This is true but airpods is a bad example. They are a runaway success. Estimates are they did around $25bn of revenue in the last year. For context the highest annual revenue Bose ever did was $4bn (since declined). Sonos does something like $1.5bn. If Airpods was a standalone company it would be one of the biggest consumer hardware companies in the world.
Good investment decision and obviously the street was very wrong, but the reason the multiple was low was because of concerns earnings were at risk from a) their issues in China (which they solved, at least for now, but was a very valid concern at the time) and b) android eating them (there was a narrative they were about to be blackberried, or that android was doing what windows did to mac). There are good reasons why that didn't happen.
I'm not here to debate whether free markets are good or bad, but governments have a privileged position versus private companies, and effectively operate above the law (again at least compared to private companies). Any government intervention takes us away from a free market, either a little bit or a lot, depending on the action. Apple is a private company. Anything it does is really part of the free market, at least in the original meaning of that as described by Adam Smith and co.
We’re talking about China subsidizing goods that it sells in another country. This is bread and butter “free market” behavior. Literally every company in the world does this one way or another.
My friend, what is so special about the government? If a company uses its massive profits in one area to crus competition by selling at a loss in another area, this is the free market, and when a government does it it is something else? I think you have not thought this through
Private companies do things to maximize profits. They might lose money on some stuff to make more on other things, and there might be some gunk in the system but they are almost all laser focused on making bigger profits.
Governments have lots of other incentives (like job creation, elections, income distribution)
Why don't we abolish any business altogether and just have government run everything? There are countries where this is normal, perhaps not "free market" countries like maybe us? :)
I'm not really disagreeing with you as it's not like there is a 100% true definition of a free market, different people can have different conceptions, but the original Adam Smith / classical view is that a free market should essentially be 100% driven by the private market on supply and demand - with as little government intervention as possible on either side of the ledger (subsidy or blocking)
Except it isn't at all. The properties to buy all have a fixed price, costs of houses/hotels are fixed, rents are fixed and can't be adjusted, and most importantly, a) you can only buy a property if you randomly happen to land on it and b) people have no choice of what property to stay at (again, chosen by random dice)
You are really trying to say that for a startup trying to build software, say a productivity app or whatever, they should consider launching their own hardware device? They are very different things and would basically make indie development impossible (or really any software company that can't raise hundreds of millions to billions)
There is a limit to this sort of logic though. Don't get me wrong, I'm generally pro free markets. But:
A) Apple's policies make some products completely unviable (anything with a gross margin less than 30%). Even for products at say 40% gross margin, Apple as a storefront is taking 75% of the gross margin pool (ie 30% to Apple, 10% to developer). This in my view is direct consumer harm.
B) Apple acts egregiously and restricts what should be basic free speech. For instance, app developers not being able to even mention they have to pay Apple (let alone being able to direct customers to their own website etc). To me this is the biggest one - I could probably live with everything else more if developers at least could show customers where their fees were going etc.
C) Apple has changed the rules over time, or at least how they enforce the rules (by trying to force more and more apps to pay the 30% - eg what they did to Patreon)
This hasn’t been true in months in the US because of the courts ruling. Right now, just looking at two apps, you can click on “Buy book” from the Kindle app and be redirected to Amazon’s website and download the Netflix app, click on “Get Started” and create an account.
Just because people will go along with something because they have no other choice, it doesn't mean it's a fair business practice that we should allow.
Apple's deal is still an acceptable business proposition because there aren't any alternatives. Android users don't spend much on apps compared to iPhone users. It's an ok market, but not a great one, and in the US, if you aren't on the iPhone, then you aren't relevant, period.
Maybe if there was an actual competitive market on iOS for app stores, we'd see what app developers actually thought was a good business proposition, not the only take-it-or-leave-it (but if you leave it there's no way to be successful) proposition they have now.
People clearly have other choices here: develop for Android, develop for the web, create a telephony-based or text-response system, operate in bricks-n-mortar format, etc.
Apple with a 90% commission would still be a better business proposition.Did they earn that or are they at that point a monopoly on half a domain of tech?
Is that a better business proposition for a prospective app developer? GP was arguing that the alternatives to the App Store commission were far worse. Under a 90% commission scheme, they're probably both unviable.
> would basically make indie development impossible
We aren’t talking about indie development though. People like to paint a picture of a small, scrappy startup or beleaguered solo dev being held back by Apple’s crushing 30%, but that isn’t the case.
Unless you are earning more than a million dollars a year through the App Store alone, you don’t pay 30%, you pay 15%. And if you earn more than that, you still only pay 15% for long-term subscribers. And of course, all those SaaS companies where the app is just an interface for the larger service pay 0%.
As soon as you start talking about “Apple’s 30%”, you reduce the scope of the argument to the tiny fraction of developers with millions in revenue.
If you do actually want to talk about indie development, you should be talking about “Apple’s 15%”.
Say you're a team of 3. Your game takes 2 years to develop. You spend on salary for 3x2 years. You've spent ~$600,000 so far. Let's assume you haven't had any other sources of operational costs like software licenses for your art tools (3D modelling, 2D drawing, music production, sound production, game engine), marketing expenditure, development hardware, outside contracting, and a number of other things.
If you pull $800,000 in the first year Apple will take $120,000. Your net profit is $80,000. Apple has taken over half your profit.
If you pull $1,200,000 in the first year Apple will take $210,000. I'm going to assume that Apple still only takes 15% on the first $1million. Your net profit is $390,000. About a third of your profit has gone to Apple now.
The carve-out for small revenues is not some panacea. Fixed cost overheads for small teams will swallow the platitude very fast. Video games is a high risk, hits based industry. Apple's tax adds the most risk to small ventures, the kind of ventures that are going to produce innovative high risk content, making them even more risky adding more difficulty to acquiring finance.
So if we want to talk about Apple's 15% it's actually worse.
This is not what people have in mind when you talk about poor little indie devs being unable to cope with 30%. We’re talking about a well-funded operation that can run for years without revenue.
> So if we want to talk about Apple's 15% it's actually worse.
Power to you, but you probably miss out on masterpieces in the other direction though. The ones you would be more likely to watch if you spent more time watching those 'conventionally' liked movies, given the limit of time.
I think that example wasn't the best as it's probably so obvious it isn't salmon it wouldn't fool anyone. But would you be comfortable if someone sold Hoki or Puffer Fish as Salmon? And then only in the fine print said it was actually Hoki that tasted like salmon or whatever. What if someone sold actual fish but called it Tofu, and only disclosed in the description that it was fish that tasted like Tofu?
How much do you value your time? A lot of people think like this and I'm not judging you or saying this applies to you. But I find it kind of odd when people I know who earn hundreds to thousands of dollars an hour won't pay even $0.10 for something that took them say 15 minutes to read. If their own time is worth $200 / hr, they thought it was valuable enough to use up $50 of their time. If they refuse to pay anything for the content, then in their mind the content was worth exactly $50, not a cent more to spare to the author of said content (eg $50.10, if you paid the author $0.10 and paid $50 of your time).
Back in the old days, people would share useful information in the internet of their own accord. That still happens a lot today, too! In my opinion, most of the stuff that's ad-supported is not worth my time, as the "content creator" is trying to sell something or otherwise has an angle they're pushing. How can I trust what they have to say when I know they're only doing it to make some money? They will be less interested in helping me than helping themselves!
I think if you take ads away from the internet, you'll also take away a lot of the bullshit and inaccurate or misleading information. If no-one is making any money off of it, you'll be left with largely relevant information.
The internet today is like a free to air television network, but I remember a time when it was nothing like that.
> I think if you take ads away from the internet, you'll also take away a lot of the bullshit and inaccurate or misleading information
Just a gut feeling, but I doubt it. You'll still get a lot of bullshit inaccurate/misleading information, just only pushed by those with the budgets to keep pushing it.
Right-wing podcasters that take money from the Russian government to spread disinformation[0] will still get their checks even if their supplement sponsorships get outlawed.
You can take away all of Alex Jones' money and he'll still find some way to put his nonsense out there.
Sure, you'll never get rid of all misleading information; however, without advertising the volume of shit will reduce radically, as much of the modern internet is built around profiteering and get rich quick schemes (influencers), which breed swathes of hopeful emulators.
I think most sensible people are quite competent at ignoring the bullshit, so I would love it if there was less bullshit to wade through to get to the nuggets of useful information which are out there. For those too stupid to look past misleading information, there's no helping them anyway.
Not quite. Generally "content" from people trying to monetize their writing online (or who describe it as such) is not worth the time spent reading it, so in fact you're already in the hole before being asked to compensate them somehow. That I read/watched the stuff at all is often more a reflection of poor time management on my part than some high value of theirs (the OP essay mentions a similar point, and it's captured by the modern idea of "doomscrolling" recognizing "content consumption" as a potential behavioral addiction). So it's more that I think it takes a fairly high level of audacity for some rando to think people would not just be interested to hear what they have to say, but actually pay to hear their thoughts.
Generally the most useful information on the web is freely given. Turns out actual experts frequently like nerding out about their thing and trying to get other people interested in it/to understand some facet of it.
Sure but that's what happens when you cut distribution costs to zero (i.e. the internet). It's pretty indisputable that most content online is garbage. But there is also a lot of super high quality information out there in all sorts of fields, more than there was when distribution costs were high.
There is a prevailing attitude amongst some that they aren't willing to pay for any info - and they hold that as basically some sort of weird sacred belief. I think those people, even if they came across the best piece of content ever written, would be unwilling to pay 10c for it (pre or post). I'm just saying I find that odd.
It's that distribution costs are zero, and there's more extremely high quality "content" out there offered entirely for free than anyone has time to digest. Interested in physics? You can read Feynman for free. Interested in chemistry? MIT OCW has you covered with a dozen courses, probably 450 hours of lectures. Or if you want computer science, you can watch lectures from people like Sipser! Want to really get serious about a science? There's the arXiv.
I've also already got dozens of hardcover books that I'll probably never even get through as it is. Mostly acquired from thrift stores while I was in university.
Then there's the classics. It'd take years to get through just the very best highlights of the public domain literature, religious texts, and philosophy. Project Gutenberg has 75,000 books. My wife spent at least months (maybe years? I don't remember) just reading Proust (at the end she said it wasn't worth it).
This is without even needing to get into the fact that frankly I don't see copyright on things older than me or especially older than my parents as valid at this point. Most modern works I'd be interested in qualifies for that treatment. The authors are retired or dead.
This is all also speaking to pure consumerism as ways to pass idle time. I've got instruments to play, a computer to program/tinker with, an endless list of possible home improvements, and a family to spend time with.
I don't think I'm the only one who ends up in this state. There's a whole meme about people having hundreds of games in their steam backlog.
The best piece of content ever written is just not a compelling hook. Nothing in the content industry is. First of all it's an entirely generic description: the best X ever written is not going to be described as "content". That's like calling it "copy", and immediately betrays its low value/the way the author thinks of it.
So yeah generic "content" is going to be a very hard if not impossible sell.
I get all that. Still doesn't mean there isn't some things worth paying for that are created in real time and aren't out of copyright. Something like Stratechery, as an example most people would be familiar with.
Picking on my use of the word content is a bit silly. I think you know what I meant. Use whatever word you want there - best book, best textbook, whatever.
I'm not really sure what to think of Stratechery. It's got lots of words that are difficult for me to quickly skim the overall gist of to gauge whether they might be interesting, including paradigm 33 times, disrupt 58 times, and of course AI 247 times on the front page. From my angle it reads like a Dilbert comic so I guess I can't answer why the intended audience would or wouldn't pay $0.10.
Another observation though is that he literally describes his own site as having a "content business model" and his own posts as "content", so I think the word choice is more telling than you realize. I see it and just think "ok..." and hit back. I guess it pays his bills though so it seems to work. Apparently someone's giving him the $0.10. Other people in the content industry looking for tips like some giant ouroboros?
I don't know how I can be more clear about this. It was a thought experiment. Take the very best piece of writing from [BOOK/ARTICLE/TEXTBOOK/JOURNAL] you could ever imagine. Would you or should you be willing to pay 10c for it? I'm not asking about Stratechery in particular (although there are many, many people that happily pay Ben Thompson $15/month that I'm sure most people would describe as intelligent).
You might quibble that you would only pay for a physical book or whatever. I say why? Are you paying for the content (that word again) of that book or the paper? I'd argue the former. So why does it really matter if it was online or not? In the future it seems reasonably likely that there will be a higher proportion of the best writing online vs in books. Sure, a lot may be willing to write for free, but do you think it absolutely impossible that some percentage of them charge?
Realistically, like I said, I already doubt I will get through all of the physical books I have, so apparently I bought them as decor. I suppose deep down I knew that at the time which is why I got them for $0.50/ea at a thrift store.
So I suppose no, I can't think of any content I've thought to pay for recently, and have trouble picturing what I would pay for going forward. I already don't even take the time to read all of the writings of nobel laureates, fields medalists, etc. when they're already giving it to me for free. Not just old works but current blogs. There's more than a lifetime of the best works out there from world renowned experts. Thousands of years of the very best writing and I can't be bothered. And that's just writing. The list of things to occupy my time is endless. Acquiring something to read/watch is just not a problem I have. It doesn't make sense to pay for more. I have too much of it.
The content industry is competing with the entirety of recorded human history even before gen ai. A nearly impossible task unless someone destroys it all out of spite.
There is no universal, easy and feeless option to send money to people though.
Sure, I could pay for Hackernews or Github or whatever else (these may be bad examples due to the lack of ads) but lets even say the blogpost linked above.
If I could easily send 0.20$ to someone instantly, without much thought, I would.
I was hoping cryptocurrency would solve this, although the complexity and immense fees with most networks really rule that out.
I used to subscribe to the washington post before the most recent election. Im willing to pay for the content I see or read, but I can't possibly pay for ALL the content that crosses my vision. Like streaming services, I used to have just one, and now there are like 100. If I paid for every show I watched I'd be paying over $100/mo in streaming services. Now I pay for NPR'S premium subscription. If every writer on the internet paywalled their content behind some content network's subscription model, I would happily just not read it
Get a library card! My local library card includes free digital access to newspapers " from 100 countries in 60 languages" as well as streaming video, audiobooks etc. They also have a makerspace with 3d printing, green screen, recording studios, video games, tool rental etc. all at low or no cost. I let my card expire but I see it's still free in my city.
Also, when I'm.. ehm.. accidentally reading blogspam in my spare time, who's reimbursing me?
And if I'm actually reading instead of working, isn't the time I spend more of a debt than a declaration that I want to donate as much money as I wasted by not working for X minutes?
Employers haven't paid me for spending a lot of time with them so far.
But let's stick with the argument and claim that our time is worth the hourly rate of whoever creates what we consume. That also doesn't make sense, no matter how charitably I view it, for media.
Even if I want to live in a radically equal society where everyone's time is worth the same amount of money, it would only make sense when trading 1:1 - for example, I can compare my hourly rate to that of my barber, if I pretend there are no corporations, no taxes etc.
But yeah, to be brief, no, it doesn't make sense to give all of your time a monterary value. And when it comes to non-working time, I even find it to be a deeply gross way of thinking. Not regarding the willingness to pay, it's fair to think about your own income and how other workers have to make ends meet and to put it into perspective.
If you invert it, though, money is really compensation for time (directly or indirectly). Most of the things you pay money for are compensating someone for time spent (whether that time was spent in the past, present or future). Why is it so hard to go in the other direction? It doesn't mean that you think money is more important than time or anything. It's just that people trade one for the other. Even if you remove the money element altogether, you have a finite amount of time and should value it as such.
I also never said anything about equality or that an engineer or a scientists time is necessarily worth the same as other occupations. I was pointing to a very large disparity (paying a very small amount for content that one clearly values, if they value their time). You can put whatever numbers you want in my original comment and my point would stand.
I agree with this. I think potentially someone may have suggested the federal court sit on the decision until the 10% tariff was confirmed a couple of weeks ago. Mostly because the announcement pre Tariff might have resulted in a long Truth Social post from DT followed by a knee jerk reaction. But I highly doubt it would factor into the decision.
Australia is also in the process of regulating platforms and I'd expect it to end up a little closer to Europe/Japan in the next couple of years anyway. They will watch to see what loopholes Apple/Google exploit and try to deal with that in the regulations upfront.
Important context for anyone not aware is that Australia is one of the few countries that US runs a large trade surplus with.
