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Adam Hodgkin at Exact Editions asks – Too Many App Stores?

The post is full of really good insights -

 Is there something about the investment and infrastructure needed to set up and run an App store that dictates a 30:70 deal?

 …  building an app for the other guy’s store is a sign that you have either lost the market, know that you are going to lose the battle in the long run, or are not really concerned to establish a dominant software or hardware platform for books in the first place.

However, it never really attempts to answer the question that is the title of the post. So let’s do that.

At what point are there too many app stores?

We’ve come a long way from the time when nearly all software was written for Windows, Mac or Linux and users were open to install anything they wanted.

Now we have closed gardens springing up like weeds -

1. Apple’s App Store for iPhone, and soon for iPad.
2. Android Store.
3. Facebook App Store.
4. Kindle’s forthcoming App Store.
5. Thousands of other App Stores springing up.

Not only do you have to develop just for one device/platform you also have to learn a language specifically for that platform, learn their APIs, and so forth.

What are the benefits to users from a closed app store?

Well, quite a few actually -

1. Bad People like spammers can be kept out.
2. Really bad people like scammers can be kept out.
3. Quality Control.
4. Payments and transactions can be done easily and safely.
5. The user experience can be streamlined and the same design methodologies can be followed.

However, there are also considerable disadvantages -

1. It’s closed – you can’t get things in freely.
2. There are restrictions.
3. Some user-friendly apps are kept out. 
4. The platform owner levies a tax – usually 30%.

For the customer there are ample advantages and ample disadvantages and depending on where you stand a closed garden is a good thing or a bad thing for customers.

What are the benefits to the ecosystem owner from a closed app store?

This is a never-ending list -

1. A 30% cut. 
2. Control of the user experience.
3. No compromise of their relationship with the customer.
4. No danger of the customer being stolen entirely. 
5. Everyone has to follow their rules and their sense of ethics.
6. Things are very easy for users.
7. They can’t have a competitor commoditize their contribution.
8. There’s stronger lock-in since apps often don’t transfer.
9. The closed garden can’t be polluted.
10. Customers can’t be exploited thereby ensuring the company-customer relationship stay strong.

Control, profits, uniqueness and a lot more value stems from having a closed garden.

The Internet is the catalyst for the rise of App Stores

The Internet – the ultimate open, free platform – was destroying profits and increasing competition so quickly that companies had no option but to create closed gardens.

Let’s say you build a great device and then sell a lot of it and open it up wide to the Internet -

1. All manner of companies can come in and steal your customers. 
2. Various people and companies can take advantage of your customers and spoil the trust your customers have in you. 
3. You get reduced to nothing but a hardware supplier – a commodity hoping to make 5% to 10% on device sales. 
4. The Internet’s concepts of free and free sharing kill more and more sources of income.
5. You let in infinite competition – some who want to steal your profits and some who want to just kill all profits.

Consider most of the first few app stores and closed gardens -

1. iTunes grew up because Internet privacy was killing music publishers.
2. Facebook’s App Store was a way to give Facebook an advantage over its competitors and the ruthless competition of the Internet. 

It became more and more obvious that to make money from software and content and other things it was usually best to set up an App Store completely detached from the Internet. To let in the good elements such as developers who would work for the promise of huge riches and keep out the bad – concepts of free and cheap, competitors, and people pretending to be good while they fleeced you and your customers.

The App Stores are getting more and more intelligent

The incremental improvements are beautiful -

1. Facebook forgot to take a cut of profits. 
2. Apple fixed that.  
3. Apple let advertisers in (like AdMob) and ended up getting into a bidding war for AdMob and other advertisers.
4. Amazon has learnt from that and that’s why there’s no advertising.  
5. Amazon has also learnt enough to not let in generic readers. 

Each new version of App Store is getting better at figuring out how to keep out the too-evil people and the too-good people.

App Stores are a good thing – they just need to figure out a way to link up

If you’re a content creator or want to get paid a fair amount for your work the Internet is a danger. Sooner or later it will touch your line of work and then everything should be free won’t sound as sweet..

App Stores are creating little pockets of rationality amongst the irrational exuberance of the Internet where people assume everything costs nothing and they don’t need to pay for anything.

The only problem is that the App Stores aren’t linked to each other.

• It could be an actual physical link i.e. a network of closed gardens connected to each other – The Network of Good Intent.
• It could be the use of a common software or platform so that developers don’t have to keep re-writing software.
• It could even be a shared philosophy – We won’t serve 2 million customers for free hoping that 1.87% of them buy the paid upgrade. No Sir! If you want to play in our closed garden you have to be a paying customer.

The ‘you have to pay to get in’ attitude seems so evil. However, it’s actually very reasonable. No one is obligated to serve people who aren’t customers – people who don’t pay anything and expect everything.

As soon as App Stores start linking up their power will magnify immensely – we’ll finally have a Network of Good Intent.

Filed under: kindle app review Tagged: | channel of good intent, network of good intent