Apple Reportedly Planning to Reduce Vig to 15% – Will It Impact eBooks?
That’s the same vig Apple has asked of all games, media services, and app developers for the past seven years, but The Financial Times has given us reason to hope that it will change. They reported on Friday that:
Apple is planning a departure from the pricing formula that has defined the economics of digital media for a decade, which would cut the 30 per cent fee music, video and news companies pay on subscriptions
through its App Store.
The iPhone maker is discussing new commercial terms with media companies, people familiar with the matter said, to change the 70/30 “Apple tax” pioneered by Steve Jobs when its late founder launched the iTunes music store in 2003.
Changing the App Store’s terms of trade could improve the economics of online content businesses and reassure regulators that the company is not abusing its position as gatekeeper to one of the world’s most lucrative digital marketplaces.
As with any unnamed source, you should take the report with a grain of salt.
Update: And with good reason; The FT has already revised the story. They now say that the rumor concerns media companies with service on Apple devices, not services offered through iTunes.
That aside, do you think this will have much of an impact on the ebook market?
I doubt it will have much of an impact on the trade retail market; agency pricing precludes that possibility. But this could have a positive impact on the subscription ebook market (it might also help smaller ebook sellers – publishers, for example).
Both Scribd and Oyster offer a paid ebook subscription service, and one sells the subscription inside its app. Oyster pays Apple 30% of any subscription fee earned via the app, and I would bet they’d love the chance to cut that in half. It would represent a small but measurable boost in income.
Assuming, of course, that the rumor comes to pass. Oh, I don’t doubt that the rumor is true (at least in part), but that doesn’t mean that Apple will actually reduce the vig. There are any number of reasons this might fall through, so I wouldn’t count your gagh until it slithers off the plate.