What is a reasonable app store charge for developers?

[HDFan]

Given the current fight between Apple and Epic in the main wrestling ring I am wondering what is a reasonable app store fee for developers?

1. It has to be at least 3% to cover credit card fees
2. Before digital distribution of software one purchased the CD in a box. This must have been costly.
a. The cost of the box, enclosures, CD
b. The cost charged by distributors
c. The cost of shipping (maybe in b)
d. The cost of returns. Unsold product due to updates or other factors

My guess is that these costs were over 30% of the cost of the product.

Digitial distribution is much cheaper.

1. No physical inventory with its associated costs
2. Enable rapid updates
3. App store can do additional security checks and revoke an app if it is a risk
4. App store support can handle purchasing issues
5. Easy, one stop shopping for customers

So the app store provides valuable services. Epic complaining about the fees seems to me rather suspect given that the app store does provide value. They don't want to pay anything for the service. The question is how much is reasonable? Certainly greater than 3% and less than 30% with the lower costs.

My initial thought is that I am willing to pay 10-15% more to purchase from the app store.

What number is a reasonable app store charge?

 

[rowlands]

How should Apple price their rate on MAS, that boils down to what value it brings.

When MAS first launched, I had no complaints about 30% at all (A publisher would take 50% and Amazon would take 66%), but that was based on one reason. Included marketing. A publisher is typically responsible for marketing your application, Amazon is Amazon, and in the beginning Apple had "Organic Discovery", which was worth it's weight in gold. Our best years where when MAS first opened. However Apple replaced this with favored promotion, which they dubbed "Curation". Unless Apple promotes it, you invest in marketing yourself, or a customer searches for your app on MAS, customers never see it, and if no-one sees it, no-one downloads it and if no-one downloads it, no-one see it.

In a recent survey of indie devs who sell in MAS and out, most make more money outside, the average was 6x more. This is despite 54% of Mac users preferring MAS.

People often argue that MAS is more than a MOR (Merchant of Record) as it includes hosting. Hosting Mac apps can cost as little as $60 a year, while some MORs only charge 3%, but the average is < 10%.

There is also the "Trust" argument, which can be argued. Apple's weird system for FREE trials and heavily pushing developers towards subscriptions has hurt the shareware industry. A significant number of customers won't even try time limited FREE trials for fear of getting caught in a subscription. Time limited FREE trials are the #1 selling tool for indie developers.

Since "Curation", it doesn't matter which method you use, MAS or direct sales, you need to engage in marketing, this can either cost time, money or time and money. There are two advantages to gearing your marketing to direct sales.

1. Brand protection, when you target MAS, you're strengthening MAS as a brand and not you.
2. More profit per sale.

Finally, there is one more cost associated with the App Store that you don't get with direct hosting. Dealing with the App Store team. Nearly every dev has a horror story or several about the App Store team, "App Purgatory" is when Apple hold up your app for unknown reasons. My longest was 6 weeks for a seasonal application, which crippled the profitability of the app.

What does all this mean?
The Mac App Store is most expensive and challenging way of distributing Mac apps. If Apple were to truly compete, they should at least match existing MOR rates, or better them. Apple could also invest in MAS to improve its features and value.

AFAIK Epic only charge 12%, but as I do not make games (anymore), I've not looked into the services they offer.

> 3. App store can do additional security checks and revoke an app if it is a risk

This service is enforced even outside of MAS, it is hard to distribute an app without Apple scanning it first, and atop of that, they have a kill switch. If you ship or add Malware, Apple can kill the app or all of the developers' apps.

> 4. App store support can handle purchasing issues

Most MORs provide this service, I almost never have to deal with purchasing issues.

Rather than Apple dropping their rate, I would rather see them improve MAS and the services offered there, however I've come to accept that will probably not happen until a leadership change.