It’s hard not to be impressed by how elegant and profitable the app store model is. Let’s start by looking at a few ways in which an App Store is the opposite of Book Publishing.
App Store as Anti-Publishing
Book Publishing really starts to show its age when you contrast it with an App Store.
Make money off of successes and failures
An app store does two very smart things -
- It transfers most of the risk to the app maker.
- It makes money off of every purchase. Even before the app maker has broken even the platform is getting paid.
In the Publishing Model the one big success has to cover the five failures.
Investment and Branding is primarily in the platform and app store
Publishers invest in authors and then authors become brands while Publishers remain unknown. Publishers also invest in their infrastructure – However, most of the investment is in authors.
The App Store invests in the platform and assigns branding to the App Store. Even successful apps contribute more to the branding of the App Store than to their own branding.
By investing in the platform you contribute to every single app and to every single user’s experience.
Far more approaches and perspectives are allowed
Publishing has to go for the big hits because they are what keep the business afloat. With an App Store you don’t really need to focus on creating huge hits.
All the investment in an App is by the developer so any perspective that falls within the rules of the App Store is let in. If you want to create and send out a particular idea – you just need to create the app and not break the rules and you’ll be let in.
Developers complain because they only have 90% freedom – However, with publishing books you have 10% freedom. Perhaps even less.
There are lots and lots of apps that the App Store company itself would never make and some it wouldn’t even think of. They get made and enrich the App Store.
Niches get served much better
Related to the above is that you can create an app for just one niche without having to worry about financial feasibility.
Anyone interested in creating an app tailored to a small niche is free to do so.
Users or App makers pay for delivery costs and when it’s users they pay implicitly
In the App Store you dissociate the costs.
Logically we ought to consider that the $2 app also includes our data plan. However, we don’t. It’s still a $2 app and much cheaper than a $10 book.
Even in the Kindle App Store it’ll be developers that pay for the bandwidth costs and not Amazon. Users will be paying for it implicitly but not explicitly.
Everything further ties users to the App Store
If a user buys an app and then leaves the platform the app is gone. Contrast that with book publishing where users can leave at any time and take their books.
App makers, users, and the App Store all have to invest and it’s good for the eco-system.
Lock-in means that more investments can be made in the platform and there is a steady stream of income that’s almost guaranteed.
It doesn’t stop there.
Strong Additional Benefits an App Store provides
There are actually some even stronger benefits.
Huge Rewards for Success and Huge Share of Sales
For the 2% to 3% of developers who strike it big the 70% share is huge. If you’re a writer or in any other ‘published’ profession if you hit it big you get 15% royalties.
It means that the Publisher is making much more than you are. It means that the best are subsidizing the bad and the mediocre. At some level your hard work is benefitting other people more than it’s benefitting you.
With an App Store you’re still making the platform rich – However, if you succeed you’re getting most of the money. It’s much easier to see other people make money from your hard work if you’re getting 70%.
The Platform takes care of almost everything
Another reason giving the platform 30% isn’t painful (in addition to the fact that you get 70%) is that they take care of a lot -
- Placing your product in front of customers.
- Providing customers of good intent – who are willing to pay money instead of expecting free.
- Handling most of the support costs and all of the channel maintenance costs.
- Billing and Payments.
- Handling International Markets.
- Making sure your work isn’t pirated.
- Getting reviews and ratings from customers.
All the scary stuff that you don’t like and want someone else to take care of – the Platform handles that.
Users get a lot more features including very innovative ones
The variety and number of apps created is enormous -
- People create apps that they want for themselves.
- People create apps for niches.
- The hunger of a developer who has nothing to lose can’t be matched by a company.
- Innovation isn’t stopped by things like realism – Sometimes developers will create apps that seemingly have no market or have a target market of 100 people.
- You get a lot of apps - Get 10,000 developers working on making apps and you have a workforce that can match nearly any tech giant.
An app store increases the number of developers working to make your platform better by a huge number. Plus you aren’t paying any of them unless they get sales.
Relentless Competition and Constant Improvement
The winners get huge profits. The losers get almost nothing. This means that the incentive to improve and win are huge.
If an App does very well there’ll be competitors in a few weeks or months. The App has to improve or an improved competitor wins. In either case it’s better for customers.
Low Barriers to Entry
There isn’t a very hard process to navigate and you don’t need huge investments.
The much-maligned app review process pales in comparison to getting a bank loan for a business or getting a book deal from a Publisher.
Usually users are willing to pay for bandwidth. The Platform takes care of the device and maintenance. All you have to do is make your app and send it out.
Users are protected
Users are protected since the Platform company is doing the policing.
Perhaps one of the top three concerns of users is whether a site is safe – Whether they can trust it with their credit card information. Whether they’ll get what is promised.
An app store takes care of all of that because you have a big brand like Apple on it.
Credit Card information is on hand and Payments are easy
Hand in hand with users being protected are several interlinked benefits -
- Users don’t have to enter their credit card information.
- Some App Stores don’t allow returns which makes things amazingly simple.
- It’s easy to pay with 1-click.
- Users don’t get to see their bill until they get their email receipt so it’s all very detached from the pain of spending money.
- The Platforms have lots of experience with making people comfortable with the payment process and how to avoid distractions and confusion.
A user is much likelier to buy your app from an App Store than from your own website.
App makers are protected
The DRM and closed nature of a Platform that gets railed against is exactly what ensures App makers aren’t ripped off.
On the Internet someone can take your content or your application and share it on file sharing sites and sell it themselves and do all sorts of underhanded things. In an App Store you’re protected.
The App Store is one central point to get Apps
The importance of this can’t be understated.
- People know where to go.
- People could reach your app from bestseller lists, latest additions, from pages of similar apps, and from a lot of other sources.
- It’s easy for users.
- It’s easy for developers.
It’s just a relief to not have to wonder about where to go to get apps.
eReader App Stores and Books under an App Store Model
There are two important ways in which eReaders and eBooks can profit from the App Store Model
- eReader App Stores that add new features and make eReaders more useful.
- An App Store like model where Indie Publishers and Indie Authors get 70%.
Let’s take a quick look.
eReader App Stores can make eReaders much more valuable to readers
Let’s say that there are hypothetically 100 features an eReader company is aware of that would add value for users. It can only get 15 done – it doesn’t have unlimited resources or unlimited time.
However, with an App Store it can work around its limitations.
- An eReader App Store would add at least 25 of those 100 features. Perhaps more.
- The more popular ideas would see multiple entries and you could see what users want.
- You would get an additional 50 features that you hadn’t even realized customers would value.
- All these are features that your competitors would probably not have the bandwidth to match.
- For the users it’s as if the feature came from the eReader company - and in a way it did.
Of course, it’s only after the first eReader App Store comes out and if it succeeds that we’ll see the power.
The App Store Model can be used for Books
At some level it seems fair -
- Platform companies make money off of every single book sold.
- Better authors (or better author/publisher combinations) make a lot of money while the worse ones struggle and go bankrupt.
Even Publishers should be OK with this model – 70% is more than they get from retailers. Of course, it also makes the Publishers relatively unnecessary and perhaps that’s what they’re really afraid of – Top Authors realizing that getting 15 to 25% on ebooks is highway robbery.
There will be an argument made that quality of books will suffer. However, the rewards will be so great for the winners that people will be willing to invest more and take big risks.
The author of the Harry Potter equivalent of 2015 might get 70% of the profits.
If that isn’t motivation – don’t know what is.
App Store Model = Efficiency
At the core of it an App Store Model is about efficiency.
The platform company does what it does best. App makers (or authors) do what they do best.
The best authors and developers are richly rewarded and the bad ones are penalized.
Costs are split out – Users can get apps really cheap because developers get a larger cut and loads of other users are buying the same apps. Developers get a larger cut because the platform removes and reduces costs.
Everyone wins – except the middlemen stuck in the past.
Filed under: kindle app review Tagged: | ereader platform, kindle app store
