Is Apple about to give Android a boost?

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Here’s what could happen if you’re a paid-for content provider and you invest in publishing your content on a proprietary platform that you don’t control – the platform owner turns around and decides to take 30% commission on every piece of content you sell.

This could really backfire on Apple. This year, we’re likely to start seeing a bunch of Android tablets come on the market and if publishers end up making 30% less revenue on iOS than they do on Android, it could lead them to focus more on the Android platform. Even if Apple backs down, a certain amount of damage has already been done – content providers will be taking a closer look at the terms and conditions they’re signing up to, and thinking about the longer-term implications of committing themselves to a content-delivery platform controlled by a company that’s willing to change the rules without consultation and relatively little warning.

It’s not completely unheard-of for a hardware manufacturer to take commission from content providers – that’s how the console gaming market works. The difference is that console manufacturers like Sony and Nintendo sell the consoles at a loss and rely on the fees they receive from games publishers to generate a profit over the long term. Apple make a profit on each iDevice they sell. Taking a commission on subscriber content seems a little greedy and, in this situation, being overly-greedy could result in Apple throwing away its first-mover advantage in the tablet business.

Photo: A lone Magellanic penguin on the beach at Gypsy Cove, near Stanley on East Falkland island in the South Atlantic.

Written by jackgavigan

January 27, 2011 at 9:03 pm

Posted in Openness

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