Thirty Percent

People are really hung up on this 30% issue. I think it is dumb to get hung up on this — doesn’t matter if you are a developer or a consumer, let it go. I say this because there is only one way to get Apple to reverse this policy: make the App store fail, therefore Apple is forced to change its game. I don’t think any person wants to see the iOS App Store go away any time soon — it is a source of many peoples income and millions of peoples entertainment.

Price of Admission

The problem with the current mind set is that people are looking at this from the following perspective:

“My app is worth $10 a month. If I sell 10 subscriptions I should get $100 a month, but Apple is taking a 30% cut of that and now I will only get $70 a month. Oh crap, I really need $100 a month, so now I need to raise my prices by 43%. 1 I can’t believe that Apple is taking this much money!”

Here’s the thing about that logic: it’s wrong. Apple isn’t taking jack from you because without Apple you wouldn’t have a business developing iOS apps. Plain and simple. People really need to get this. If Apple did not create, maintain, pay for, hire people, construct, scheme, profit from the App Store — there would be no App Store to speak of. If there is no App Store then there is no revenue for any iOS developer. 2

So stop thinking about 30% being stolen from you and instead ask yourself if it is worth $3 for every $10 in subscriptions to have your product put in front of 100 million+ consumers which can subscribe with only a hand full of taps. I think it is.

Value

Next you need to ask yourself if your time is better spent supplying content to subscribers, or managing subscriptions. Apple is giving you an out from customer service. If someone needs to unsubscribe or has issues with their subscription — it is no longer your problem, Apple needs to fix that.

Here’s what else you don’t have to do (if you don’t want to):

  • Process payments
  • Advertise
  • Worry about data breaches that give out SSN and Credit Card numbers

I don’t know about you, but not having to deal with this stuff is well worth 30%.

I’m Leaving

Go for it, but remember: people on Android don’t pay for things, iOS users do. Would you rather serve ads, or sell apps/subscriptions?

There is good reason for many people to leave the App Store over this. In fact 37signals’ David Heinemeier Hansson has already tweeted: “FYI, if Apple comes hunting for 30% of software subscription revenues through iOS, we’re dropping Campfire/Highrise apps in a Chicago second”. It makes sense for them to leave rather than pay 30% — most of their users are desktop/laptop based, not iOS based. So they already need those systems in place that I talked about before — on the flip side it doesn’t make sense for iOS only apps like ‘The Daily’ to leave over this, as they (theoretically) don’t have such systems in place to begin with.

Books / Kindle

This system also doesn’t make sense for book distributers to use — 30% is their entire profit. But I don’t think we have heard the end of how these book apps will work under the new iOS rules — personally I think we are all jumping the gun a bit on this one.

Reacting

Rules change when you play in someone else’s backyard — it sucks, but if you are smart you can still be wildly successful. The 30% cut isn’t great (though it does look great from a strict consumers view), but it isn’t the end of the App Store — I bet it only makes the App Store better by ridding it of more junk apps.

“Smile, breathe and go slowly.” —Thich Nhat Hanh

  1. Source, via Ian Hines on IM
  2. Sure Cydia is around, but that user base is minuscule and piracy laden.
Originally posted for members on: February 16, 2011
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