[paulmd]

Fun thing about a two-sided marketplace, it has two sides, and sellers need buyers too. In most cases they need buyers so drastically that they will actually pay for the privilege of access to the buyers!

You can make all these same arguments about eBay, or credit card merchant fees. If you charge the seller more for access to rewards-card customers then they won’t join, right?

There is a point of balance, Amex or Diners Club do struggle for adoption, but the guy with the 3% visa or mastercard is actually hugely desirable even if it does cost an extra % or two to get access to that segment of the marketplace.

Unless your business is so entrenched that people are actively seeking you out, you have to go where the customers are. Even if that means accepting an unfavorable deal.

That’s the whole argument about the App Store, right? Android market is free (if you set up your own store etc). But people want access to the apple customer base, because they’ve got more money and tend to spend more money too. So it’s objectively a worse deal to write android apps even if the terms are more favorable, because the customers are less valuable.