Are Independent Mac Software Developers getting the shaft?

I enjoyed MacHeist.  I thought it was a fun “game”, and enjoyed trying (usually in vain) to figure the Heists out on my own.  One of the things that I enjoyed the most about it was how supportive of the independent Mac development community it was.  If it’s one thing we like here at Apple Gazette, it’s indy developers (just look at how many Software Spotlights we run).
However, after reading this post on Daring Fireball this morning, I can’t help but question if MacHeist is really helping the indy dev community, or hurting it.  First, let me be clear, that John Gruber’s post does assume a few things (for example the cut that some of the top tier developers are getting)…but those things would be in FAVOR of the developers not against them.  If the information in his post IS true…then MacHeist may not be the champion of indy developers they claim to be…if these numbers are true, it seems to be more like exploitation.

From the article:

Respectable agents or managers take no more than a 15 percent cut of their clients’ revenue, and usually not more than 10 percent. That’s true in sports, it’s true for authors, and it’s true for entertainers. MacHeist’s role isn’t that of an agent or manager; the closest traditional description I can think of is that of a promoter. But the basic analogy holds, in that they’re ostensibly looking after the interests of “the talent”; a 10-15 percent cut of the profits sounds about right to me — which in the case of MacHeist’s 8-10 member ensemble of developers would make MacHeist’s fair share roughly equivalent to that of one of the developers.

But those numbers are based on the sales numbers at this writing, two days into a weeklong promotion. MacHeist is on pace to take a far larger share of the actual profits than the average developer in their bundle. Consider the distribution of profits when and if sales meet the levels for unlocking NewsFire and TextMate:

                                Current    Newsfire    TextMate
-------    --------    --------
Total Raised for Charity:       $33,000     $50,000    $100,000
Post-Charity Revenue:            99,000     150,000     300,000
Est. Other Expenses:             30,000      30,000      30,000
Total Profit:                    69,000     120,000     270,000

Est. Total Payments to Dev's:   $54,500     $67,000     $79,500
Est. MacHeist Profit:            14,500      53,000     190,500

MacHeist Profit Share (%):           21          44          71
Developers' Combined Profit Share:   79          56          29
Developers' Ind. Average Share:      10           6           3

(To compute this table, I estimated that David Watanabe (NewsFire) and Allan Odgaard would be getting the same “more equal” $12,500 payment that I believe Delicious Monster is getting. I have no information to back this guess up; if I had to wager I’d bet they’re making less, but it seems more fair to guess high than low. I also treated John Casasanta as a regular developer.)

What this table makes clear is that because these payments are for a flat fee, as sales goes up, additional profits all go to the MacHeist organizers. If sales reach the level to unlock TextMate, MacHeist will keep more than 70 percent of the total profit, and the average individual developer will get less than 3 percent. I repeat: 70 percent of the profit would go to the MacHeist team — almost 25 times more money than the average profit of a developer in the bundle, and more than double the profit of all 10 developers combined.

Consider this: How much worse for one of these developers would it be for you to pirate a copy of their app than to obtain a legitimate license through this bundle? They don’t get any extra money either way, because they’re getting the same flat payment from MacHeist whether you buy the bundle or not. And if you do buy the bundle, they’re on the hook for providing you with technical support.

I hope that we hear from the MacHeist team about this in the near future.

Click Here to read the full Daring Fireball post.

Comments

  1. MacHeist is appropriately named… It’s a heist alright. It screws everyone but macheist.

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