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Poll: Is a 30%-70% App Store Revenue Split Fair?

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An interesting statistic from the Evans Data Spring North American Developer Study was revealed this week.  The survey, which was taken last month by over 400 developers, found that 80% think the revenue split for virtually every mobile app store (70% of the app's sale goes to the developer, 30% to the store) is unfair.  This is surprising, since the 30-70 split introduced by the iPhone App Store has basically set the standard for Android, BlackBerry, and the upcoming Windows Phone 7.  All of these handsets' corresponding app stores take a 30% cut from developers, but according to the Evans Data study, devs are not happy with the status quo.

The study also shows that only 15% of the respondents said app stores were the preferred model of distribution.  More than half preferred direct sales to companies and end-users.  70% thought that app stores shouldn't impose restrictions on price, and almost half said that there should be no content restrictions.  Janel Garvin, the CEO of Evans Data, says "there could be a big upside for any vendor bold enough to deviate [from the 30-70 revenue split].”  It's true, because some operators once took 40% of the cut, and now that has changed.  

Quickly, here were some other (random) highlights of the survey:

  • Ten percent currently use Objective C, but that is expected to grow to almost 12% next year.
  • Thirty-six percent of developers plan to include services that communicate with messages formally defined via XML Schema.
  • Almost two-thirds (64%) use agile development techniques at least some of the time.

So what do you think about 30-70 being the norm?  Is it fair? 
What revenue split would be fair?

               Do you think that a 30% - 70% Revenue Split is Fair?


Jay Huang replied on Tue, 2010/05/18 - 3:08pm

Speaking of App Store, what happens to Java App Store, is it still under development ?   What about Intel's App Store for Java ?

Mitch Pronschinske replied on Tue, 2010/05/18 - 4:40pm in response to: Jay Huang

I've emailed Oracle representatives several times about the status/roadmap for the Java Store.  In true Oracle fashion, they haven't emailed me back at all.  I'm guessing they're either still deciding or they haven't bothered to go through their bureaucratic process to give me an answer.

I don't know about the Intel App Store though.

Jim Bethancourt replied on Tue, 2010/05/18 - 4:57pm

I just finished "Hackers: Heroes of the Computer Revolution" by Steven Levy (as it turns out, the 25th anniversary edition is coming out next week), and he tells the story of how Sierra On-Line gave their developers a 30% royalty for quite a while. Granted, I think they were also drawing a steady paycheck, but that wasn't entirely clear.
Although I don't develop phone apps, I think it would help all parties involved if the books of the aforementioned companies were opened so that everyone involved would understand where the money is going. Certainly everyone is in the game to make some money, maybe some profit if they're lucky. Without any money going back to the appstore provider, there wouldn't be much incentive for them to provide the appstore and maintain public APIs in the first place. The market will decide.


Bryan Young replied on Tue, 2010/05/18 - 9:02pm

A poll like this is a little out of context without a similar poll from consumers. How many people who paid $1.99 for a "bricks" games on an app store would do the same if it involved typing their credit card number in to some website with a Russian domain?

I personally believe that the centralized app store is a large part of the success of mobile apps (although without studies like the one I describe, I'm just guessing).

Asking anyone if they would prefer more money for the same work, is a bit of a loaded question. First find out how a decentralized model would effect sales and then ask these same developers if they would prefer 100% of their profits if their sales were to decline by X%. I bet the numbers are different.

James Sugrue replied on Wed, 2010/05/19 - 3:09pm

Right now the votes are exactly 30% saying it's fair, and 70% saying it's not :)


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