lfredricks at proactive-intl.com
Fri Feb 18 13:40:59 EST 2011
> I think if Apple maintains it's position they are going to
> alienate the major developers.
That's true, but Apple has not only built up their own software portfolio to
cover key areas for them, they can be assured that at least some vendor will
The more I think about it, the entire subscriptions strategy of Apple seems
purposefully created to force publishers to work directly with Apple and
weaken competitive 'marts like the Kindle Store/Amazon.
Honestly, when looking at resellers of software or other IP, a 30% margin is
not terrible; what is onerous and unreasonable is taking ownership of the
customer relationship. As products mature, a greater percentage of your
revenue comes through upsells and upgrades - the only way to achieve that is
if you have a direct dialog with your customer. Apple knows this. Every
professional software and IP vendor knows this. But like other strategies
recently, these changes which are cripplingly dangerous to vendors are
cloaked in a way that they are too complex or too specific for consumers to
care about. In the end, it makes Apple the hero for offering the option of
participation, and the 'mart the villain for not taking it.
So Apple knows that these 'marts cannot give Apple a 30% margin on
everything, not with present discounting structures. If Amazon tries to
raise their % with publishers, then publishers are highly motivated to deal
directly with Apple, cutting Amazon out of that revenue stream 100% - and
Apple wins. If they knuckle under, then they basically give either all or
the lion's share of their margin to Apple - and Apple wins.
This is Dr Evil level of marketing strategy.
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