[zepto]

Ok - so assume a store opens with a 10% revenue cut, and ends up with 50% of sales.

You still have to support the Apple store otherwise you lose half your sales.

The effective commission is now 20%. So you pay 10% less commission but must deal with 2 stores.

That’s with just a single additional store taking 50% of the business, which is an unlikely scenario.

Consider that it is inevitable that new stores will not all be independent.

Google and Amazon will immediately open stores if Apple is forced to allow 3rd party stores.

Will their cut be lower than 30%? I see no reason for it to be. Google play is 30% right now. Maybe it will be 25%, but they have no reason to minimize the commission.

Will they get significant traffic? Yes - they both have the ability to push their stores via their giant advertising platforms. They will also use the opportunity to push browser based platforms that they control, and which will further fragment the user experience.

Why would they need to dramatically improve terms for developers?

Neither has any record of doing so.

Would they allow all kinds of App? No. They don’t right now. Why would they in future?

So you’re going to have to deal with all 3 of the big stores.

Now assume some independent stores get funded which actually do offer better terms for developers.

What percentage of the market will they realistically get?

And how can you benefit from their ‘less egregious demands‘?

If you want the percentage of revenue from the Apple store or from the Play or Amazon stores, you will have to meet their demands.

Therefore you will either make a lowest common denominator version that complies with the restrictions of all stores, or you will need to maintain multiple versions.

Requiring Apple to allow multiple stores will be more expensive and more restrictive and force developers to deal with even more rules.

It is in no way good for indie developers.

[fauigerzigerk]

>Will their cut be lower than 30%? I see no reason for it to be. Google play is 30% right now

Yes, I'm sure of it. For instance, Microsoft's fees are just 15% because they are less powerful right now. The more stores there are, the less powerful each of them would be and that would create an incentive for all of them, including the incumbants, to cut fees and offer fairer terms.

We might well see new entrants beyond Google and Amazon - people like Microsoft, Stripe, Puddle, Shopify, Valve, Facebook or startups that don't exist yet. Maybe the content side and the payment/billing side of stores would be run by different companies. Who knows.

As soon as you have credible alternative stores with equal visibility, the most profitable customers will leave the incumbants if they don't relent on fees. Small developers will be able to tag along, because everything else would be seen as obviously unfair.

If you claim that the balance of supply and demand has absolutely no bearing on prices and terms, then I will never be able to convince you. But you're going against every single historical example of how markets work.

[zepto]

I don’t claim that the balance of supply and demand has no bearing on prices and terms. That is clearly a straw man.

I agree that the balance will end up with some stores with reduced fees. Perhaps they will all be forced down to 15%, but you if you are denying that those with greater reach will have pricing power, then you are the one who is going against every single historical example of how markets work.

However unless there is another monopoly outcome - I claim that the result would be utterly destructive to independent developers.

You have now posited the requirement to support as many as 8 stores. That alone will easily offset the benefit of paying 15% less in commission for small developers.

Every app release will be more expensive, and that ignores the fact that the overall system will be less efficient, since every release will result 8 separate app reviews, etc.

Commissions will go down, but costs will go up.

All the benefit of the lower commission environment will be transferred from independent developers to larger corporations for whom the cost of releases is a smaller percentage of their total.

It’s also worth pointing out that Android already allows alternative stores, and yet Google somehow manages to keep charging 30% for the play store, and there are no common alternatives in the US.

How can your theory be correct when this clear counterexample exists? For that matter why hasn’t Google just reduced the commission to 15% or even lower to induce developers away from iOS? Surely they could have done so at any time.

[fauigerzigerk]

>You have now posited the requirement to support as many as 8 stores

That's a surprising read of what I said. I named a couple of companies that might be interested in running a store. I do not belive for a second that all of them will, nor did I suggest that that developers are required to support every single one of them.

I highly doubt that there will ever be more than three general purpose stores per platform, and perhaps some specialist ones that most developers don't use (e.g. for games, enterprise apps or to serve specific countries).

That and the threat of possible new market entrants will be enough for stores to compete a little bit more for developers and lower their fees from the current egregious rent seeking levels. It will also reduce the risk of getting banned outright from your target platform.

It seems the only point we really disagree on is the additional burden developers would face if there was a bit more choice. I understand what you're saying, but I believe your fear is grossly exaggerated.

Yes, reviews will cost a bit more overall. But that will easily come out of the incredible margins of current oligopolists.

[zepto]

I think part of our disagreement on the burden is the idea that developers would be able to choose which stores to support.

Of course in principle they would be able to choose, but in practice, by doing so they give up a percentage of revenue.

If price competition brings commissions down to say, 15% on average, developers must support a combination of stores with a minimum combined market share of 85%, just to break even on where we currently stand.

Even if the majority of purchases are made from a few large stores, developers will likely be worse off unless they also support some of the smaller ones, and even then, the fragmentation means that the full cost saving of the reduced commission will likely never be realized.

And in this world where there are 3 major stores and some smaller ones. Every serious developer will be required to support all of 3 of the major stores to get close to the current revenue.

The improved margin just isn’t that much once you start losing access to addressable market.

On top of this, as I have said elsewhere, to actually get into all these stores, your app must comply with the superset of regulations.

I think it’s fair to assume that that Apple, even if they are forced to reduce commissions, will not be likely to ease regulations significantly.

The notion of a safe, well policed store, is a core value and one of the reasons people choose the brand.

Even if they only retain 20% of app sales, developers will still need to comply with their regulations if they don’t want to be worse off than before, and in addition will have to comply with whatever the other stores require.

I don’t think there is any gross exaggeration here.

There just isn’t as much gain to be had.

It would be a different matter if Apple could be pressured into reducing margins without fragmenting the store landscape.

My hope is that they do so pro-actively.

[fauigerzigerk]

>If price competition brings commissions down to say, 15% on average, developers must support a combination of stores with a minimum combined market share of 85%, just to break even on where we currently stand.

I doubt that. I think if there were two or three major app stores, almost all consumers would use all of them.

And even if they didn't, I would still feel far more confident committing to a platform where one particular corporation cannot take away 100% of my customers over night for some frivolous reason and ruin my entire business.

Another upside is that I wouldn't depend as much on the ranking algorithm of one specific app store. My livelihood would simply be far more secure if it wasn't so completely dependent on the whim of one or two global corporations.

I don't have to comply with a superset of regulations. If I'm making something that is only allowed on specialist app stores (such as porn for instance) then my users will find me there. That's better than reaching 0% of users.

[zepto]

Well these points weaken some of your earlier ones.

For example - if it becomes a duo or tri-opoly there is no reason for them to race to the bottom on commission - remember the store’s customers are the app buyers, not the developers.

Stores from Amazon or Google simply wouldn’t need to lower commissions as long as they had more than 15% of the customers to bring to the table.

I agree that the ranking algorithm is a problem and I think Apple should at the least provide an alternate storefront API, but you contradict yourself here by saying you’d be more secure if You weren’t dependent on the whim of one or two global corporations, because you also said you think two or three stores would be used by almost all consumers.

If you are a porn developer it’s true that you’d only need to comply with the rules of a specialist porn App Store.

However the vast majority of apps are not porn and are of mainstream appeal. All of these apps would have to comply with the superset of regulations so this is not a counterargument.

Breaking up the App Store will simply harm the majority of indie developers. I grant that it may help porn producers.