Apple have announced new rules for all purchases made on an Apple iOS devices (iPad, iPod, iPhone), where all content purchased via an app will now be subject to a 30% processing fee, with rules forbidding any links to external purchasing methods and ensuring the Apple in-app price is as low as any external option.
Considering the cost of credit card processing is around 2.5%, this 30% levy is obviously hugely profitable for Apple, but it’s extremely damaging for small content producers like self-publishing authors and musicians.
To give you an example of the costs involved, a £10 e-book sold here in the UK via the Apple iPad by Amazon’s Kindle e-reader application will now have a price breakdown of:
- List Price: £10
- Value Added Tax at 15%: £-1.50
- 30% Amazon Publisher fee: £-2.55
- Amazon Delivery fee: £-0.10
- 30% Apple Levy: £-2.55
- Remaining profits for author: £3.30
Adding all these fees together leaves a self-publishing author with just £3.30 out of the original £10, with an amazing 67% removed by middlemen along the way.
While the Amazon fee is high, at least they’re doing some work to justify their margin – storing the content, providing the customer services department, the retail store, etc, Apple are simply skimming an extra 30% off for little or no work.
Similar situations will occur with all music sold, magazines, newspapers, in-game purchases, and pretty much any other digital content sold.
Do you think this is right? Personally, I think it’s unjustified, and definitely a step too far by Apple in attempting to become the gatekeeper for all content on their iOS devices.