request clarifications about FairDeal royalties

[Guest The PocketTV Team]

hi,

thanks for opening this software store, i think it's a good idea, since many developers don't appreciate the way handango does business.

the email that i received from MoDaCo states: "To start with, an industry leading 80% of sales revenues are paid to the developer."

but i went to the www.mobihand.com (the company that manages your FairDeal store), and i found something different on this page: http://corporate.mobihand.com/developers_contract.asp

it says:

For any Software sold, Publisher shall retain a royalty according to the following table:

20% of "Gross Revenue" - for any Software sold through Publisher's Own Channel via credit/debit card, Premium SMS, IVR, BOBO, and Direct Billing. This includes Publisher's Own International Channel.

40% of "Gross Revenue" - for any Software sold through Channel Partners via credit/debit card, Premium SMS, IVR, BOBO, and Direct Billing.

and defines:

CHANNEL DEFINITION

Publisher's main website, www.mobihand.com, is an Own Channel.

Publisher's Own International Channel include, but are not limited to, localized versions of www.mobihand.com (e.g. MobiHand Germany, MobiHand France, MobiHand Spain).

Channel Partners include, but are not limited to, Publisher's sales team, Enterprise and Education Resellers, websites with whom Publisher has special arrangements, or other means of distribution that Publisher may reasonably designate.

so MoDoCa FairDeal seems to be a "Channel Partner", therefore the royalty taken by MobiHand is 40%, not 20%.

unless MoDaCo is part of the "Publisher's Own International Channel".

Can you please clarify if that's the case?

Also, if we list our product on FairDeal, it will be on the mobihand.com catalog, correct?

Therefore, it will be sold by some other MobiHand partners, and in that case the developers will only get 60% of the gross price (i.e. 40% royalties), correct?

thanks.

Edited December 9, 2005 by The PocketTV Team

[Guest The PocketTV Team]

I received the answer to this question from MobiHand:

Normally, as you noticed on our developer agreement, the MobiHand margin is 20% on MobiHand-owned sites, and 40% on our network sites. Through an agreement with MoDaCo, we are applying the 20% margin to their site.

To clarify, in terms of % of gross sales: you will receive 80% of gross on sales at MobiHand-owned sites and MoDaCo's FairDeal store, and you will receive 60% of gross on sales at other MobiHand network sites. We take care of all transaction costs (e.g. credit card/ PayPal charges).

Also please note that currently the FairDeal store does a significant portion of our Pocket PC sales.

Concerning your question about the MobiHand catalog, yes, the agreement is makes your products available for sale across the whole MobiHand network.

So basically, it is true that all sales from MoDaCo FairDeal will return 80% of the revenues to the developer (i.e. 20% royalties).

But... it is also true that, in order to be sold on FairDeal, the software title must be listed in the MobiHand Catalog, and this means that it will also be sold through other MobiHand Channels, and some of those channels will only return 60% to the developer (i.e. 40% royalties, i.e. same as Handango and Motricity/PocketGear/Smartphone.Net).

[Guest Paul [MVP]]

Correct.

Basically i'm not taking my 20% margin :)

P

[Guest The PocketTV Team]

Correct.

Basically i'm not taking my 20% margin :)

P

<{POST_SNAPBACK}>

Thanks, it's nice, we appreciate.

We are in the process of adding our products to MobiHand, with a 60% OFF Christma Sale on some titles, e.g. http://fairdeal.modaco.com/product.asp?id=2193