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  1. #16
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    Re: Our revenue share with operator billing.

    Quote Originally Posted by jimgilmour1 View Post
    Tax in any country is on the profit thats the amount you get paid from the country of origin in Hungary case 25% in the UK currently 17.5%

    The other point is that if a return is made Ovi Nokia has to pay back 100% cost, so thats what they deduct from you. The SMS 40% is never recovered from the operator. On account this means you must sell another two items to recover the loss ie 60%+60% =120% -100% leaves you with a 20% profit on three sales so every "return" costs you -40% price of item. example sell item 10 euro leaves 6 euro profit. The return takes place and your account is deducted 10 euros leaving you with a minus (-4 euro loss!). so now you need to sell two items at 6 euro profit =12 euro minus to - 4 euro loss give a total profit of 8 euros for 3 sales and one return!!!.

    Jim
    Operator takes money for nothing.
    OVI it's same (no service, no support, many users reports download problem) for 30% ??? wth ?
    and VAT for Finnish gov? wow thats cool. I don't want to support any gov. Apple and android developers don't pay any penny!!!
    And if they have any problem with paying TAXs and they should move to some exotic islands.
    If you buy something on Apple store in Europe yours money go to Luxembourg
    If you want to know why read this http://www.pwc.com/en_LU/lu/vat/docs/pwc-vat-112005.pdf

  2. #17
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    Re: Our revenue share with operator billing.

    Quote Originally Posted by jimgilmour1 View Post
    Tax in any country is on the profit thats the amount you get paid from the country of origin in Hungary case 25% in the UK currently 17.5%
    Hi Jim,
    From my conversation with the Ovi support guys, we pay tax in Finland for all transactions across the EU. The VAT rate is the Finnish 22% for all European credit card transactions. I don't know how VAT effects operator billed transactions.

    The market will ultimately decide the faith of Ovi. Why would any developer invest the same time (or more) developing for Ovi when they can get twice the average return per sale everywhere else.

    Also the app sales figures on Ovi are massively lower than Android and Apple. Even if sales eventually pick up (I've been waiting for a year now and they're still hopelessly low), and eventually match other stores, we're still only receiving half the revenue offered by other stores.

    Any developer considering where they should invest their time only has to look at the success of other platforms and the revenue share offered by those platforms in comparison to Ovi.

    What I can't understand is why Nokia didn't simply copy the Apple model, which is what Google, RIM (Blackberry) et al did. RIM actually went further by offering 80% of developers. Nokia had a successful app store template (from Apple) but decided to ignore it and gave us Ovi which offers developers 50% less than its competitors.

    What's more no-one inside Nokia seems to realise the problem they've created for themselves - last month they were advertising a job for a "Operator Billing Manager" to "Project Manage deployments of operator billing connections and other payment methods to new countries". So operator billing at 50% will eventually spread to more countries and developers will receive less.

    Anyway, the market will eventually decide - there's only so much spin that Nokia can put on operator billing. Until Ovi offers developers a revenue share comparable to the other stores, Ovi will and should be the last choice of any commercially aware developer. Eventually, some-one inside Nokia will argue that operator billing and VAT are resulting Ovi failing to attract the same number of developers as other stores. Less app developers means less apps, means less phones sold and eventually this will hurt the share price. Also apps will be priced higher and this will have the same effect.

    Time will tell. It looks like operator billing is here for the long run, and eventually it will hurt Nokia's pocket as much as it's hurting ours.

    By the way, I still haven't heard back fro the support guys about the other costs.

  3. #18
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    Re: Our revenue share with operator billing.

    Quote Originally Posted by spol View Post
    Hi Jim,
    From my conversation with the Ovi support guys, we pay tax in Finland for all transactions across the EU. The VAT rate is the Finnish 22% for all European credit card transactions. I don't know how VAT effects operator billed transactions.

    The market will ultimately decide the faith of Ovi. Why would any developer invest the same time (or more) developing for Ovi when they can get twice the average return per sale everywhere else.

    Also the app sales figures on Ovi are massively lower than Android and Apple. Even if sales eventually pick up (I've been waiting for a year now and they're still hopelessly low), and eventually match other stores, we're still only receiving half the revenue offered by other stores.

    Any developer considering where they should invest their time only has to look at the success of other platforms and the revenue share offered by those platforms in comparison to Ovi.

    What I can't understand is why Nokia didn't simply copy the Apple model, which is what Google, RIM (Blackberry) et al did. RIM actually went further by offering 80% of developers. Nokia had a successful app store template (from Apple) but decided to ignore it and gave us Ovi which offers developers 50% less than its competitors.

    What's more no-one inside Nokia seems to realise the problem they've created for themselves - last month they were advertising a job for a "Operator Billing Manager" to "Project Manage deployments of operator billing connections and other payment methods to new countries". So operator billing at 50% will eventually spread to more countries and developers will receive less.

    Anyway, the market will eventually decide - there's only so much spin that Nokia can put on operator billing. Until Ovi offers developers a revenue share comparable to the other stores, Ovi will and should be the last choice of any commercially aware developer. Eventually, some-one inside Nokia will argue that operator billing and VAT are resulting Ovi failing to attract the same number of developers as other stores. Less app developers means less apps, means less phones sold and eventually this will hurt the share price. Also apps will be priced higher and this will have the same effect.

    Time will tell. It looks like operator billing is here for the long run, and eventually it will hurt Nokia's pocket as much as it's hurting ours.

    By the way, I still haven't heard back fro the support guys about the other costs.
    Right
    They simply can't copy functions, business model, work flow from apple store
    I am moving out of ovi store and NOKIA
    As every time NOKIA f.. it up again.
    Best regards NOKIA
    Last edited by xlazom00; 2010-04-28 at 08:29.

  4. #19
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    Re: Our revenue share with operator billing.

    Quote Originally Posted by spol View Post
    I don't know how VAT effects operator billed transactions.
    My understanding is that in the case of operator billing, the operator is doing the actual collection of money from the consumer, which means that the operator is the one that has to charge the VAT from the consumer.

    How this is then passed along in the chain via the revenue share to the operator, intermediate aggregators and service providers, to the actual content merchant (Nokia), is a different matter.

    Depending on the case, the VAT may also be possible to reclaim by the service providers (depending on which country the consumer is in and billed, and where the intermediate players in the value chain are incorporated).

    Taxation (VAT, GST, WHT, etc.) in international trade is major PITA, if you try to do it right (as big corporation like Nokia have to, or else...).

  5. #20
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    Re: Our revenue share with operator billing.

    I got a reply from the support guys. They still can't explain the figures. They can tell me what the estimated revenue should be... but I can figure that out myself.

    No one inside Ovi understands their revenue share model.

    No explanation of the VAT breakdown from Operator billing either.

    The other point is that if a return is made Ovi Nokia has to pay back 100% cost, so thats what they deduct from you. The SMS 40% is never recovered from the operator.
    This is interesting as I had four support emails, in the past ten days or so, where Ovi gave customers the wrong version of an app - a version that was incompatible with their phone. Each time the customer was forced to return it (forced by Ovi support - to be exact) so in this case I have to pay for Ovi's mess.

    Taxation (VAT, GST, WHT, etc.) in international trade is major PITA, if you try to do it right (as big corporation like Nokia have to, or else...)
    Why not copy the Apple model as every other store has done? Why implement a different system that makes you less competitive? It makes no sense.

    I've had an app in the top ten best sellers for the past few weeks. I'm still making less money than I'd get on welfare (the dole) from my three apps.

    All the spin from Nokia about huge numbers of free downloads is just that - spin. I've had huge numbers of free downloads. At the end of February, I reached the half a million mark for downloads of trial versions of my apps. Also at the end of February, I had a conversion rate from trials to purchases of 0.677% which is pretty disastrous to say the least (that's a little over half of one percent). It's got much better since Nokia fixed the search and customers can actually find my apps, but even now I'm still making less money than I would on the dole - and that's with an app currently in the top ten best sellers list.

    My point is, Ovi doesn't compare with other stores with respect to potential unit sales and it doesn't compare with other stores on revenue share. In order to make the same revenue from Ovi you require twice the trial-to-purchase conversion ratio as other stores. That's not happening.

    I am moving out of ovi store and NOKIA
    Why invest time in supporting Ovi when there are many other platforms (Apple, Android, Bada (Samsung), Blackberry)? I stopped developing for Ovi last February and moved to Android. I thought myself QT and then finished with Nokia. That's the market working as it should. I'd like to see Ovi become a success as it would be good for competition. At the moment, we have good platform and store competition... and Ovi isn't competitive so if the laws of the market prevail, Ovi should fail to attract developers and loose developers like myself to other stores.

  6. #21
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    Re: Our revenue share with operator billing.

    My experience from review of ma game on one page

    Hello I found a very nice game on ovi store
    nice gfx ,..........

    here is link on rapidshare
    nice

    app price: 2euros
    web page located: France
    I really don't think that people in France are poor.

    I never had same experience in review of iPhone game.


    Customers of NOKIA should simple learn to buy staff on ovi store and it's long long way.

  7. #22
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    Re: Our revenue share with operator billing.

    Got another reply from the guys in support last night. They still can't tell me how my estimated revenue was calculated. They're passing the query amongst themselves. It's must be very difficult to find an answer.

    I'm less hopeful of getting an answer now as the support guy who is now seeking answers told me six weeks ago that
    "There is no other cost other than the operator fee with varies between different operators. In some states in US, sales tax will be deduct in the sales and it varies among states. Nokia and operator [read publisher] split is still 30/70."
    I've since discovered that this is in fact incorrect - not true. VAT is paid across Europe. This is why I said no one in Ovi support understands how our estimated revenue is calculated.

    Also no answer on my questions regarding VAT. I asked
    - why are we paying VAT?
    - why aren't apps classed as "electronically-supplied service" where the place of supply rules indicate that this supply is *outside the scope* of VAT.
    - how does this effect our VAT threshold?

    I'll keep this thread updated. Stay tuned.

  8. #23
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    Re: Our revenue share with operator billing.

    Got another reply from the guys in Ovi support. This one comes with a health warning... if you suffer from high blood pressure, perhaps you should skip my next post. I'll update this thread sometime tomorrow. I've worked sixteen hours straight and I need to clear my RAM.

  9. #24
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    Re: Our revenue share with operator billing.

    Late last night I got another reply from the guys in Ovi support. Attached to the email was a breakdown of my sales and revenue. There are a couple of very interesting facts contained in this spreadsheet.

    In a previous post, I referred to an email conversation I had with a senior relationship manager. For some-one who holds such a title, this guy doesn't have a clue. (And he's not the only one - read on). This same manager told me...
    "I am sure you can also switch off the operator billing completely if you are not happy and just use credit card."
    When I pointed out that you couldn't switch off operator billing, he told me...
    "the cc [credit card] is disabled in a very small number of cases apparently"
    Apparently not. In the vast majority of regions we can not switch off operator billing. Looking through the spreadsheet I received, Operator Billing can be disabled in the following European countries:
    - Italy
    - Spain
    - Belgium
    - Hungry
    - Norway

    In all other EU countries [where I had a sale] it is not possible to turn off Operator Billing. Same applies to the US market: Operator Billing can not be turned off.

    This morning I did a quick search of Google news to see if Nokia is still spinning the line that developers receive 70% of revenue. And guess what, the third story that I found on Google news is exactly that. This time it's Kenny Mathers, Head of developer relations, Forum Nokia and Developer Community, telling the world that Nokia will pay 70% of all revenue to developers. Is Mr Mathers simply telling a lie, or is he as clueless as the manager whom I conversed with.


    Mathers said that students would receive 70 per cent of the revenue from the applications they created, with Nokia getting the remaining 30 per cent.
    I wonder if he knows that we can't turn off operator billing. Maybe not? I also wonder if he know that we pay VAT as follows
    - EU countries 22% VAT
    - Norway 25% VAT
    - Australia 10% VAT
    - Singapore 7% VAT
    - USA local sales tax varies,


    Other facts from that spreadsheet that will make you angry. In the past month I discovered we're paying VAT at 22% on credit card transactions but we also pay VAT at 22% on all Operator billed transactions.

    Hang on to your blood pressure pills, it gets worse... this 22% does not show up in our estimated revenue, it only shows up in our actual revenue. So our estimated revenue for Operator Billed transactions is always 22% greater than our actual revenue in every EU countries. Credit Card transactions on the other hand show the reduced revenue (total revenue less VAT) in the estimated revenue column.


    One last thing before I finish.
    Can anyone make sesne fo the following statement from the guys in Ovi support?

    ... the vat was taken out from the purchase based on the location of the customer. If the customer is in EU country, 22% was taken out from the sales price as VAT.
    If you're Finnish publisher, you will need to pay vat on the 70% amount that you receive from us. If you're not, then vat is not applicable to you.
    This is from the latest reply from Ovi support. Does this mean all developers outside Finland shouldn't be paying VAT? I'm not based in Finland so why am I paying VAT. All opinions are welcome. It reads a little contradictory...

  10. #25
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    Re: Our revenue share with operator billing.

    "... the vat was taken out from the purchase based on the location of the customer. If the customer is in EU country, 22% was taken out from the sales price as VAT.
    If you're Finnish publisher, you will need to pay vat on the 70% amount that you receive from us. If you're not, then vat is not applicable to you. "

    Heh, so we finns pay the VAT twice.

    BTW. I asked this VAT thing 3 times from the mail address I received in the payment, and I couldn't get the answer to direct question "Do I have to pay VAT?". I also called finnish tax authorities and they didn't know either. Well, I am going to pay the VAT because it is the safest thing to do.

  11. #26
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    Re: Our revenue share with operator billing.

    Quote Originally Posted by belabour View Post
    "
    Heh, so we finns pay the VAT twice.
    Hi Belabour,

    This does not add up. Check out double taxation rules. I can't understand how you could have to pay VAT twice. You never should. Can I suggest you contact the guys in support and ask for clarification? They are helpful but their knowledge is very limited.

    The fact we pay VAT is wrong. I've got clarification from the authorities in my country and I know I should not be paying VAT. I asked they guys in support to explain why I'm having VAT deducted and what are the implications for my VAT threshold. Perhaps it's a mistake and only Finns should have VAT deducted.

    For a one euro app, the revenue splits as follows:

    - Operator takes €0.50
    - Nokia takes €0.15
    - Finnish Government takes €0.077
    - Developer gets €0.27

    According to the reply from support
    If you're Finnish publisher, you will need to pay vat on the 70% amount that you receive from us
    You could read this as having to pay another 22% from the 27 cents [since everyone inside Nokia seem to believe that they're paying developers 70%]. That's another 6 cents. So you're left with 21 cents.
    The problem with the reply from support is that it's extremely rate that you will ever receive 70%, so perhaps what they're saying is that you must pay VAT of on all sales where you actually do receive 70%. In other words, outside the regions I listed in my last post. I don't know... but it could be read this way also.

    Considering the fact that we pay 50% to operators, how can Nokia implement a system that is completely different to that of Apple and Google and leaves the developer a further 22% out of pocket? I don't get it... why, it must be a mistake. It's indicative of what's wrong inside Nokia where senior management don't understand the market in which they're competing and end up with an product/service offering that wholey uncompetitive.

  12. #27
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    Exclamation Re: Our revenue share with operator billing.

    We should start do sometime
    It's nonsense!!!

  13. #28
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    Re: Our revenue share with operator billing.

    Another update... another reply from support.

    First a correction: We pay VAT on operator billed transactions at the local rate (the country where the sale takes place). However, we do pay VAT at 22% on all credit card transactions.

    The guys in support got an answer from their Finance department. It seems my interpretation of the VAT rules are correct. The following is from the Finance Dept...

    The vendor doesn't need to pay any VAT... according to the EU intra-community VAT rules the supply is exempt from VAT. This rule only applies to business-to-business invoicing.

    Later the Finance department email says...

    The VAT paid by Nokia is deducted from the content fee that is paid to the publisher as specified in the Ovi store T&Cs, but this doesn't cause any VAT liability to the publisher.

    It would appear that Nokia is pushing the cost of VAT back onto the developer. Although we're not liable for the VAT, we still pay it since it's in their terms and conditions. So saying they offer the developer 70% is actually completely untrue and completely unattainable.


    As we're not liable for VAT but forced to pay part of Nokia's liability, it looks like this 70% sales pitch statement is both false and misleading since no circumstance exists where we can earn 70% for sales in the EU. Ovi has unavoidable hidden fees and surcharges for all EU, US, Australian, etc sales which is usually how false and misleading advertising is defined. This is particularly true given the fact that both Google and Apple both offer developers a clean 70% cut and they have no such hidden fees.

    The only reason the 70% spit not being advertised as a 27% to 54% spit (which is much closer to the fact) is because Nokia would like developers to believe they offer a comparable service to Google and Apple. They don't and as we know the split is usually less than half that offered by their competition.

    It's time Nokia came clean and stated they offer between 27% and 54% of revenue for all EU countries. Since we're not liable for VAT and we can't avoid paying part of Nokia's liability, Nokia should be upfront with respect to the revenue share.

    I have entered into agreements with third party suppliers based on Nokia's publicised revenue share which now appear to be misleading, false and completely unattainable. It's taken a lot of work to get this information from Nokia and publish it onto this forum. I believe it should be published elsewhere and the 70% revenue share spin should cease immediately.

  14. #29
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    Re: Our revenue share with operator billing.

    Quote Originally Posted by spol View Post
    Hi Belabour,

    This does not add up. Check out double taxation rules. I can't understand how you could have to pay VAT twice. You never should. Can I suggest you contact the guys in support and ask for clarification? They are helpful but their knowledge is very limited.

    The fact we pay VAT is wrong. I've got clarification from the authorities in my country and I know I should not be paying VAT. I asked they guys in support to explain why I'm having VAT deducted and what are the implications for my VAT threshold. Perhaps it's a mistake and only Finns should have VAT deducted.

    For a one euro app, the revenue splits as follows:

    - Operator takes €0.50
    - Nokia takes €0.15
    - Finnish Government takes €0.077
    - Developer gets €0.27

    According to the reply from support


    You could read this as having to pay another 22% from the 27 cents [since everyone inside Nokia seem to believe that they're paying developers 70%]. That's another 6 cents. So you're left with 21 cents.
    The problem with the reply from support is that it's extremely rate that you will ever receive 70%, so perhaps what they're saying is that you must pay VAT of on all sales where you actually do receive 70%. In other words, outside the regions I listed in my last post. I don't know... but it could be read this way also.

    Considering the fact that we pay 50% to operators, how can Nokia implement a system that is completely different to that of Apple and Google and leaves the developer a further 22% out of pocket? I don't get it... why, it must be a mistake. It's indicative of what's wrong inside Nokia where senior management don't understand the market in which they're competing and end up with an product/service offering that wholey uncompetitive.
    I agree.

    Could someone in OVI please give us a definitive overview of this from an ACCOUNTANCY perspective?

    My company is VAT registered and is an EU corporate entity. As such, if I am deducted VAT at source, I should be able to reclaim it.
    In order to do so however I need to have the VAT amount clearly specified in reports. Otherwise my tax authorities will simply assume VAT is due on my sales and I'll be paying VAT twice.

    What should happen is that I supply my VAT number (which OVI has had since I registered) and I am paid ex-VAT.
    Then I pay VAT at my local state rate on sales - which in my case is 15%.

    The current model is illogical, and until I'm told otherwise, is just plain wrong from a EU accounting perspective.
    At the very least I should receive data that allows me to claim back 22%-15% worth of overpaid VAT but the reports don't specify this.
    Meanwhile my company will be perceived as evading tax liability. Simply because there is no evidence to the contrary.

    So, OVI accounts department management - please clarify and advise on this with a policy document. Let's sort this out! It's just basic stuff that needs clearing up...

    thanks
    Andy Storer
    | m o d i f i e d |
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  15. #30
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    Re: Our revenue share with operator billing.

    spol: you realy should learn to read the T&C before posting anything or before even registering as a publisher

    First: nokia pays 70% of the NET revenues not the GROSS revenues (its clearly stated in the T&C)

    Second: you wrote "It would appear that Nokia is pushing the cost of VAT back onto the developer. Although we're not liable for the VAT, we still pay it since it's in their terms and conditions. So saying they offer the developer 70% is actually completely untrue and completely unattainable."
    Nokia is NOT pushing the cost of the VAT back on the developers if you still havent figured it out here it how it goes (for the 1000 times i have explain this on this forum) Nokia bill the end user cell provider at X euros (depanding on your price point) out of which the cell provider takes a figure which is between 40% to 60% of X) Nokia pays the tax authorities the proper VAT of X based on the end user country after that Y is left out which is the NET revenue out of Y nokia takes 30% and you get 70%.

    Third: you wrote "As we're not liable for VAT but forced to pay part of Nokia's liability" you are not paying any part of nokia liability the liablity of VAT would have to be paid regardless as this is a sale to an end user and VAT must be paid so here nokia is taking care of paying the VAT for you while in App store for instance the money you get from apple is still VAT liable so you have to pay the VAT yourself out of the amount you get (im 90% sure of this need to double check though) the not liable for VAT should be in the reports if its not then thats an error on nokia's part.

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