
Apple's Indies - davidbarker
http://www.elischiff.com/blog/2015/6/23/apples-indies
======
exelius
I'm gonna go out on a limb here and guess that the only reason Apple caved is
that the dollar amount was too little to be worth any amount of negative PR.

Apple is a $300 billion/yr company. They will not risk that revenue stream
(which is largely based on their positive brand image) for a few points of
margin on a product that will probably never be more than 0.01% of their
revenue.

Kudos to Apple for recognizing that this is something they absolutely don't
care about. The value of their brand is worth more than this. I just worry
about the volume of new products coming out of Apple these days and wonder how
much care and thought goes into them.

~~~
acron0
I'm afraid I agree with the alternative sentiment, that is to say that this
whole thing is a 'PR hoax'. Kudos to Apple for playing the game and coming out
looking like the benevolent and merciful master, humbled by the pleas of his
peons.

~~~
exelius
No company will ever intentionally bring its contract terms into the public
spotlight. Not to mention the amount of coordination this would take is just
too risky for a PR stunt. Apple would have been better off just paying Taylor
Swift some money for exclusive streaming rights. It's not like they need to
save money through use of guerrilla marketing.

~~~
takeda
It still helps them to look better against already established Spotify.

~~~
exelius
Yeah, they reacted well. I just don't think it was planned this way from the
start.

------
k-mcgrady
This is pretty ridiculous. There's very little comparison.

1\. Apple didn't respond to a letter from Taylor swift in < 24 hours - this
had been building for a week or two as large indie labels made their opinions
public and let's not forget it's rumoured that Apple was having difficulty
signing any indie labels. I would be shocked if Apple hadn't been considering
this for weeks already.

2\. App devs - of which I am one - get a decent deal. It's simple, clear cut,
and quite high especially when compared with how things are in brick and
mortar stores.

3\. There is no comparison here anyway. When Apple TELLS developers that you
can only have your apps on the store if you give up 3 months of revenue then
there is one.

~~~
mikeash
It's nonsensical to compare to brick-and-mortar stores. We didn't go from
brick-and-mortar to the App Store. We went from direct internet sales, where
we got to build whatever we wanted, ship updates instantaneously, and keep 98%
of the revenue, to the App Store.

~~~
adambratt
You're forgetting all the money that we had to spend on marketing.

~~~
mikeash
The marketing picture hasn't changed for 99.999% of developers. Unless you're
fortunate to get featured by Apple, you still have to do all the work
yourself.

------
hiou
The whole thing between Taylor Swift and Apple is so obviously staged. The
fact that this was done over Twitter, the most shareable possible format, the
"Love, Apple" bit the wording of all of it. The need for Apple to position
itself as the Artists streaming service. How are we seriously talking about
this as if this actually happened unscripted?

Edit: It's a common negotiation technique to add something that you know the
other party will object to. Since there will always be push back it's good to
have something you can sacrifice that you never really needed in the first
place to appease the other side.

~~~
kylnew
Reminds me of a story of a photographer that would leave their hand in some of
the shots deliberately so the client would point them out and spend less time
nitpicking on the rest of the composition.

------
pbnjay
Apple wants access to Swift's market. Devs want access to Apple's market.

Simple supply and demand here - the demand side has to pay or otherwise they
don't get in. Sure it sucks that the policies aren't very transparent and
things are expensive, but them's the breaks.

------
pluckytree
The likely reason for all this is Apple not wanting to be accused of engaging
in anti-competitive behavior. It’s illegal to use your market power and
financial position to sell products below cost and thwart real competition in
the market. This is why they offered higher royalties later and no royalties
for 3 months. It was designed so artists would get the same amount in the end
but unfortunately have to wait 3 months to start getting in.

Apple’s reverse in direction is interesting. Perhaps they feel the risk is not
as high as they were expecting. Apple gets sued every day of the week, but
something like this could be very costly. Perhaps they know the financial
benefit outweighs the risk.

Claiming Apple doesn’t care about artists is absolutely ridiculous. Except for
a few high-profile critics, artists view iTunes as saving the music business
and allowing even small-time artists to make a living without needing to sign
with a label (other than with one of the labels that specialize in this sort
of thing and for which artists don’t need to qualify).

------
cpr
Seems like this is a lost cause. With nearly no action after 7+ years, Apple's
not going to change the app store fundamentals.

But, boy was it exciting at the start! Shed a few tears and move on...

~~~
coldtea
"No action" you mean like them adding in-app-purchases, better monitoring,
easier provisioning, faster submission and check process, unified iOS+Mac
subscriptions, bundles, and tons of other things?

~~~
cpr
Yeah, by no action I mean no substantial action that would seriously increase
developer revenues like:

trial versions without hacky in-app purchases;

paid upgrades;

actual working app discovery;

etc.

~~~
zw
Trials and upgrades are niceties for the developer, not the user. The App
Store isn't made for developers, it's made for users. If developers want
access to those users, they should build businesses not oriented around
extorting money to fix their technical debt.

~~~
cpr
Sure, but if users want developers to stay in business, the latter need
recurring revenue from ongoing investment.

"Extorting money to fix their technical debt". Really?

------
drham
It's not _just_ about Taylor Swift having way more pull than any developer,
she was also presenting Apple with a problem simple enough that it could
literally be solved by throwing money at it.

As Rob Napier pointed out in a great blog post [1]: The app store
sustainability problem is definitely not the sort of problem you can just
throw money at, and thus can't be responded to by Apple with the same way.

Even in this article it is immediately apparent there is no consensus among
the affected as to what the real problem is: Is it lack of free trials? Paid
upgrades? Review times?

[1] [http://robnapier.net/throw-money](http://robnapier.net/throw-money)

------
snowwrestler
At least some of the complaints of indie devs like Cabel Sasser relate to the
technical restrictions that Apple places on Mac App Store apps. Based on
statements by Apple, these restrictions are, to Apple, important from a
security standpoint.

Thus it's probably going to take more than complaints to resolve them. It's
going to take Apple engineers figuring out how to permit more power for good
devs without creating holes for malware.

Apple is well aware of the shortcomings of the Mac App Store model, which is
why they continue to provide an official, supported path for apps to be
installed on Macs from outside of the App Store.

From a money standpoint, Taylor Swift is getting 1.5% more from Apple than App
Store developers are...doesn't seem like that much to me. As far as I know,
there is no "download and try it for 90 days" feature in the App Store.

------
bedhead
Taylor Swift's got juice. Indie devs don't. In other news, the sun is hot.

~~~
seqastian
Taylor Swift is young and wants to be richer now and not wait 50 years until
streaming nets here the same. Indies will have to make they money from live
events and t-shirts anyways.

------
vinceguidry
The author seems excessively concerned with the language people use to
interact with Apple. It would seem to me that a simple application of "you
will catch more flies with honey than with vinegar" is all that's at play
here, and that the author is tilting at windmills.

Apple's a big, powerful company, it's hard for one hand to know what the other
hand is doing sometimes. All such companies have to rely on their customer
base to guide them. If you think about it, Apple is far more responsive than
most other companies their size or in their segment. Jobs used to answer
emails ferchrissakes.

------
serve_yay
His criticism of Gruber (and others) is apt, and important. Even when these
guys are being honest about the flaws in the things Apple makes, they offer
very little structural critique of what has become the most profitable company
in the world and a major driving force in the tech industry.

~~~
Yhippa
I imagine if they are truly critical they are putting their jobs on the line.
Apple will probably cut you off from them in a heartbeat.

------
mosdave
> most musicians do live shows out of necessity, not by choice.

This is absolutely a correct statement, but not in the way the author
intended. A writer writes, a painter paints, a musician performs. Not by
choice but out of necessity.

~~~
mavdi
Erm... no. They mostly love what they do and would do it as a hobby even if
they didn't get paid for it. However musicians absolutely despise most kinds
of live shows.

~~~
malnourish
Where is your source for the latter half of your claim? I go to a plethora of
local and small-medium sized concerts and I often get a chance to talk with
the performers, they love sharing their art to a hungry crowd.

------
saturdaysaint
A request to tweak Apple's music contracts that amounts to a rounding error on
their quarterly profits is not exactly analogous to requests to change Apple's
software platform strategy (which the OP leaves annoyingly vague).

------
jusben1369
"Reminder: Apple uses music to make billions off hardware. Artists see nothing
from this."

\- I have never seen the exact numbers but I assume a lot more people have a
portable music player with them at all times (iPod then iPhone) than they did
a decade ago. I can only speak anecdotally but I buy more music because I know
I'll have it with me at all times than I did in the portable CD/tape days.

~~~
protomyth
Well, record player companies made money off of Artists without paying them.
This is a basic secondary market (hell, parking garages make money off
Artists) and has nothing to do with the direct making of money on music such
as a subscription service or actual record sales.

This argument has actually been used to tax blank CDs which is bull. Should we
tax all parking lots when a game or Artists is playing near them? Taxing the
ecosystem because some group determined their part of it is more important is
foolish.

------
PaulHoule
Not much new here.

Apple has been shafting developers since at least 1987.

~~~
coldtea
Yeah, creating all this multi-billion dollar app market and all, what a
shafting...

~~~
WorldWideWayne
Without apps, Apple has nothing. Developers should get 30% of the profits from
Apple's hardware business.

~~~
coldtea
> _Without apps, Apple has nothing._

Actually Apple managed to make the iPod a huge success, and the iPhone for the
first year too, without any apps. They built a market of billions without any
apps. Only then did apps appeared with the first SDK.

~~~
WorldWideWayne
Nobody is making money selling phones that don't have apps. Apps are 100%
necessary for a smartphone to survive.

Apple simply could not have a successful mobile platform without apps.

~~~
coldtea
> _Nobody is making money selling phones that don 't have apps. Apps are 100%
> necessary for a smartphone to survive._

Now yes. In the start not.

Nobody is making money selling PCs without apps either. Are desktop app
programmers demanding a pay cut from PC sales?

~~~
WorldWideWayne
I was being facetious about getting 30% from Apple.

My point is, that they are and always have been assholes to devs, who they
need.

~~~
coldtea
I don't know, as a dev I like their APIs, tooling, market access and efforts
to improve their environment (ObjC 2, now Swift) very much, thank you.

------
rebootthesystem
So...iOS app developers band together to protest the fact that Apple uses our
apps for marketing purposes and to make the platform more attractive to
buyers. Yet, they don't pay us a dime.

It's the same mechanism, isn't it? The iOS platform became attractive to
buyers due to the HUGE investment on the part of developers who created free,
freemium and paid apps for the platform. Apple has been using all of these
apps in their marketing campaign since day one. The platform without apps is
worthless. Ergo, the apps give them value and make them desirable.

And so, Apple created a slippery slope of an App Store model where just about
the only way to have a shot is to give your work product away and hope to
monetize it through paid upgrades or advertising. Failure on the App Store is
the norm, not the exception. Yet, again, Apple still benefits from your
free/mium app being there and they never pay you a dime for it.

Are there parallels between this and music? I think one could very well argue
the case to be so.

------
Tloewald
I see a new trend emerging in response to the Swift letter / Apple response --
the idea that Apple is exploiting artists and is no better than anyone else in
how it treats people.

The funny thing, it's _everyone except Apple_ that gets a free ride from these
discussions. First -- Apple _is_ in fact offering a better deal to artists
than pretty much anyone else. It's possible Amazon matches Apple in some cases
-- as a book author, I know Amazon's "matching" of Apple's 70% is a sham (you
only get it if you price your books low, lower than makes sense in many cases,
otherwise your royalty is _halved_ \-- and even then they subtract "download
fees" based on the size of your book from your 70% (or 35%)). When Apple
entered the market, 70% was far and away the best deal in town. Since then
it's only been exceeded by players trying to make a beach-head.

(Incidentally, Apple is going to pay the same percentage of its _revenues_ to
artists as everyone else -- but Apple Music _has no free tier_. In practice,
Spotify and Pandora have minuscule revenues. 70% of almost nothing is
nothing.)

A guy from Pandora chastising Apple for not being altruistic is simply
disingenuous. Quoting that guy as an example of the industry being loath to
criticize Apple for fear of ... something ... is even more dishonest. (Let's
face it, at least part of the reason both Swift and the guy from Pandora
couched their criticism in praise is that they aren't disinterested parties --
they're trying to make money too. Being nasty might just draw attention to the
fact Taylor Swift is arguing for Apple to give her more money when they aren't
collecting any. If a musician's agent or the record company has tickets to
give away, do they pay for them? I doubt it.)

The bottom line argument is that Apple is offering a free trial loss leader
and took the view that it would pay artists X% of what it collected, and X% of
nothing is nothing. (A record label or hollywood studio would subtract accrued
costs from future royalties, but hey who's counting?) Taylor Swift argues that
Apple is taking more value away from the free trial than musicians -- she may
be right, or it may be Ping all over again -- but she has a bazillion
followers and she's Taylor Swift, so Apple immediately caves. (Hey, they named
a programming language after her, what more could she want? j/k)

If you sell a CD through a record label, or a movie through a studio, or a
game through a games company, you don't see royalties until production and
marketing costs have been paid, and Hollywood and the Labels have become
masters of padding their costs. For this reason, most artists use their albums
as promotional tools for their live performances, and have done so since long
before Apple.

~~~
tfigueroa
The Pandora guy, Tom Conrad, retired from Pandora; though I'd guess he still
holds shares, I wouldn't say he's "trying to make money too". He's ex-Apple,
pro-Apple, and was CTO of a tenacious music streaming company - all very
relevant experience to comment on this.

His point, which I share, is not to chastise Apple "for not being altruistic"
\- it was that Apple tried to play the game with very different rules than
most companies do. It's worth calling them out about it, especially because
they are the Goliath.

~~~
Tloewald
Thanks for the correction on his status w.r.t. Pandora. I'll give him the
benefit of the doubt and suggest he's disinterested then. But, calling them
out for having straightforward royalties?

BTW the direct quote is:

"Nothing here to suggest Apple treats artists more fairly than anyone else."

Apple _was_ going to pay as well or better than everyone else (actually a
touch more, but no big deal) before agreeing to pay royalties when it isn't
collecting revenues.

And again, Apple _has no free tier_ \-- Pandora's free tier (95% of users)
generates very little ad revenue and that's presumably where artists get their
46.5%. Spotify has over 25% paid users (and is _losing money_ paying out 70%
of revenues).

Here's a quote from a somewhat misleading blog post ranting about Pandora's
royalties:

"Here’s an idea. Why doesn’t Pandora get off the couch and get an actual
business model instead of asking for a handout from congress and artists?"

Apple created a sustainable model for musicians in the age of
Napster/Limewire. Now it's trying to do something similar in the age of
Spotify/Pandora, and it's doing it with a (potentially) sustainable business
model that pays at least as well as anyone else. But until now it wasn't just
giving money away.

Let's put it another way: Pandora, Spotify, et al are trying to build
businesses by _giving away stuff that isn 't free_, and have the temerity to
complain when a company that has an actual business model (buy stuff for X and
sell it for more than X) tries to compete with them.

~~~
Tloewald
@tfigueroa

Pandora pays per play and effectively pays out 46.5% of revenues. Spotify pays
out 70% of revenues and loses money. Apple is promising to pay ~71.5% of
revenues. Just on that basis, Apple is paying more. (Spotify's 70% isn't worth
much if it's not sustainable.)

Now, how Apple will pay for plays in the free trial period is probably by
treating free trial users as though they are paying users for purposes of
paying artists. I.e. they're paying for promotional tickets (which the labels
do not do AFAIK -- that would be a marketing expense that comes out of your
royalties). So they're still (probably?) not paying per play.

The point is, Apple was going to be 100% paid (aside from free trials), so
that's a hugely better deal, and now the free trials are being paid out to
musicians, which is the equivalent of a distributor eating marketing costs,
something record labels, movie studios, and games companies never do.

~~~
tfigueroa
That's apples to oranges. Pandora and Spotify pay artists per spin; the more
you play, the more you're paid. Apple paying a percentage of revenues is an
entirely different method, and it doesn't explain how that money is
distributed. So, it isn't clear that Apple's ways are any better (or worse)
than what's already happening. More information about the theory and reality
of the payments is needed.

I get your point about Apple Music being otherwise 100% paid and now eating
the cost of a free trial, but the alternative was _artists_ eating the
(opportunity) cost. That's not very nice, especially given that Apple can
afford it.

Besides, holding up Apple against the behavior or record labels, movie
studios, and game companies - that's a pretty low bar, honestly.

~~~
Tloewald
> Besides, holding up Apple against the behavior or record labels, movie
> studios, and game companies - that's a pretty low bar, honestly.

Totally true, no question. My point is being that all the other actors are
worse.

BTW Spotify and Pandora "pay per spin" but Pandora's payment turns out to be
pretty low, and Spotify's is calculated to add up to a fixed portion, so how
it is _really_ paying per spin? It's the radio stations that actually pay per
spin, but they don't pay per listener, so that's also a joke.

------
joshstrange
Look I agree with most of the points raised here but:

> 2\. Apple can pivot in less than a day.

I seriously doubt this happened. I think it's crazy to believe that Apple
changed it minds due to this one blog post. More likely they had been planning
this announcement for some time and possibly moved it up a little bit due to
Taylor.

------
allsystemsgo
Would it not be mutually beneficial for Apple to relinquish their 30% cut from
app sales? More developers would focus on iOS (because of the money), they'd
make better quality apps, and Apple would sell more hardware.

~~~
drham
Though if Apple removed its cut it would likely be even less incentivized to
fix thing like app store review times/app store discovery, as those teams
would suddenly become pure cost centers.

------
nr152522
Developer reactions have been mixed: Daniel Jalkut of MarsEdit exclaimed,
"Damn, I wish Taylor Swift were also a Mac App Store developer."

And perhaps build a new music app named 'Taylor' in Swift?

~~~
mrmondo
It would be interesting to see what would happen if someone like blizzard said
something similar about the App Store.

~~~
dpcan
I think Supercell is more the Taylor Swift of the App Store.

Maybe if they threatened to turn off IAP on Clash of Clans until Apple made
the developer split more fair, then we'd get a response? But then again, this
could be apples and oranges.

------
higherpurpose
Unless it was all a PR stunt, then it all makes some sense. Let's see if Apple
responds to the _next_ music indie the same way.

------
ChrisLTD
Isn't it possible the Apple flattery is genuine?

------
skeltoac
Pull request failed ingratiation testing.

------
mesozoic
I guess Apple is getting into making music now. They sure are playing Taylor
Swift and the media like a fiddle.

