The last time I saw a breakdown, the iTunes Store $ (for a song) went something like this:
$.03 to the credit card company (special rate for Apple)
$.02 profit to Apple
$.25 Store Costs, Servers, Bandwidth, Admin (some Apple, some 3rd Party)
$.70 Record Label
The record label pays the artist $.10 (and bitches at Apple to let them charge more than $.99)
I suspect the breakdown would be (somewhat) similar for games and other apps sold and distributed by 3rd party "software" labels
Lets just look at a few costs that you might incur if you were to sell your app on your own site:
$25 month web site development ( $500 prorated over 20 months)
$15 month web hosting
$100 month Shopping Cart ($2,000 prorated over 20 months)
$25 month download & encryption software ($500 prorated over 20 months)
7% credit card costs per transaction.... if you could even get a merchant account and accept credit cards (Prolly requires maintaining a minimum $25,000 balance in an account, and $1,000 up front)
So, after several months preparation, with several thousands $ spent, out of pocket, you are now ready to sell some apps.
Oh, how will anyone find you... Simple, You advertise (invest in future sales). What's a reasonable amount to spend per month $10? $10,000?
Gee, that $99 and 70/30 split starts to look like a pretty good deal!
Friday, March 07, 2008
Explaining The 70/30 iTunes App Store Split
An insightful MacRumors reader about the 70/30 split on revenue Apple is offering for paid applications that will apear on the iTunes Applications Store in June 2008: