gt;But if you allow apps to sell content within without paying 30%, then all of a sudden all apps become free, selling &quot;upgrading functionality&quot; within, and the app store is no longer viable for Apple.&lt;p&gt;You can&apos;t even make a rule like &quot;reselling 3rd party content is exempt from the fee&quot;, because apps will claim additional functionality as 3rd-party. You can&apos;t make a rule that &quot;content accessible on other devices is exempt from the fee&quot;, because gamemakers will just make their in-game purchases accessible on the Android version too, or something.&lt;p&gt;Can anyone think of a clear, unambiguous rule that would allow things like Dropbox, Skydrive, Amazon, etc. to get around the 30% fee, but without allowing loopholes that would allow everyone to skirt it? I swear my brain thinks there&apos;s a distinction, but I can&apos;t figure out what it is.</text></item></parent_chain><comment><author>jobenjo</author><text>That&apos;s a great solution, actually. Think of it more like a credit card processing fee.</text></comment>