Developers To Boycott Handango
If you were a Windows Mobile developer and distributed your applications through Handango, what would you have done when Handango recently raised their profit cut? I for one would have boycotted them and look for other avenues. And I was hoping that other companies would do just the same.
These developers deserve better. A whole lot better. It’s bad enough already that they have to put up with illegal pirates. Now they have to deal with corporate sharks like Handango eating a huge chunk out of their profits? And what does Handano do? They just provide an avenue for these developers to sell their applications. They do not provide support for the application. That’s covered by the software developers and we all know how much work support can be. Definitely a whole lot more than processing sales I would say.
So when an article like this on Pocket PC Thoughts appeared, I was rather happy because it shows that the developers were not going to take this lying down. Basically the article states that developers are considering leaving Handango. Here’s a quote from the letter:
From: Bruce Wayne
Sent: March 27, 2008 11:00 AM
To: ‘Lucius Fox’
Subject: Handango Direction
Importance: HighHi Lucius,
I am writing to let you know that I and many other developers are not very happy with the direction Handango is taking these days in terms of the increased revenue share (now at 50%). As a result of these changes SOTI is now at a crossroad and seriously considering switching off HCE and moving to another company to process sales. Developers are talking to each other, and there is now a growing consortium of developers looking to dump HCE, I do not think this is the direction that Handango wants to go in. I hope you guys see the light before it is too late.
Regards,
Bruce Wayne | SOTI Inc. | Office +1 905 624 5555 x 228626 | bruce@soti.net | www.soti.net
Will it really happen? I sure hope so. That or for Handango to severely cut back on their commissions. What do you think?
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I’d definitely start to get scared if Bruce Wayne himself was boycotting my site…I wouldn’t want to tick Batman off.
I was there when Handango had a crappy looking site but gave good service and efficient downloads. I was there when they asked for input on changing the look of their site by participating in their surveys and questionairres. I was there when other people asked where the best site was to shop and I gave Handango the word-of-mouth-boost. But I was also there when they decided to start charging fees for re-downloading purchases I had already made from them. They didn’t send me a questionairre for that, but I gave them my opinion anyhow; I told them that I had always appreciated them keeping track of my purchases, dates and reg keys, but I would NEVER pay them extra for that. I now contact developers first, if I see a purchase is going to go thru Handango and I ask the developer or company if there is another way to buy that might net them more percentage. I hope, too, that they start standing up for themselves and boycott Handango. There are now way too many other choices for anyone to have to be dictated to. Any retailer can have whatever policies they want, but I have policies as well and they won’t be trumped by anyone in a free marketplace.
When companies get big and successful, they tend to go in one of 2 ways, continue doing what made them great or turn around and start becoming a bully and in this case, we can guess which route Handango is taking. I do agree that paying a fee for such an instance is bizarre and just downright wrong. You already own the license key, why should you pay more it?
Basically, my opinion of the situation is:
The below clause in the handango-developer agreement prevents a developer from offering their product at a lower price in another software shop:
“At no time shall the Software’s SRP provided to Publisher be higher than the Software’s SRP provided to other distributors.”
Thus, even if another software store charged developers only a 20% commission (as oppose to Handango’s 50%), the developer can’t pass that 30% savings onto consumers because this clause forbids that!
For example, if another software shop only charged a 20% fee, you would think it could work like this:
XYZ app sells for $19.95 on Handango, Handango gets 50% = $9.95 profit to developer
XYZ app sells for $12.50 on ABCshop, ABCShop gets 20% = $9.95 profit to developer
In the above example, the developer would still make the same $9.95 profit, but the consumer would save $7.50 by buying it though ABCShop!
The only way a developer could sell a product for less would be to NOT sell it through Handango (thus, they are not bound by the clause). But this would be like shooting yourself in the foot because Handango is the biggest shop and provides the highest sales count to developers. So, the developer has to bite the bullet and charge the same price in all software shops
How can another software shop ever be competitive to Handango when the best way to do so (by offering lower prices) is specifically prohibited in Handango’s agreement?
Handango has the right to charge a premium commission if their market position offers developers higher number of sales. But, I feel that this clause is anti-competitive and Handango is using their market dominance to force developers into agreeing to it.
I feel Handango is in effect dictating the prices that consumers pay for mobile software – thats probably why every shop sells the same app for the same price that Handango sells it for.
I feel the FTC and other applicable government agencies should investigate this clause to see if it is violating any anti-trust/anti-competitive laws designed specifically to prohibit monopolies from preventing competition.
Also, because Handango has so many partnerships with cellphone carriers, when a newbie buys a smartphone and selects “purchase software” link, the chances are they are directed to Handango – thus handango gets first sales opportunity for all newbies. Then, after a newbie gets confortable, they will probably try to find a software store that sells apps at a discount, but because of the above clause, there isn’t any. And because all shops charge the same price for the same app, there really isn’t any significant incentive for a user to switch from handango.
However, if someone opened up a new software shop that offered 20% off ALL software, EVERYDAY, then the discounted price offered to consumers for an app would NOT be the developers fault, so Handango couldn’t scold them under this clause.
Such a shop would have a significant chance to compete against Handango because there would finally be a real reason for users to NOT buy from Handango!
I did not know about this clause but I am glad you brought it up. Yes I do agree that it is anti-competitive and your suggestion of an all year round discounted software store seems like a good solution.
I think that the developers should be the one’s dictating how much to sell their software for, not Handango. But due to Handango’s size, yes, they can charge a premium commission for their service because it’s way up there in terms of market presence but it is a premium commission. 70% is not what I would call premium but cut-throat. Even 50% is a number I am rather skeptical about because of the fact that the developers are the ones who handle the most part of the business (developing the software and administering support).
I think if the developers do start to boycott Handango, we can finally start to see some real change. And Handango would be at the losing end because what good is a huge market presence if you have nothing to market?
What are Pocketgear’s terms and conditions? They (from a consumer) appear to be more reasonable (eg. free redownloads).
I am not too sure about PocketGear but last I heard, they were closing down after their parent company had a merger.
Great to see a lot of discussion about this on lots of places. I’ve never been able to purchase from Handango because I don’t have a credit card of verified PayPal account, but even if I had, I would much rather contact the developer and ask if it would benefit them more if I purchased through PayPal, ClickGamer, or Mobihand.
If Handango keeps acting like this, there will be a time when “the people” will no longer accept their behaviour. Free App Friday was cool, but I wonder what went on behind the scenes – did developers get hurt because of this, or did they benefit because the generated more users who’d possibly upgrade when a new version comes out?
ditto, to most of what has been said so far. Having been a developer and retailer i cant see any way of supporting handangos position, it stinks. i dont tell them what i will pay for there services, they wouldn’t do business with me if i did. their ’smallprint’ cannot excuse double standards. i will be doing my buying elsewhere.
so how about a sales and service review ( like a restaurant review ) we could all contribute our vote to your ’star’ ratiings.
What if we left Hitler alone and did not help England?