Apple's App Store: An economy for 1 percent of developers
Editor's note: This a guest post by Igor Faletski, whose bio is below.Since the Apple App store opened on July 10, 2008, it has paid out more than $4 billion to iOS developers--70 percent of the $5.71 billion it has booked in revenue. Pretty big numbers, right?Well, yes and no. Yes, those are big numbers that make my head spin and dwarf my personal tax return. At the same time, the real answer has to be no.In the mobile commerce world, $4 billion is significant, but it's not a headline. It's more of a line item on a table that includes some much bigger numbers.For example, in 2011 alone eBay accounted for $5 billion in mobile sales, double its 2010 mobile sales. Gartner projects mobile commerce will be a $31 billion market by 2016, with consistent growth of 39 percent compounded annually.The Apple App Store will certainly be part of the mobile commerce ecosystem, but it will be a small part that shrinks proportionally over time for the following reasons. The profitable Apps are free games Digging deeper into the numbers from the Apple App Store reveals that the apps making money are overwhelmingly free games selling virtual goods.Related storiesAll 'new iPad' coverage on CNET (roundup)Hands on Apple's new iPad (photos)Apple's new iPad: Get all the details hereApple's new iPad: Now the company competes with everyoneApple's new iPad: First takeA reasonable guess would be that 75 percent of the payouts from Apple to developers are for games, since that's typically the percentage of games in the top 100 grossing apps. Apple promotes in-game virtual good purchases because it gets a 30 percent cut of every one of those virtual good dollars if you use their payments platform.Unfortunately, the profitability of free games with in-app purchasing creates a destructive, hit-driven cycle that locks out small developers. The successful big studios, with multiple repeat hits, monopolize the discovery mechanisms, rankings and reviews by using all sorts of proven tactics such as incentivized downloads.The system works for a few big players and outlier hits, but the playing field is definitely tilted in favor of the incumbents.As entrepreneur Tony Wright says in his post How to Evaluate a (paid) iPhone App Idea, "The App Store is really mostly a game store. And a free game store at that."Apple's walled gardenThe SDK and developers tools for iOS devices are excellent. No argument. But in exchange for this boost to developer productivity, Apple expects its pound of flesh.Want to use Apple iTunes as the payment method in your app? Say goodbye to 30 percent of your revenue. This makes credit card interest rates look generous. It also makes any type of businesses without enormous margins (more than 50 percent) impossible to run in the App Store.Apple controls the App Store and runs it with an iron fist. Payments for your app may be late and you may be forced to sue Apple to get them. Your app may not make it into the store. Your app may be kicked out.And once you get the 70 percent you're owed from Apple? You now likely owe sales tax. If this is starting to sound a lot like digital serfdom, there's a reason.If developers want to see what the future looks like when you cede control to Apple, they can look at the music industry. It's now beholden to Apple as the gatekeeper to iTunes and the entity with control over access to their most coveted market. The open Web Remember the Web? Right. It was the biggest thing in the past 20 years of business. Now the mobile Web is growing eight times faster than the Web grew, according to Google.The open mobile Web is larger than the world of apps and growing faster. The mobile Web supports all the ingrained Web habits we already have. Search, e-mail and social media all just work already in the browser--the browser that everyone already has installed on their device.But the mobile Web is missing some key tools, infrastructure, libraries, and examples for developers to use and build a better future. This is the problem my company and many other companies are solving. We want to see an open world view beat a closed world view, again.
MusicIP plug-in deejays your iTunes
MusicIP plug-in deejays your iTunes
Late Monday afternoon, music recommendation engine MusicIP released a beta of its MyDJ iTunes plug-in for Windows (available as a free download from the company site). I've spent the last few hours playing with the plug-in, and thus far I'm impressed. Like the company's standalone program, MusicIP Mixer 1.6, the MyDJ iTunes plug-in scans and analyzes your music library to ferret out similar songs and artists. But the standalone software requires you to organize music in MusicIP, then export the playlist to your media player software. The plug-in lets you automatically generate playlists without leaving iTunes.Downloading and installing MyDJ was easy, and after the program conducted a basic analysis of my library I was ready to build my first playlist. (The "extended" analysis takes a bit longer; more on that below.) In iTunes I clicked on a track from my current musical obsession, The Helio Sequence, then moved to the MusicIP sidebar on the right-hand side of the screen. From there I could designate the length of my playlist--based on number of songs, length of time, or file size--and decide whether I wanted the list to favor the style of the song, the style of the artist, or a balance of the two. The plug-in also let me dictate the degree to which the mix matched my selected song, on a scale from zero ("tightly focused") to nine ("very diverse"). Clicking on "Make Playlist" almost instantly generated a playlist inside of iTunes. As an avid consumer of the free mp3s from CNET Download.com Music, I was thrilled to see that MyDJ had called up some really great tracks that were hidden deep in my iTunes library. The sidebar also includes a window labeled "Similar to the selected track," which lists a handful of free tunes that match your song's profile. You can click on a song to give it a listen and, if you like it, click one button to download it and add it to your library. This feature has potential to be amazing, but at this point the catalog of discoverable music seems a bit thin. It offered up the same recommendations for several dissimilar songs, and sometimes none of the recommended tracks seemed like a decent match. The more distinctive the song, of course, the more relevant the recommendations: my southern-fried alt-country tunes achieved more appealing matches than generic-sounding indie rock.Being a beta release, MyDJ for iTunes does have a few quirks. My biggest complaint lies with the user interface, which right now just sits on top of the right side of your iTunes window. There's currently no option to independently move or even resize the sidebar; instead you're forced to resize your iTunes window to leave room for MusicIP. I'd prefer to have a few display options, including placing the control panel at the bottom of the window, in lieu of the iTunes MiniStore. Also, Mac users are left out for now, though the company does plan to release an Mac OS X version "in the near future."A final note of caution: the program's "extended analysis" of music files, which presumably would bring even more accurate recommendations, definitely eats up some CPU cycles. I was glad the program let me choose among Low, Normal, or High CPU usage in the Preferences, but even the Normal level completely monopolized the ancient 1.5GHz Pentium 4 machine that I use as my music server. Those with poky processors or large music collections will likely want to run the analysis overnight. I plan to do just that and will update this post in the morning with any new insights.
Late Monday afternoon, music recommendation engine MusicIP released a beta of its MyDJ iTunes plug-in for Windows (available as a free download from the company site). I've spent the last few hours playing with the plug-in, and thus far I'm impressed. Like the company's standalone program, MusicIP Mixer 1.6, the MyDJ iTunes plug-in scans and analyzes your music library to ferret out similar songs and artists. But the standalone software requires you to organize music in MusicIP, then export the playlist to your media player software. The plug-in lets you automatically generate playlists without leaving iTunes.Downloading and installing MyDJ was easy, and after the program conducted a basic analysis of my library I was ready to build my first playlist. (The "extended" analysis takes a bit longer; more on that below.) In iTunes I clicked on a track from my current musical obsession, The Helio Sequence, then moved to the MusicIP sidebar on the right-hand side of the screen. From there I could designate the length of my playlist--based on number of songs, length of time, or file size--and decide whether I wanted the list to favor the style of the song, the style of the artist, or a balance of the two. The plug-in also let me dictate the degree to which the mix matched my selected song, on a scale from zero ("tightly focused") to nine ("very diverse"). Clicking on "Make Playlist" almost instantly generated a playlist inside of iTunes. As an avid consumer of the free mp3s from CNET Download.com Music, I was thrilled to see that MyDJ had called up some really great tracks that were hidden deep in my iTunes library. The sidebar also includes a window labeled "Similar to the selected track," which lists a handful of free tunes that match your song's profile. You can click on a song to give it a listen and, if you like it, click one button to download it and add it to your library. This feature has potential to be amazing, but at this point the catalog of discoverable music seems a bit thin. It offered up the same recommendations for several dissimilar songs, and sometimes none of the recommended tracks seemed like a decent match. The more distinctive the song, of course, the more relevant the recommendations: my southern-fried alt-country tunes achieved more appealing matches than generic-sounding indie rock.Being a beta release, MyDJ for iTunes does have a few quirks. My biggest complaint lies with the user interface, which right now just sits on top of the right side of your iTunes window. There's currently no option to independently move or even resize the sidebar; instead you're forced to resize your iTunes window to leave room for MusicIP. I'd prefer to have a few display options, including placing the control panel at the bottom of the window, in lieu of the iTunes MiniStore. Also, Mac users are left out for now, though the company does plan to release an Mac OS X version "in the near future."A final note of caution: the program's "extended analysis" of music files, which presumably would bring even more accurate recommendations, definitely eats up some CPU cycles. I was glad the program let me choose among Low, Normal, or High CPU usage in the Preferences, but even the Normal level completely monopolized the ancient 1.5GHz Pentium 4 machine that I use as my music server. Those with poky processors or large music collections will likely want to run the analysis overnight. I plan to do just that and will update this post in the morning with any new insights.
Subscribe to:
Posts (Atom)