#in-app purchasing

[futuristicbugpvtltd]

The Rise of Social Commerce: How Shoppable Content Changes Online Shopping

Social Commerce: The Rise of Shoppable Content Revolution

Discover how social commerce and shoppable content are transforming online shopping experiences and driving higher customer engagement.

[macdailynews]

For Apple Pay, the future is apps

For Apple Pay, the future is apps

“While most attention has been paid to which retail stores have started accepting Apple Pay, the iPhone-based payment service has quietly made serious progress in mobile commerce,” Ian Kar writes for Quartz. “And there are plenty of reasons to believe it could thrive in that space.”

“Apple told Quartz that Apple Pay is now supported by ‘thousands’ of apps. Among the purported benefits:…

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[shanebarker]

Apple Files Patent for In-App Purchases [Apple Has Filed a Patent That ...

Apple Files Patent for In-App Purchases [Apple Has Filed a Patent That ...:

The smartphone application market is booming, and developers are taking advantage of both outright sales and in-app purchases. But with patent issues threatening to stifle innovation in this field, can Apple's patent application have a bearing on the ... See all stories on this topic »

[quatermain]

Another analogy/story? Okay, why not…

Earlier today Mike Cane [pointed me][tweet] to an article comparing the hullabaloo upon Apple's 30% cut to the [lack of anger at Amazon's former 70% cut][article]. I commented on that article (largely aiming at the other comments rather than the article itself), although I got rather entwined in the story I was writing and forgot to mention that there's an apples vs. oranges thing there— on one side, a vendor is taking a percentage from a content owner, while on the other, a third party is charging a vendor who is already taking a lower percentage from a content owner. That said, when I found out about Amazon's enforced 70% commission I thought that was ridiculous too. Having only learned this when they dropped it to 30% however, I felt no compunction to weigh in. Now that Apple is demanding that the whole 30% Amazon now gets be handed over to Apple, well, that's a little different, and one would expect Apple to at least give some indication that they were open to the idea of changing that percentage, or would make it 30% of revenue, not retail, etc. But to those as yet uncertain of how the math works out, what follows is the same hypothetical story from my comment on the article above. The new (or newly-clarified) rules in effect say this: If I have an app for iOS, and that app is able to work with some form of data which I sell, then I *must* make that content available via In-App Purchase, giving Apple 30% of retail revenue. It doesn't matter if the app offered it for sale before, whether it was a dumb consumer of this content, or what. The fact that I sell content and have an iOS app which uses that means I must now sell it through IAP, and *only* through IAP. I am also forbidden from mentioning in my app that there is any other means of obtaining said content. I can't link to my homepage from the app either, because that links to an online store. I am not a publisher. If I were a publisher (i.e. the producer or the creator of this content) then I would be happy to let Apple take a 30% cut, because I would take home 70%, and would set prices such that I could operate. However, in the eBooks and music industries, the provider of the app is a vendor, and the vendor usually takes less than 30% of retail price (with the exception of Amazon, originally). The most common percentage is around 20% of retail. Yet Apple's new rules state absolutely that I must pay them 30% of retail. So 80% of retail I pay to the publisher, 30% to Apple, leaving me with -10% upon which to build my business. Oh wait, did I say *build* my business? Silly me. I've already built my business. I've put millions of dollars into it over the past two years. Apple created a fantastic and innovative new mobile platform, and when they offered to let me create apps for it and build a business around that platform I took them up on their offer. When I inquired about alternatives to in-app purchasing (indeed, when in-app purchasing didn't yet exist), Apple freely told me that I couldn't perform transactions inside the app, but that they were happy — nay, they *recommended* — that I bounce the user to a website in the Safari browser to perform that transaction. If I remember correctly, they actually suggested this. So, based upon Apple's recommendations, I've built my business around iOS. I pay about $40'000 per month in bills for offices, telecommunications, internet, content hosting, content bandwidth, and personnel. I do all my own advertising (because who else is going to advertise for me?). I employ the best programmers and staff I can find. This outlay is offset against business revenue of perhaps $55'000 per month. That's fine— it works out to a profit of about $15'000 per month. Great. After one year in the business, Apple decides they will open a competing bookstore, and develop a competing app. They make use of all sorts of private APIs in doing so, any one of which would get my own app rejected from the store. But that's fine— I increase my expenditure a little and strive to make my app better than theirs, and I attempt to market mine more so it doesn't get eclipsed by all the iBooks-related marketing. I'm now paying out $60'000/month on revenue of $80'000. My profit has gone up in number, although it's dropped a little as a percentage of revenue. After another year, Apple decides that, since my application can display content purchased from my store (which isn't even implemented in my app, it's just a website), I must now implement in-app purchase of all my content. I hire more people to sort and input my 1 million items into the IAP database, and find that it tops out at 3'500 items, leaving some 996'500 items available only through the website. Maybe I hire a consultant with IAP experience to get an in-app store up & running extra-fast, before the June deadline. Then I publish the next version of the app, and my revenues drop by 27% (I was paying 3% to my payment processor before). Aside from the fact that my users are now complaining that my new in-app store "sucks ass" because it lists barely a fraction of what they could find online, but I "force [them] to use it because the app doesn't mention any other way to buy stuff any more", how am I doing? Let's pretend that my sales numbers stay exactly the same. I sell the same amount of content now: Revenue has dropped by 27% from $80'000 to $58'400. My outgoings, previously $60'000, have since gone up, since I have new staff to manage the IAP side of things. I'm now paying out about $65'000 per month. So in this bright new world, I'm making a loss of $6'600 per month. And yet the costs of doing business for me haven't lessened one iota. They've gone up, because I now have to manage my IAP store-front in addition to the original one. And if I switched to IAP-only, I'd still have to manage everything about my old store except for the web interface to it, since Apple only provides transaction processing, nothing else. Is this worth getting upset over now? Or should I just fire my 200 staff and tell my wife & daughter that I've got to look for a new job? You tell me. [tweet]: http://twitter.com/mikecane/status/39054814948229120 [article]: http://thesmallwave.com/apples-30-cut-is-outrageous-yet-when-amazon-w

[quatermain]

The DOJ and the FTC and the EU, oh my!

Aww, *hell yeah*: > The Justice Department and the FTC are both interested in > examining whether Apple is running afoul of U.S. antitrust laws > by funneling media companies' customers into the payment > system for its iTunes store—and taking a 30% cut, the people > familiar with the situation said. The agencies both enforce federal > antitrust laws and would have to decide which one of them would > take the lead in the matter. And the reasoning behind it all: > Apple's rules don't stop media companies from selling digital > subscriptions on their own. But the company imposed restrictions > that could make that option less attractive to customers, and > steer more sales through its own system.

(indeed, since IAP prices can't be higher than others, it may make other companies raise their prices *outside* their iOS apps, helping Apple even more)

Antitrust Enforcers Eye Apple Anew — The Wall Street Journal Let's hope they don't focus solely on subscriptions or music, but look at the eBook business too. I pick that one because Apple joined the eBook business on iOS late in the game and is now using these rules to try and force the existing companies to either go out of business or to raise their prices significantly higher than those of Apple's iBookstore (thus going out of business later, or otherwise pushing their customers to Apple). There's also the question of the value provided by Apple's in-app purchasing channel: * If the value is in the **in-app-purchasing API**, then that doesn't scale between a $100/month and a $1M/month vendor: both using the same API, yet one is paying $30/month, the other $300'000/month. * If the value is in the **ease of payment processing**, then the question is whether it's unfair of Apple to mandate that everyone uses their service at 30% commission rather than, say, PayPal for 3%, when they both provide the same service (PayPal has an API too, after all). If this really is all about the end-user experience and *not* about gaining competitive advantage or making a cash-grab, then Apple should be willing to open up a layer of the in-app purchasing API such that it could hook into alternative payment providers (similar to the NSAtomicStore for CoreData). That way the users get the great experience, vendors don't necessarily have access to the users' payment details, but they can feed the transaction into a separate payment handler, for instance PayPal or others. At this point, PayPal could also charge a flat fee or an increased commission for the use of their iOS in-app-purchase payment connector as well. But if you're selling your own content directly and value ease-of-development, then Apple still has a good value proposition, and can make other changes to further entice users. It's all about market forces. Having one arm of a company simply mandate the use of the same company's other profits is somewhat naughty. At least Microsoft played dirty to get rid of Netscape and WordPerfect— they didn't outright ban their use in the EULA.

[theotherrealworld-blog-blog]

Google TV Super Dream Cable Box/Game Console Thingy

We know what Google TV does, but I was just thinking of it’s Android potential. Just think a box with Tegra 2 or better, something that can produce current gen console graphics, that you can play on your phone or TV. In app purchasing, so there would be no need for discs or sequels. Imagine no Gears of War 1, 2, or 3—it would just be one game where you can continue to purchase parts of the serial. In this way, there would be less time between what the developer intends and what they can do. Let’s say the developer needed more funding (which is part of the reason sequels if nothing else look better), they could sell the first few parts of the game and update the graphics, tweak the gameplay, and release parts 2. No need for “improved” sequels like Left 4 Dead. The only reason this is different than DLC at all is because it is seamless. You reach level 5, you just click continue and downlaod the next part if it is available. Play Gears one, then download the next part. I literally drove to Gamestop and bought Gears 2 directly after I finished, that process could be eliminated and if the graphics engine is updated, the whole game is updated like Warcraft. This would be completely forgivable as long as the content continued to be worth it. You own the content permanently and download it anytime you want over your lifetime, no need to buy another copy for each new device and the beautiful thing? Let’s say the next gen of 4K TVs comes out and we have super high polygon counts and high res textures? Pay for an in-app 4K upgrade instead of a completely new copy of the game to take up space.

It wouldn’t hurt to have some like an Xperia Play that alone would be a kickass gaming phone, but combined with a Google TV would be a second screen display like a DS or Dreamcast VMU. Touchscreen or slide out gamepad. In fact this is what Sony should do with it’s next console. The NGP is already capable of PS3 graphics.

Just my dream…A Universal platform where a very high bar is set for openness and availability. Maybe even the cable companies could subsidize these cable box/game consoles like cell phones. Subscribe to a two-year cable contract, get a free or cheap Google TV game console. That's the world I want to live in soon.

[izzycjohnston-blog]

When the iPad came out, people were concerned that Apple would stifle ereader apps by popular distributors, such as Amazon and Sony. For a while, users could purchase books for those apps through Safari. However, iPad now requires in app purchasing, which will give Apple a 30% cut. 

The article hazards some predictions, but no one is really discussing the long term effects. Will Apple's proprietary practices push out competition or inspire competition? (The age old question).