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What % Should Apple And Google Be Taking?

February 17, 2011

For anyone intersted in the creation of media content the piece below by James McQuivey of Paid Content makes for some sobering reading. As a colleague told me two years ago technology companies are selling expensive chip driven hardware and network driven data plans -on the back of the appeal that is created by the content created by journalists, musicians and other creators.In the clamour to reach the potential gold of sexy new users the content creators have bent over to supply. It is well known that the biggest winners in the gold rush were Levi jeans, the banks, railroads and shovels: all selling stuff to the gold miners, who thought that their reward would come later.

Of course, media technology opens up a superb new channels to market brands and content. But in a world where record comapnies, news corporations and supermarkets have to survive on single digit margins – is it really right for Apple to charge 30%? Could you imagine any other part of the supply chain expecting that? Google charges app developers nearer 10%. With the rise of Pads and Tabs – the market for ‘markets’ will grow and grow. There is already strong rumours of both Apple and Google/Android are looking to launch ‘passes’ that will allow users to access whole range of press and magazine content from certain publishers to load into their new devices. It sounds exciting – and being a user of a Tablet myself there is no doubt that this next 12 months will see dramatic changes the media landscape as more and more of us will pick up the smoothness and speed of an iPad/Tablet habit. And yes – of course, Apple and Google/Android should be congratulated and rewarded.  But – and it is a big but, the question of mass free or low cost distribution of content, supported by brands that make a fortune by selling very expensive hardware is not going to go away. Of course in a capitalist system, it is entirely up to Apple, Google/Android and no doubt later – Microsoft-Nokia, what their markets will distribute and how much they are willing to pay those that supply the content. Apple especially is treading a thin line – and media content owners have long memories. In the same way that they ask consumers to ‘book an appointment’ to pick up their products they are treating valuable and highly skilled content providers with a lack of love and respect. Sooner or later content owners will have to make a choice: can they survive by taking the scraps from the table? via Do The Math: Here’s The Percentage Cut Apple And Google Should Be Taking.

One Comment
  1. For me it’s a question of where does the power now lie. Once upon a time when food was scarce the power lay with farmers producing meat, eggs and milk. Today when food is plentiful the power lies with the distributors: Sainsbury’s, Tesco’s and the like.
    In pre-internet days when content was scarce the power lay with the publishers producing news, magazines and music. Today when content is plentiful, the power lies with the distributors: Google, Apple and the like.
    Good thing or bad? The jury’s out.

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