Actually, the point of the app store was distribution. That's what the 30% cut was for IIRC. And that's how they sold it, by comparing it to the 50% and more cut that older, traditional channels took at the time of introduction. I don't think they ever even thought about discovery, which would explain why the app store has become such a mess in the first place!
> And now they want to charge me for promoting my app in their store. This should just be a built-in part of the App Store story for the customers. This is why Apple customers pay a premium. Instead Apple sees an opportunity here to make even more money off me / the app authors?
I don't think making money is the main consideration for Apple here. Advertising can also play a useful role as a market mechanism (keyword: "price discovery"). For example, if you spend money to promote your app, you signal confidence in its value proposition. Also, you might be more selective in your targeting. Etc. So the money itself is almost incidental, what we really want here is the information aggregation and surfacing function of a competitive market, the most efficient matching of offers (app makers) and bidders (app users) across an extremely heterogeneous collection of agents.
But it needs to be set up correctly (this is what all the mechanism design literature is all about). Hopefully it is, but I suppose we'll just have to wait and see.
"The App Store makes it simple for users around the world to discover, download and enjoy your apps. "
Discovery is very much part of the deal.
Nobody was paying Apple 30% because that was cheaper than distributing yourself. They paid 30% because without paying that their app wouldn't get discovered, by design.
Now Apple has decided 30% only buys you the privilege of being able to pay more to be discovered.
You are crazy if you think this is a way for Apple to do anything other than capture some of the existing market of app ads, which has been incredibly lucrative for Facebook. They have so many ways to get more information about how useful an app is likely to be for you that they don't use, they don't need another signal.
Maybe not anymore but the app store was launched in 2008. If you look at the percentage a writer or a band makes from a physical book resp. studio album, 50% actually looks very optimistic. Don't forget, there were multiple layers involved, including shipping, wholesalers, retailers, etc. and everybody wanted a cut. There's a reason desktop software to this day has a much higher price anchor than mobile!
My point was that "distributors" or retailers never took 50% as the original post suggested.
If you believe that the reason desktop software has a higher anchor price point than mobile is the multiple layers, please explain why the price point on the Steam store is so much higher than the app store.
Your Steam analogy is flawed due to selection bias - Steam is about games, and games are more similar to movies than apps. People want entertaining content (and a good amount) for that initial price.
Does Steam allow for freemium? What about ad-driven games?
The mobile carriers often charged upwards of that rate to game publishers.
I think it could, to a certain extent. If someone stops supporting an app, I think there's a decent chance they wouldn't both paying money to promote it. At least for the kind of throw-away crap apps that are out there.
Maybe I'm missing something, but it seems like Apple is only doing what every other search system with embedded ads at the top does.
try searching for something like "car insurance" on google with adblock turned off - the majority of the visible page area will be used by some sort of ad unit, and the native results are pretty useless.
In supermarkets, they are. To most consumers, one brand of milk might as well be another brand--even if the tastes is different, it's slight enough to be negligible. So just shelving everything as 'milk' is good enough for the supermarket to handle is distribution duty. Now if one particular brand wants to do better than its competitor, it can pay for placement closer to the checkout section, or pay for a big promotional area for it.
The same might be true with apps. Yes apps have differences, but its not really clear that such differences are enough that there is clearly one app better suited for a purpose than another. Nor is it clear that you can both (a) divine the suitability of any app and (b) match that up with a consumer with any degree of accuracy versus alternatives.
If the above were true, central planning via the app store would be great. Since it's not... well our best known solution is capitalist market action which opening up the store to advertisement allows.
Search ads give companies a legitimate way to promote apps within the app store, outside of editorial or bad tactics to game search results (title keyword stuffing, keyword highjacking etc).
The App Store is where the customers are, so it makes sense to allow advertising here. Otherwise the alternative Google or Facebook where you're changes of conversion are such a great deal less because you're so far removed from the channel.
It's like the difference between being offered fries at the fast food counter compared to a banner ad. It's clear it's going to be better for all involved to be offered something in the better context.
iOS customers don't have the choice but to go get their apps on the appstore. Saying that is redundant.
How has it become free? Honest question, as I'm not sure what you're referring to.
Still need a paid developer account in order to publish to the App Store.
Hats off to Apple. First, they charge developers to even develop for their platform (though this has become free off late). They only allow developing on their Macs. Then they take 30% cut of apps and also in-app purchases. And now they want more money to promote stuff in their store. I don't know what to say. I am sure this will be a raging success as well :/