How much longer can the industry maintain 70/30 revenue share?
What is a fair revenue split for app stores? Click for full-size PDF version…
A survey of 100 industry executives attending the 2009 MEX Mobile User Experience Conference found 38% favouring an 80/20 revenue split (80% of revenue for developers and 20% for store owners) as the fairest distribution for application stores.
In contrast, 24% thought the current de-facto standard of a 70/30 split should remain, while 13% voted for 90/10.
Survey participants were drawn from a diverse base of industry sectors, including representatives from handset manufacturers, network operators, third party software developers, user experience consultants and hardware and software platform providers.
The results of the survey are published on the day Nokia officially launches its Ovi Store, operating on 70/30 split. Apple, which runs the largest and most popular mobile software store, also provides a 70/30 share.
However, the results of the MEX survey – representing a broad spread of industry viewpoints – suggest significant competitive advantage could be gained by a store willing to provide developers with a larger share of revenues.
The same survey also found direct to operator billing provides by far the best user experience for mobile customers when purchasing from application stores.
60% believe the direct billing method provides the best user experience, while 25% chose pre-registered credit card. 8% voted for third party payment providers such as Paypal or Google Checkout and another 8% favoured pre-paid vouchers.
Nokia’s Ovi Store is notable for providing direct operator billing links in a number of countries, whereas the iPhone App Store relies on users pre-registering their credit card.
The results suggest network operators, which have been sidelined in the first generation of application store launches, may be able to wield significant influence through their billing platforms as the business matures. Vodafone recently announced plans to build its own application store.
Further results from the MEX survey will be published in subsequent newsletters, including the industry’s thoughts on the best way to improve mobile user experience over the next 12 months and the proportion of handsets which will feature touchscreens by 2011.
Interested in more findings from MEX? Pre-register to purchase the 2009 MEX Report…
We’ll soon be publishing the official 2009 MEX Report, capturing the industry’s collaborative response to the MEX Manifesto through a combination of videos, presentations, sketches and written summaries. It is a great way to catch-up on the cutting edge of mobile user experience if you weren’t able to make it to the MEX Conference.
Send an email to Marek Pawlowski (mp@pmn.co.uk) if you’d like to register your interest and we’ll contact as soon as the report is available to buy. (Please note, all MEX conference attendees will receive a copy as part of their attendance fee).
In Ovi, for payment via operator billing, the developer will get less than 70% of end user paying price, because it is from net of operator charges (Nokia calls it fixed aggregator billing)which could be up to 50% (for app less than 2 Euro). If the app costs Euro 1.99 the developer would only get 0.6965 Euro which is 35%.
See the Ovi Store publishing terms.
Yes, operator billig gives the user the best experience, BUT it gives not enough money for the developer to survive. The percentage which the operator takes is by far too much!
I agree with Hisyam Halim – the remaining money of the developer is no motivation to put content into OVI!
Apples does a much better job – 100 points – Zero points for Nokia at this moment.