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How Big tech eats little Releases is a blog that discusses how big tech companies are constantly releasing new products that make it difficult for small companies to keep up.
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The App Store
In the early days of the App Store, there were only a few hundred apps. Developers could easily get their apps in front of users and generate buzz. Today, there are over two million apps in the App Store. It’s become a crowded marketplace, and it’s become harder for new releases to get noticed. Here’s how big tech eats little releases.
Apple’s monopoly
In the app store, big tech companies like Apple monopolize the market, which gives them a lot of power over what apps are made available to users. This power can be used to protect their own interests, stifle competition, and advantage their own products and services.
For example, Apple has been known to delete apps that compete with their own products and services, like Google Maps and Waze. They have also been known to charge high fees for developers who want to sell their apps on the app store, while offering their own products and services for free.
This monopoly gives Apple a lot of control over what users can do with their phones, and it limits users’ choice in apps. It also makes it difficult for small developers to get their apps noticed and used by people.
The 30% cut
You’ve likely heard of the 30% cut that big tech companies like Apple and Google take from small developers. But how does this cut actually work, and what does it mean for small businesses?
The 30% cut is the percentage of revenue that goes to the big tech company, typically Apple or Google, whenever someone buys an app or makes an in-app purchase. For example, if someone buys an app for $1, the developer gets to keep $0.70, and the big tech company gets $0.30.
This might not sound like a lot, but it can quickly add up, especially for popular apps that are generating a lot of revenue. And, as you can imagine, it can be quite challenging for small businesses to make ends meet when they’re only keeping 70% of their revenue.
There are a few ways around the 30% cut, but they typically involve using one of the big tech companies’ platforms in a way that they don’t want you to use it. For example, you could create a web app instead of a native app, but then you would miss out on some of the features and benefits that come with having a native app.
Ultimately, the 30% cut is just one more way that big tech companies keep small businesses from being able to compete on a level playing field.
Google Play
After a number of successful app and game releases, it’s easy to feel like you’re on top of the world. Google Play is a great platform with a lot of visibility and potential for success. However, there is always someone bigger and better waiting to snatch up your success.
Google’s monopoly
Alphabet Inc.’s Google has a monopoly in online search and advertising, the U.S. Justice Department said on Tuesday, adding that the government was considering whether to take legal action against the company.
The statement could increase pressure on Google, which already faces two antitrust lawsuits filed by the department last month. One of those cases focuses on the company’s dominance in online search and advertising, and the other on its Android mobile operating system.
Google’s monopoly power is “deeply entrenched” and difficult to challenge, the Justice Department said. “To date, no one has been able to compete effectively with Google’s general search engine,” it added.
The statement came as part of a filing in support of one of the two antitrust lawsuits filed against Google last month. In that case, the department alleges that Google illegally used its market power to stifle competition in the online search market.
The 30% cut
In order to have your app distributed on the Google Play store, you have to give Google a 30% cut of all in-app purchases. This policy has been controversial, with many small developers feeling that they are being disproportionately harmed by it.
The 30% cut is also known as the “Google tax”, and it applies to all developers, regardless of size. This policy has been in place since the early days of the Android app store, and it doesn’t seem like it’s going to change any time soon.
Some developers have tried to work around this by using alternative payment methods, but Google has been cracking down on that as well. In January of 2018, they started requiring that all in-app purchases use Google Play’s built-in billing system.
This policy has caused many small developers to either go out of business or only release their apps on alternative app stores. It’s also made it difficult for new developers to enter the market, as they have to compete with established players who can afford to give Google a 30% cut.
The indie app store
There are many app stores out there, but the two most popular are Apple’s App Store and Google’s Play Store. With over two million apps between them, it can be hard for small, independent developers to get their apps noticed. That’s where the indie app store comes in.
No monopoly
The indie app store is a platform that allows independent developers to sell their apps directly to consumers. This is in contrast to the major app stores, such as the Apple App Store and the Google Play Store, which only sell apps from major developers.
The indie app store is a great way for independent developers to get their products in front of a large audience, and it provides consumers with an alternative to the major app stores. However, there are some downsides to using an indie app store.
The biggest downside is that there is no guarantee that an indie app store will be around for long. The platforms are run by big tech companies, and they can shut them down at any time. This means that if you buy an app from an indie app store, you could lose access to it if the store goes out of business.
Another downside is that indie app stores typically have a smaller selection of apps than the major app stores. This is because major developers are more likely to sell their apps through the major app stores, which gives them a larger audience and more exposure.
Finally, some people worry about the quality of apps in an indie app store. Because these platforms are less well known, it can be harder to find reviews or ratings for the apps in question. This means that you may not be sure if an indie app is good quality before you purchase it.
Overall, the Indie App Store is a great way for independent developers to get their products in front of a large audience. However, there are some downsides to using an Indie App Store, such as the lack of guarantee that the platform will be around for long, and the smaller selection of apps relative to the major app stores.
The 70% cut
This is how Big Tech eats little releases. App behavior has been well studied, and the data shows that most people who download an app use it once and then never again. The numbers vary by app category, but the average is less than 20% of downloaders become active users.
For a paid app, that means only about 1 in 5 people who parents buy the $2.99 kids app will use it more than once. For a free app with in-app purchases, such as many games, the number of payers is even lower—usually less than 10%.
So if you’re an indie developer relying on Apple or Google to get your app in front of potential customers, you’re competing for attention with millions of other apps—99% of which are free. And if you’re one of the few who do get downloaded, you’re up against billion-dollar marketing budgets trying to keep people using their apps day after day.
And then there’s the platform cut. Apple and Google take a 30% cut of all revenue generated through their respective app stores. That includes not just in-app purchases, but also subscription fees and even advertising revenue (if you use one of their ad networks). For indies trying to make a living from their craft, that 70% has to cover everything from servers to salaries—with very little left over for marketing or advertising.
Why big tech wins
The big tech companies have the money, the manpower, and the marketing to make sure that their products are the ones that people see and buy. They can afford to release a new product every few months, and they have the marketing budget to make sure that everyone knows about it. On the other hand, the little guys can’t keep up. They don’t have the money to release new products constantly, and they don’t have the marketing budget to get their products in front of people. As a result, the big tech companies are able to eat up the little releases, and they always come out on top.
More money
In the tech industry it’s often said that big companies win and small companies lose. That’s because big companies have more money to spend on research and development, marketing, and acquisitions. They can also afford to make mistakes and still stay afloat.
Small companies, on the other hand, don’t have the same luxury. They have to be more scrappy and innovative to compete against the giants of their industries. And even if they do manage to build a successful business, they’re often acquired by the very same big tech firms they were trying to compete against in the first place.
There are a few notable exceptions to this rule, of course. But in general, it holds true that big tech wins and small tech loses.
More control
More control means the big winners can shape the market to their advantage and keep competitors at bay. They can do this in a number of ways, from making it hard for consumers to switch to them (“lock-in”), to writing the rules that everyone has to play by (“standards”), to snapping up potential rivals before they become a threat (“acquisitions”).
The net effect is that the big winners become ever more entrenched and the chances of anyone new breaking into the market diminish. This was the finding of a recent paper by economists at Indiana University, which looked at a range of markets from social media to operating systems.
In each case, the study found, “the incumbents were more likely than not to win when competing against an upstart”.
