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Programming The Almighty Buck Entertainment

The American App Economy Is Now "Bigger Than Hollywood" 135

Posted by samzenpus from the there's-an-app-for-that dept.
Lemeowski writes Technology business analyst Horace Deidu found an interesting nugget while closely examining an Apple press release from earlier this year: "The iOS App Store distributed $10 billion to developers in 2014, which, Deidu points out, is just about as much as Hollywood earned off U.S. box office revenues the same year." That means the American app industry is poised to eclipse the American film industry. Additionally, Apple says its App Store has created 627,000 jobs, which Deidu contrasts with the 374,000 jobs Hollywood creates
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The American App Economy Is Now "Bigger Than Hollywood" More

The American App Economy Is Now "Bigger Than Hollywood"

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  • Bad comparaison (Score:5, Interesting)

    by MouseR ( 3264 ) on Wednesday January 28, 2015 @03:30PM (#48926433) Homepage

    They are comparing a global economy (Apps) to a local US market.

    What's the profit of global Hollywood sales?

    • They are comparing a global economy (Apps) to a local US market.

      If you want to make an Apples to apples comparison (pun intended) when talking about jobs, you'd have to take into account all of the jobs created by European, Bollywood, etc. film industry.

      • If you want to make an Apples to apples comparison (pun intended) when talking about jobs

        Was the "jobs" pun intended as well?

        • If you want to make an Apples to apples comparison (pun intended) when talking about jobs

          Was the "jobs" pun intended as well?

          Double pun, if we add in the pornography industry.

      • Re: (Score:1)

        by sh00z ( 206503 )

        They are comparing a global economy (Apps) to a local US market.

        If you want to make an Apples to apples comparison (pun intended) when talking about jobs, you'd have to take into account all of the jobs created by European, Bollywood, etc. film industry.

        then, you also need to include the other app stores as well (Google Play, Amazon, Windows)

    • Re:Bad comparaison (Score:4, Insightful)

      by jofas ( 1081977 ) on Wednesday January 28, 2015 @03:39PM (#48926527)
      Also, it's a bit of a 90s way to measure Hollywood revenue to look at "box office" sales.

    • Re:Bad comparaison (Score:4, Interesting)

      by telchine ( 719345 ) on Wednesday January 28, 2015 @03:47PM (#48926621)

      Call me a sceptic if you like; but I read the summary like this...

      Apple says this in a press release. Hollywood can provably be seen to have done this but not as well.
      Apple says that in a press release, Hollywood can provably be seen to have done that but not as well.

      Since when did Slashdot become a place for Apple press releases to be hyped up more than they are already?

      This is a Slashvertisment... Someone needs to create an ad blocker for these kinds of things!

      • You are a sceptic.

      • Apple says this in a press release.

        Apple is a public company. There are significant penalties for misrepresenting their financial situation.

        • Re: (Score:2)

          by Rennt ( 582550 )
          Public filings are not the same as a press release. Companies are free to lie as much as they like as long as it's not to a regulator.

          • Companies are free to lie as much as they like as long as it's not to a regulator.

            Not true. Even a press release cannot contain materially false financial information. It can contain puffery, and hype, but it cannot contain outright false financial information about revenue or profits. Public companies are not allowed to lie to the public about their finances.

        • Re: (Score:2)

          by penix1 ( 722987 )

          Apple is a public company. There are significant penalties for misrepresenting their financial situation.

          Press release != financial statement. Many (read most) companies tend to overblow their own accomplishments in press releases while being more (not fully) conservative in their financial statements.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      And only U.S. box office, which does not take into account foreign distribution, as well as other forms of revenue such as DVD sales and licensing.

      Apple doesn't know how many jobs its App Store has created, it is using pure statistical formulas to get its numbers. The Hollywood numbers, which extends beyond the Los Angeles area since most productions happen throughout the country, are drawn from the reported jobs from the associated trade unions.

      • Apple knows how many developer accounts they have, I'm guessing they're going with that number.

        • And every registered developer is making a living from building apps? There's not a single developer who just does it as a hobby?

    • Re: (Score:2)

      by SeaFox ( 739806 )

      They are comparing a global economy (Apps) to a local US market.

      What's the profit of global Hollywood sales?

      You might also note this is going entirely off Apple's numbers. We haven't added the money from the markets of Android and other platforms.

    • Re: (Score:2)

      by AK Marc ( 707885 )
      Which way? The US app store (locked down to US residents) is global, and the hollywood global receipts are domestic?

      Part of the problem is comparing gross Hollywood with net Appstore. And just one appstore at that.

      I agree that the comparison is bad, but your implication that it's skewed to make apps look large is the opposite of the actual skew.

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        The US app store may be locked to US residents, but there is an Apple App Store for damn near every country, and both TFA and TFPR are clear that the $10 billion App Store figure is global, while the $10 billion box office domestic. Global box office revenue is in the $30 billion dollar range, and if you want to make the claim that something is "bigger than Hollywood" you need to account for box office+blu ray/DVD+streaming+TV licensing+merchandising, so you can probably double that again.

    • Re: (Score:1)

      by Anonymous Coward

      Hollywood has long trumpeted itself as one of the largest industries in the world, but as one of my lecturers pointed out, they're not larger than engineering, construction, insurance, and a whole raft of others.

      Hollywood really aren't that big, but they do wield social and political power far in excess of what they should.

    • Regardless of whether the "App-economy" alone is larger than the "Movie-economy", I think this is indicative of how strong and important the "software-economy" is in comparison to the MPAA-dominated industries. But it makes you wonder why - given the strength of the former - why are software publishers and hardware manufacturers still allowing the MPAA to dominate them with demands for ever-stronger DRM? My optical drive shouldn't have firmware made to obey the regional-restrictions of the movie industry, a

      • If you want their content you play by their rules for distribution.

        This isent a problem for the software industry to solve, it's a legal one over personal use of paid content. Collectively us consumers can potentially solve it via litigation, voting for increased personal rights for digital content or with our dollars; if you don't like it, don't buy it. The majority of consumers are lazy and / or don't care however, so it'll never change. Outside slashdot you don't actually hear most average joes complaini

    • What's the profit of global Hollywood sales?

      About minus $50 trillion... supposedly.

    • Re: (Score:2)

      by rtb61 ( 674572 )

      According to the Hollywood accountants somewhere in the negative range and yet for some inexplicable reason they still keep functioning. Something to do with tax havens, sexually compliant starlets and perverted politicians but as yet taxation agencies from around the globe have still not managed to figure it all out after decades of trying. Apparently it is easier to gouge the rest of us at the tax office to pay for their subsidies and the free ride they get on the infrastructure we pay for, whilst they c

    • Hollywood is (unfortunately) definitely global, so it's quite a valid comparison. Hollywood new releases surface in other countries the same time as in the US.

    • They are comparing a global economy (Apps) to a local US market.

      What's the profit of global Hollywood sales?

      not even that, they are comparing a global market to a subset of the Hollywood's US market (US boxoffice).

    • What's the profit of global Hollywood sales?

      Based on Hollywood accounting? Something in the vicinity of zero./sarcasm

  • Wasn't there a bunch of articles lately explaining how much of these app developers aren't making any return because of how difficult it is to be seen on the store or how most users don't really use much of these apps once the hype passes.

    • Re: (Score:1)

      by Anonymous Coward

      If you crunch the numbers, $10bln across 627,000 jobs is approximately $16,000 per job. Not exactly hot stuff unless you live in the developing world.

    • Yes, there was... The key talking points of said article was how the barrier for entry in creating a successful title was in the six figures, and months of effort. No longer is App Development on Mobile with simple titles produced by a single person can be an overnight ticket to millionaire status as was the case with the early days with Trism and it's comrades.

      However, the same can be said of the film industry, where successful releases requires teams of people and significant upfront investment, excep

  • Not even close (Score:3)

    by metrix007 ( 200091 ) on Wednesday January 28, 2015 @03:38PM (#48926511)

    Movies still far outpace TV sales, especially if you include TV.

    The reported incomes are lies, due to Hollywood accounting.

  • Uh oh, NOW you've done it... (Score:4, Insightful)

    by NotDrWho ( 3543773 ) on Wednesday January 28, 2015 @03:38PM (#48926519)

    Soon, James Cameron will rip his shirt off, scream "NOT FOR LONG, MOTHERFUCKERS!" and return from a week-long free-dive of the Titanic to direct a new blockbuster that will dominate the world in a way that YOUR LITTLE MIND CAN'T EVEN IMAGINE!

    • Re: (Score:1)

      by mwn3d ( 2750695 )
      James Cameron does not do what James Cameron does for money.... James Cameron does what James Cameron does because James Cameron is....James Cameron
  • ...Hollywood accounting practices? I doubt it.

  • Did they include all the aspiring actors/actresses working as waiters in that estimate?

    • Do I get counted as an astronaut as I'm waiting for NASA to call me up? Or as a porn star in case one of the starlets decides she wants a hunka hunka burning nerd for a quicky?

      Does wishing you had another job cause you to count towards the statistics of that job?

      I honestly don't think "wannabee" counts towards these things. :-P

      • I honestly don't think "wannabee" counts towards these things. :-P

        There are a lot of professional actors that still wait tables. You can be SAG, book semi-regular walk-ons on TV and the occasional film and still need a second gig-- people wait tables, but they also code, sell stuff on Etsy, write, work as realtors...

        Even really successful actors end up having a lot of free time, Josh Brolin is known for, apart from acting, being a really successful high-frequency trader in the mid-aughts.

  • 627,000 jobs, are they real? (Score:5, Interesting)

    by k6mfw ( 1182893 ) on Wednesday January 28, 2015 @03:51PM (#48926669)
    There are many that create apps and have them for sale at Apple, but do they make a living from these sales? There was an article saying App store is more like a casino. House always collects revenue, almost all participants lose money but a few make some money. Article went on about how everyone has to pay $100 to submit their app to Apple Store, and most apps have little sales. Occasionally some apps have huge sales (i.e. Angry Birds) and developers make lots of money. I wonder if same like Hollywood says it creates 374,000 jobs but does that include people working at theaters making marginal income, or starving actors who occasionally get a stand-in part for $50?
    • Comment removed based on user account deletion

      • Maybe Hollywood should be run that way too?

        Oh wait... it is :)

        I wonder if the Apple numbers factor in jobs for set designers, truck drivers, people who work the cell phone booths in the shopping malls, etc?

    • I don't except that Programming is "Bigger than Hollywood" until we have people saying they are programmers while the bulk of their income comes from waiting tables, and I have to sleep with my Employer to get a job interview.

      I WISH the process were that simple.

    • Comment removed based on user account deletion

    • Re: (Score:2)

      by AmiMoJo ( 196126 ) *

      I wonder how they came up with the 627,000 figure as well. Number of licences sold * average number of programmers per app maybe? Some people shit out apps all day long, ending up with hundreds or even thousands in the App Store in the hope that one makes it big. When are are 100,000 other flashlight/advertising apps the only way to have any hope of being picked is to create 1000 slightly different flashlight/advertising apps of your own.

  • 15K per job in App economy (Score:3)

    by 140Mandak262Jamuna ( 970587 ) on Wednesday January 28, 2015 @03:58PM (#48926741) Journal
    Hollywood job pays on average 27K. (Using the numbers in the summary). Hollywood pay distributed very unequally. A few mega stars and peanuts for the bit players. The App distribution is much more broad, compared to Hollywood anyway. Without these super mega paychecks and glamor it will not get much of media play.

    • Hollywood job pays on average 27K. (Using the numbers in the summary).

      I'm not sure about the methodology in the summary, but if you look at the scale rates for most Hollywood entertainment unions you'll see the weekly rates even for entry-level job classifications will be around $2000/week. Actors are only a small part of the puzzle and they aren't really representative of the entire employment picture of the film industry. For every professional actor in the film industry there's gotta be a dozen people

  • The real Justin B crashes cars, and the Justin B app crashes phones.

  • Liars figure and figures lie (Score:5, Interesting)

    by TrollstonButterbeans ( 2914995 ) on Wednesday January 28, 2015 @04:11PM (#48926849)
    Subtract out the top 1% of pay to play games and quite a different story will reveal itself.

    Case in point, Clash of Clans makes $500,000 per day and it is well known that Apple commands the overwhelming majority of mobile app $$$ volume. If you add in the revenue from the top 100 "freemium" pay-to-play games that $10 billion figure is going to shrink very, very quickly.

    A handful of Freemium games are the top payouts, with almost the 99.999% of the rest making near 0.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      Case in point, Clash of Clans makes $500,000 per day and it is well known that Apple commands the overwhelming majority of mobile app $$$ volume. If you add in the revenue from the top 100 "freemium" pay-to-play games that $10 billion figure is going to shrink very, very quickly.

      It depends, actually.

      On iOS, a developer is far better off making an ad-free app and selling it for money in the App Store.

      On Android, though, the situation is a developer will not make money this way - instead, the better way to ma

      • Re: (Score:1)

        by Anonymous Coward

        (something iOS asks permission for - an app can't access the contact list without the user knowing).

        I know this may come as a shock, but Android permissions are much the same, except the ask is before you even install the app. (If an application requires access to personal contacts, the Play Store installer tells me that and gives me the option to not install it.)

        Whether the permissions are granular enough is a separate question, but in this occasion the functionality of the devices is about the same.

        • Re: (Score:2)

          by Bogtha ( 906264 )

          the functionality of the devices is about the same

          It's very different. On Android, you have to decide whether to grant permission before you've ever run the application, and it's all or nothing. On iOS, you run the application before deciding whether or not to grant it permission. You have the ability to deny permission while still running the application. You can also allow permission for some things but not others.

          This functionality is partially available to Android users who root their phones

      • Re: (Score:2)

        by sribe ( 304414 )

        ...and assuming they're just as likely to pay up.

        Which is not even remotely true.

    • Re: (Score:3)

      by Bogtha ( 906264 )

      It's true that the majority of the profits in App Store sales is focused at the extreme top, but it's not true that 99.999% of the rest make "near 0". This analysis [metakite.com] estimates that the top 3,175 applications earn at least the average annual income for a US household per year, and applications that rank about number 6000 still earn $25K/yr.

      And that's only counting App Store revenue. I've earned a lot more than average since I started developing for iOS, and most of the applications I've worked on are fre

      • I was taking on that $10 billion number, which a hefty piece of it is gaming/casual gaming in-App purchases --- meaning that kids (Clash of Clans, Simpsons Tapped Out, etc.) are using iPhones/iPads instead of a Nintendo DS/Sony Playstation Portable -- which is a shift of leisure activity to Apple. With Candy Crush + company being targeted towards adult casual gaming.

        Sure, the mobile app ecosystem is a few times larger than Apple's AppStore revenue.

        I wanted to point out were that revenue is going.

        Your h

        • Re: (Score:2)

          by sribe ( 304414 )

          So "almost 99.999% making 'near zero'" vs. 99.9538% ---- I think I was pretty close!

          Well, if you consider being off by 47x pretty close and you consider $25,000/year to be zeroing out, then yeah you were right ;-)

    • Apple pays out 67%. That's on Gross.

      If they were to perhaps, talk about the expense of promotion, servers, and the fact that all the toys for Whack-A-Mole ended up in lawsuits, they could use Hollywood accounting. It would still be 67%, but of the net -- which means cab fair instead of money to buy the Limo.

    • Re: (Score:2)

      by sribe ( 304414 )

      A handful of Freemium games are the top payouts, with almost the 99.999% of the rest making near 0.

      Wrong. The curve is sharp, but it's not anywhere near that bad. See here [metakite.com],

  • Are they real jobs? (Score:3, Insightful)

    by sideslash ( 1865434 ) on Wednesday January 28, 2015 @04:12PM (#48926851)
    Keep in mind that many app developers put a huge amount of time and effort into developing their apps and publishing them, and then only see a small trickle of income. They just hover at the edges of the app economy desperately trying to catch their big break, while watching the big stars like Rovio rake in huge paychecks every day. Often they have to work side jobs like waiting tables to pay the bills while they dream of becoming stars in their own right. And sadly, the statistics suggest that most of them won't ever make it big.

    Contrast that to Hollywood, where... uhh, nevermind. Carry on.

    • Re: (Score:2)

      by Karlt1 ( 231423 )

      Keep in mind that many app developers put a huge amount of time and effort into developing their apps and publishing them, and then only see a small trickle of income.

      And many others have sense enough to go work for a company that has benefits and resources and make an easy $100K+ a year....

    • Re: (Score:2)

      by sribe ( 304414 )

      Often they have to work side jobs like waiting tables to pay the bills...

      Yeah, right, app developers waiting tables. What bullshit.

  • The App's market is way smaller then hollywood
    Just ask Congress!

    https://www.opensecrets.org/in... [opensecrets.org]

    • At least the screens are smaller.
      The problem with the article is in the assumption that the App Store of the Americal Apple company sells only software that was written in the U.S. of A.

  • Deidu points out, is just about as much as Hollywood earned off U.S. box office revenues the same year." That means the American app industry is poised to eclipse the American film industry.

    Um, except Hollywood doesn't earn as much from US box office as it does from these:

    * NON-US box office
    * Disc sales
    * Rental fees
    * Merchandising rights

    So how is this comparison (and the headline) valid?

    • How is the comparison valid? Well it's right in the sub: "The iOS App Store distributed $10 billion to developers in 2014, which, Deidu points out, is just about as much as Hollywood earned off U.S. box office revenues the same year." To make a comparison only one element has to be common to each element. In this case it's the amount of money that was earned. It's a perfectly valid comparison.

      • I suppose, but it is misleading- many people will read it as the "app" industry is more return or revenue than "[all of] Hollywood", not "one single aspect of Hollywood earnings among many." Of course, I expect such things from sensationalist reporting.

  • Meh. Everything is bigger than Hollywood.

    Okay, that's a little bit of an exaggeration, but honestly, on the scale of major first-world institutions that people know and recognize, Hollywood is pretty small potatoes. Apple alone rakes in more than double the entire worldwide film industry's take. 2013 worldwide film industry revenues: $88B, and Hollywood is only about 2/3 of that. 2014 Apple revenues: $183B. IBM also is also bigger than Hollywood. Google is about as big as Hollywood. Ford is bigger than H

  • And they use more burp and fart sound effects than all of Hollywood!

  • Hollywood isn't particularly big when it comes to industries. Hollywood is, when you look at it globally, not even the biggest player in the movie industry. It's largely insignificant to the economy.

  • but is it bigger than hip hop ?

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