Saturday, April 26, 2014

comiXology Removes In-App Purchase

comiXology (recently purchased by Amazon):

We have introduced a new comiXology iPhone and iPad Comics App and are retiring the old one. iPhone and iPad users will now buy comics on comixology.com and download to the app.

In other words, they don’t want to give Apple 30%, which means that by the rules of the App Store there can be no purchasing within the app at all. The Google Play version does allow purchasing within the app, without giving Google a cut, since Google allows that. But then you presumably have to enter your credit card information in the app or store it on their Web site. I still think it would be to Apple’s long-term advantage to offer much cheaper payment processing. Apple would still make money, and the user experience would be better.

Update (2014-04-28): Gerry Conway:

By forcing readers to leave the app and go searching the Comixology website, add books to a cart, process the cart, return to the app, activate download, and wait for their purchases to appear, Comixology has replaced what was a quick, simple, intuitive impulse purchase experience with a cumbersome multi-step process that will provide multiple opportunities along the path for the casual reader to think twice and decide, ah, never mind, I don’t really want to try that new book after all. I’ll stick with what I know. Or worse, when a new casual reader opens the Comixology app for the first time and sees that THERE ARE NO COMICS THERE, and that he or she will have to exit the app and go somewhere else and sign up for a new account, maybe he or she won’t bother buying a comic in the first place.

He thinks this is about about advancing the Kindle platform rather than Apple’s 30%. I don’t think this argument makes much sense economically or strategically. Amazon is in the content business.

Update (2014-04-29): Moises Chiullan:

By purchasing ComiXology what was previously ComiXology’s “piece of the pie” is now Amazon’s. That piece grows, but the publisher’s portion also grows, and therefore the amount that can be paid out to creators is larger. I asked ComiXology’s Mosher directly: Will the reduced overhead mean that more revenue can and will go to creators, whether they’re big-time publishers or independent creators? “Yes,” he said.

Update (2014-05-12): I really enjoyed John Siracusa’s take on this issue.

3 Comments

Does Amazon take a cut of sales on Amazon.com? 30% seems reasonable compared to most other distribution models, including retail.

Don't forget the angle about Apple policies on acceptable content too: some comics like Fraction and Zdarsky's Sex Criminals were not available as in-app purchases, so while they were available on comixology.com already, now they won't be invisible to most Comixology buyers (from http://comicsalliance.com/comixology-ios-app-store-apple-reader-web-amazon-kindle/ ).

As I asked on Twitter ( http://twitter.com/wanderingcoder/status/460233821653577728 ), is there a significant number/volume of digital content in-app purchase SKUs left? (outside of subscriptions).

However, while 30% is as far as anyone can tell too much for content in-app purchases, Apple can justify a payment processing fee larger than most credit card processing fees, as Apple iTunes credit is being distributed in physical stores pretty much everywhere, so one does not even need a credit card to buy on iTunes, while the stores carrying iTunes cards certainly don't buy them at cover price (they're not going to carry it for no benefit!), not to mention they need to be shipped somehow, so this money has to come from the fee Apple takes.

"Apple can justify a payment processing fee larger than most credit card processing fees, as Apple iTunes credit is being distributed in physical stores pretty much everywhere, so one does not even need a credit card to buy on iTunes, while the stores carrying iTunes cards certainly don't buy them at cover price (they're not going to carry it for no benefit!), not to mention they need to be shipped somehow, so this money has to come from the fee Apple takes."

No doubt! Apple could certainly justify a payment processing fee incredibly larger than credit card processing fees. 5% would be exorbitant by credit card rates, more than cover gift card net expenses, and folks would still basically be willing to deal with the resulting marketplace.

Hell, I'd even finally give them my credit card number after all these years if they went with that kind of ridiculously rational thinking...

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