On Feb 17, 2011, at 8:49 AM, Tom Limoncelli wrote: > When I worked at a computer store in my teens (remember when computers were > sold at stores?) the profit margin (before rent, commission, etc) was about > 30-50% depending on the package.
And that doesn't count the cut the distributors took before it got to the store (which could be as much as half the wholesale cost to the store, IIRC). And the software vendor had to pay for packaging. And media (remember that?) duplication. And someone was paying for shipping and warehousing. When the app store first opened and people complained loudly about Apple taking a 30% cut of the app store price, it was pointed out that distributors often demanded a minimum list price before they'd handle any item. And guaranteed minimum sales. And delivery up-front with payment after 30-90 days. Perhaps the "content suppliers" will be losing 30% of subscription sales, but they'll be gaining a huge potential audience which could easily add more than 30% to their number of customers. All while bypassing a lot of the cost, advertising, and infrastructure they'd have to maintain if they did it all on their own. I kinda think 30% seems a bit too high, too, for ongoing subscriptions, but it seems to be the cut Apple's taken for everything they distribute online Content providers can, of course, bypass the 10's of millions of potential iDevice customers and not give Apple one single penny. It'll be interesting to see how many do. One Angry Birds-like success for a subscription provider, though, and I bet many others will be flocking (ahem) to the App store to provide the same services even with the 30% cut. Arthur _______________________________________________ Discuss mailing list [email protected] https://lists.lopsa.org/cgi-bin/mailman/listinfo/discuss This list provided by the League of Professional System Administrators http://lopsa.org/
