Comment by legitster

Comment by legitster 4 days ago

16 replies

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This means Apple is literally going to take nearly 3x in fees from Patreon's customers than Patreon is taking from their own customers.

My understanding is that the reason the number 30% is so magical is a historical anomaly. When software was physically distributed back in the day, 15% of the MSRP was reserved for the distributor and another 15% for the retailer. When these digital marketplaces were set up, the companies just said "well, we're the distributor and the retailer, so we'll keep both". Forgetting the fact that the cost to distribute and retail the software is literally pennies on the dollar of what it used to be.

I think the irony in this case is that this is a greed problem of their own making. When Steve Jobs announced that apps on the original iPhone would only be $1-$3, he set off the first enshittification crisis in the software industry. In 2008, Bejeweled cost $19.99 if you wanted to buy it on the PC. On the iPhone it was $0.99! This artificially low anchor price is what kicked off the adoption of ad and subscription driven software models in the first place.

bryanlarsen 4 days ago

My understanding was that the retailer margin was 50% and the distributor margin was 10%. So Apple/Steam/etc went "half of 60% is a great deal".

Of course the retailer margin is never actually 50%. That's theoretical if 100% of product is sold at MSRP. Actual retail margins are about 25% because of sales, write-offs, et cetera.

OTOH when there's a sale in Steam, they still get their full cut (of the reduced price).

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  • tessela 4 days ago

    I remember writing apps for PalmOS (long time ago) distributors like PalmGear took over 60% from international developers like me, plus they held your earnings until you hit a minimum payout threshold. Add bank fees on top of that, and it was basically not worth developing for the platform. 30% felt like a godsend in comparison. (I'm not defending the Apple / Google tax)

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  • legitster 4 days ago

    From what I could find, it does seem that major retailers back in the day (CompUSA, Circuit City, etc) were only making 15% margin on software sales. This is much lower than other product categories - but also software didn't take up much floor space.

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    • gdilla 4 days ago

      its agency model vs retail model. Recall - Amazon hated the agency model, where the publisher sets the price (and 30% cut goes to app store - Jobs sold this as amazing deal). Retail model the retailer sets the price, and the publisher is guaranteed the wholesale price. Amazon preferred the latter because they competed on dynamic price setting. this was so long ago we forget.

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    • marcosdumay 4 days ago

      It coupled the small floor space with high prices, and an extreme overall easiness of management (low weight, resistance to small impacts, possibility of stacking, etc).

      So that margin not only had to pay for small management costs, and had small opportunity costs on the floor space, but it also was divided by a large unitary price.

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scyzoryk_xyz 4 days ago

Had no idea about the history and the 15%/15% split but when the topic comes up I just remember how good the 30% seemed back in, what, 2008?

It made perfect sense that this shiny new iOS platform would take 30% of a cheap app to ensure that it matches the high quality of iOS. These were little productivity apps and games at the time.

This however - I just don't understand what the need is for an app at all for Patreon. Isn't this a website/platform kind of thing? Wouldn't an app just be an additional window into the Patreon platform?

What's next - 30% of my pizza price goes to Apple because I ordered it on my phone?

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  • nickjj 3 days ago

    > What's next - 30% of my pizza price goes to Apple because I ordered it on my phone?

    You joke but this already happens with places like DoorDash. They take 30% of the order from the store owner after adding their own additional fees to the order that customers pay.

    Someone I know owns a pizza store and his prices are 30% higher on DoorDash but some people still pay. The big difference is it's not a monopoly. He offers regular delivery at normal store prices and 95% of his deliveries go through that.

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  • wat10000 4 days ago

    I was working for a small software company at the time and we thought it was outrageous. We were selling our software online direct through our own web site and the cost was far lower. A few percent for credit card processing fees, and the server/bandwidth cost was inconsequential.

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  • johnnyanmac 4 days ago

    >This however - I just don't understand what the need is for an app at all for Patreon. Isn't this a website/platform kind of thing? Wouldn't an app just be an additional window into the Patreon platform?

    That's the other part of the surrogate war happening with mobile. The web was unregulated and hard to profit off of, so Jobs took great strides to push the "there's an app for that" mentality that overtook that age. This had the nifty side effect of killing off flash, but it's clear the prospects didn't stop there. Not to mention all the other web hostile actions taken on IOS to make it only do the bare minimum required to not piss off customers.

    It very much could just be a website with no reliance on IOS as a dependency. But Apple clearly doesn't want that.

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  • pixl97 4 days ago

    >What's next - 30% of my pizza price goes to Apple because I ordered it on my phone?

    I'm pretty sure Apple has discussed things exactly like this.

    Their upper management really does tend to think that 30% of any monetary transaction on an Apple platform belongs to them. Too bad our government is too busy being ran by the billionaires to do anything about these abuses from billionaires.

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    • johnnyanmac 4 days ago

      Really hope the 2nd wave of Sherman hits these bit tech companies hard if/when this regime inevitably falls. I just hope there's something left of America when it happens.

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dawnerd 4 days ago

It only really makes sense on the one time purchase of a product, not the subsequent in app purchases they don’t have to touch apples infra.

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grishka 3 days ago

30% might be fair when you have a choice of either marketing and selling your app yourself, or just using an app store to do everything for you. But when you are forced to use the app store, things get really stupid really fast.

Apple still insists that the app store "provides value" for developers. They simply can't comprehend the harsh reality that these days, for most developers, the app store isn't the godsend service that helps their app get discovered, but instead an asinine bureaucratic obstacle they have to clear, and then regularly attend to, to have an iOS app at all.

The Mac app store, being optional for developers, is a good example of how much people actually want something like this.

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  • dragonwriter 3 days ago

    > Apple still insists that the app store "provides value" for developers. They simply can't comprehend the harsh reality that these days, for most developers, the app store isn't the godsend service that helps their app get discovered, but instead an asinine bureaucratic obstacle they have to clear, and then regularly attend to, to have an iOS app at all.

    Oh, no, they can comprehend, they just don't care. Apple controls access to a valuable pool of business, and they are going to extract as much value as possible from people wanting access to that pool. And, of course, they are going to try to burnish it with marketing speak, but that doesn't mean they believe their own marketing.

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