About that 70/30 Revenue Split...

iphone_money_bin_appstore.jpg

Make your app free, and Apple will distribute it via AppStore and iTunes for free (and eat the costs, see below). Charge for it, however, and Apple will give you the same deal it gives Big Music: 70% for you and 30% for Apple.

How does it stack up across the commercial space? What do other publishers/distributors take?

Retail? Maybe 50%. Amazon Advantage? 55%. Typical book publisher? 90%. Record industry? (Is there a number higher than 100%?)

Bottom line, out of its 30% Apple is paying for hardware infrastructure, internet bandwidth, software development, maintenance and support, credit card transactions and accounting, and is now adding in update notification, not to mention the unbelievably huge storefront that is iTunes and (will be) AppStore.

Says Apple CEO Steve Jobs:

We don't intend to make money off the app store; the split with the music companies is about the same. We give all the money to the content owners and the developers here, and the 30% that pays for the store, that will be great.

Volume pricing will be the name of the game (or productivity app!)

If Craig Hockenberry of Twitterific fame is any indication, developers may have already figured this out:

Hell yeah. Automatic updates, handling transactions (including refunds, etc.), bandwidth, etc. adds up. People who complain about 30% have never dealt with the retail sales channel.

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, The TV Show, Vector, ZEN & TECH, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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About that 70/30 Revenue Split...

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I agree 100% - this is the right way to distribute apps.
Like I said before, the only real question I have here is what *exactly* is Apple using as criteria for what they'll allow in. Right now it seems like the criteria is "Whatever doesn't hurt us too much, but if it does hurt us, we'll allow it if it's super popular like AIM. You know, basically it depends on how we feel that day."

Nah, I think this will quickly become "have we seen this before". Otherwise you end up with 55 different IM applications. You will have to add value to what's already available.
IMO There are only a few apps that Apple will not allow:
1. VOIP over cellular. Jobs said in the presentation that VOIP over WiFi would be no problem, which kinda surprised me. Not that I care about this app, you understand. I want AT&T to build out the best 3G network in North America, and that takes money.
2. Jailbreak and related apps, including anything resembling a file editor.