Rent-seeking in the 21st century: where eBay, free software, Foxconn and the MPAA come from


16 Responses to “Rent-seeking in the 21st century: where eBay, free software, Foxconn and the MPAA come from”

  1. Anonymous says:

    Jim doesn’t understand the iTunes App Store economics, but most non-developers don’t anyway.

    The App Store is not the ‘Karmic enforcer’ for software developers – quite the opposite – they created a brand-new, multi-billion-dollar software market that didn’t exist before – that’s why there are so many of us developing software for it.

    Its not like writing $.99 Objective-C apps is ‘just that much fun’ that 59k developers jumped on in 2 years.

    30% is Apple’s take, not the developer – the developer gets the other 70%, which is standard for software distribution.

    The $.99 is not a problem, as there is no commitment or overhead in App Store participation. Like any platform, you need to choose your products carefully (language-independant casual game like, oh, I dunno, Angry Birds?) in order to target the entire iOS market worldwide and make a bundle.

    • turn_self_off says:

      Oh, they create a market alright. But just like the record companies being the gatekeepers of the recorded music market, apple is the gatekeeper of the mac/ios software market.

  2. a random John says:

    That’s odd. I get 70% of $0.99 from Apple for my 3d asteroids/space combat game. Did other people not negotiate as well?

    • turn_self_off says:

      I think his comment is that while Apple have been able to shore up a control point (rent gate?), they have only managed to do so at the border of pointlessness (30% rent on .99).

  3. Anonymous says:

    30% is tiny compared to retail listing fees.

  4. Anonymous says:

    It makes more sense if “the software developers” talked about in that paragraph is Apple.

  5. hapa says:

    pssh he’s not an economist he’s a bizspeaker

  6. gwailo_joe says:

    May I be the first to say that, indeed, The Rent is Too Damn High!

    (also Ultra Kaiju are cool. . .)

  7. turn_self_off says:

    Ah, rent-seeking. The bane of all that is good in this world.

    • Anonymous says:

      Really? Here the author says “rent” is “the amount you pay people in excess of what you really have to to get them to do something.” So anybody who loves their job is a rent seeker. In fact, anybody who tolerates their job more than just barely is a rent seeker to a small degree. If you do anything for money, and you wouldn’t quit immediately if you were paid a dollar less a week, then you’re getting at least a dollar a week in economic rent.

      • turn_self_off says:

        As usual, economists have their own definition on a common word (tho to be honest, they are not alone. Scientists have their own definition of theory for instance). This makes reading various economic texts a bit like walking in a verbal minefield. When you think you got the right understanding, boom goes a redefined word.

  8. surrealestate says:

    Apple’s market is nothing like the record companies’ market. Apple doesn’t pay advances and require you to recoup their promotional expenses against your royalties, they just charge you 30% of your retail cost.

    Let’s compare apples to apples, as it were. If you are an independent musician, you need only register with iTunes as a record label, and Apple just takes 30% of the track cost. You need to have a business bank account to collect the money, but Apple doesn’t really do any gatekeeping, other than to flag explicit content. Artists like Pomplamoose are using this model and doing much better than they would under a record company. A record label will concentrate its resources on a few tentpole releases and pretty much let the new artists fend for themselves, charging them money they haven’t yet made to promote them. Apple also takes no rights to your likeness, bandname, recordings, etc. The deal is not exclusive, you can put your music on other stores at the same time, tour, do whatever you want, and you can end it whenever you want, as opposed to the 7 year contracts in the music industry.

    The software market for iTunes is different in that you can even release free content at no cost to yourself. If you do charge money, Apple takes 30%, but they also provide a selling infrastructure you could not easily duplicate on your own, with worldwide currency conversion, etc.

    • turn_self_off says:

      Its still early days. Lets see how apple behaves once they have been running their app store as long as the record companies have been in the business.

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