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Apple eBook Rules Changing For Sellers
An anonymous reader writes "In a 'pray I don't alter it again' moment for eBook sellers on apple iPad and iPhone devices, Apple is now requiring third-party eBook sellers like Amazon to also make their titles available through the Apple store, wherein the empire will take an additional 30% cut. 'Apple confirmed Tuesday that it would require app developers that sell e-books outside of their iPad and iPhone apps — through a Web site, for example — to also sell the books inside those apps. And purchases that originate in the app must be made through Apple, which keeps a 30 percent cut.'"
In a "pray I don't alter it any further" moment...
Fixed that for you.
Funny may not give karma, but +5 Informative never made anyone snort coffee out their nose.
Look folks, it's a we told you so moment. You bought the shiny hardware despite the warnings that you're going to be trapped in a walled garden. You are now at the whims of Apple and it's your own damn fault.
In related news, Ford demands 30% cut on Latte sales at drive up coffee shops citing in-vehicle purchase rules.
Sig Battery depleted. Reverting to safe mode.
And everybody who sells software that could run on Windows should send Microsoft 30%, right?
Can they sell them at a 43% price premium so they break even after Apple takes their 30% cut?
I'm a fan of Apple and their iOS devices (though I know many are not). But I disagree with this change. To make it an option is all well and good, I'm all for it, but to make it a requirement is a step in the wrong direction. I, for one, will continue to purchase my books from Amazon.com. eReader apps help sell Apple devices. IMO, Apple should treat them with more courtesy than this.
Those who have telepathy have no need to RTFA.
The problem comes if they try to force amazon to charge the same price in-app as they do in the web store. I doubt amazon will stick around through a decision like that. They still have to make a profit too. If they can't jack their prices up for the in-app store, then their profit margin might shrink to nothing, or put them in the negative.
Currently, the kindle app is one of the the only reasons I ever pick up the iPad anymore. Apple shouldn't mess with it. I have no qualms about ditching the iPad if they do...
With margins in the single percentage points for most on-line resellers, you think a 30% cut won't impact the users?
This will result either in a) fewer stores offering ebooks and thus less competition and thus greater prices, or b) stores raising their prices to cover the 30% cut, resulting in greater prices.
So tell me again how this won't affect the users?
Amazon either needs to take a loss on eBooks sold on Apple's platform, or else raise prices.
What's the marginal cost of an ebook?
Ceci n'est pas un sig.
Yeah, Sony is worthy of loathing here! Don't buy Sony!
... Sony which, in this case, is a very open entity - their e-book readers stuff is built around standards; and generally is more of a far from monolithic consortium, with many divisions almost struggling with each other; actively involved in many universally used standards (of course, those are not remembered as "from Sony"), offering one of most open DAPs, giving us CCDs to create with... even banking, and I don't remember them being involved in recent mess)
(really, it cracks me up how people are able, in their eyes, to single out Sony for boycott
What's the marginal cost of an ebook?
Since Amazon can't just sell any book it wants without an agreement and payment to the author and publisher, I'm guessing the price Amazon has to pay per unit sold is very much a non-zero number. Even if bandwidth is counted as free, everyone who got the ebook to the point to where it can be downloaded wants to get paid. It isn't like you can sell the first one for $10 million and give the others away free.
Tequila: It's not just for breakfast anymore!
Is there any reason Amazon can't just sell the ebooks for 30% more in Apple's store than in its own? Unless Amazon signed some binding contract, I think any judge would laugh Apple out of the courtroom for trying to make Amazon sell ebooks in Apple's store at a loss, or trying to make Amazon raise prices in its own store to subsidize sales in Apple's store.
Also, why are publishers still getting most of the money for ebook sales? There's nothing to publish. You still need an editor and a marketer, but there's no text to lay out, no pages to print, no bindings to make, and no boxes of books to distribute. Previously, publishing was controlled by a few companies who subsequently raised prices to where they were taking an exorbitant slice of the pie. But with the Internet, ebooks, and electronic publishing, you could do it all yourself if you wanted. This is a shakeup to the industry's business model which has long been needed.
Perhaps the filing of a complain to the FCC would be in order, maybe one to the DOJ antitrust division as well.
It worked for Google when Apple tried to pull the same thing with ads.
What Apple is really saying.. any book purchased through the Kindle app is subject to the same 30% cut [for Apple] that app developers have to give Apple. If you buy a $9 book in the Kindle app, $3ish goes to Apple. This is way less about expanding the iPad/Kindle catalog and more about Apple thinking they deserve a piece.
The big problem with this.. Apple gets their 30% cut from apps because they handle the store, transaction and delivery/updating/maintenance for iOS apps. Kindle purchases don't rely on or require Apple infrastructure, the app is mainly a means to a purchasing end. This is a 'I'm going to take my ball and go home' Apple money grab. What's to stop Microsoft from demanding 30% of any Kindle for PC purchase?
I like Apple, but these kinds of capitalist 'let's invent more ways to make money' motives really rile me.
No, the problem is requiring them to put everything on the Apple Store in the first place.
What happens if Amazon or B&N doesn't yield? Somehow the Kindle or Nook app gets "rescinded", and stops working when next their iphone or ipad updates. And then the other booksellers have to explain to their customers why all of a sudden, paid-for books can no longer be viewed on the device.
This is monopolistic practices: the next step is Apple announcing how they have "the largest selection of books" in the Apple Store, because they've forcibly extorted Amazon, Barnes&Noble, and every other ebook purveyor to put their books in the Apple Store or be cut off from the iPhone/iPod Touch/iPad market entirely.
I wonder what happened to the monopoly abuse lawsuit over iPhone only being on AT&T anyways...
are you considering raising the costs 30% by taking a cut, 'impacting users the least' ? i want to know which planet you are from. in the one i currently am, costs reflect on the customer.
Read radical news here
I'd say that portability (and, by extension, longevity) is very important, especially considering that eBooks are often not cheap. Currently ePub is a decent bet - it's supported by most readers (iPad, nook, Sony's range, etc.) and is a fairly simple open format, so even if it's not directly supported in future devices it will be easy to convert without loss of formatting and so forth. The one notable exception here is the Kindle, which requires books to be converted into its own format before reading.
The real problem, though is that if it's DRM'ed it's not portable, and can't be converted to another format. There are very few DRM free options out there, and none that do exist have the range that the major sellers do. Currently Apple forces sellers to use DRM, whether the author and publisher want to or not - I'm not sure how strong the DRM on Apple purchases is, but even so I'd recommend against supporting that behaviour by purchasing from them.
Which is what Apple wants, because then it's cornered the eBook market on it's platform killing off all competition on it's platform.
This is probably one of the worst examples of anti-competitive behaviour on Apple's behalf to date.
Isn't this more like the opposite of that?
Apple is squeezing itself in as yet another middleman in this instance
So, right now, on my iPhone app, Apple gets nothing when I purchase a book through Safari on my iPhone. Amazon gets the fee (30%) from the publisher for handling the transaction. Apples wants that transaction fee, or at least a portion of it, for itself. Further, Apple probably wants publishers to release more titles to its own book store ... and is holding other book stores' apps hostage in order to increase its own catalogue -- potentially surpassing Amazon's catalogue.
What will be interesting to see is what happens to Amazon's web site -- currently, if you purchase a Kindle book, you can choose where you want it sent (an actual Kindle, or any other device, including an iPhone, that's registered to your account). If you choose your iPhone, the book will automatically be downloaded the next time you open the Kindle app (honestly, it's pretty slick).
Apple is embarking down a sleazy path that makes MS at its worst look downright tame. MS just wanted to destroy other software companies. Apple has its sights set on: retailers; hardware manufacturers; OS developers (especially on small devices); it wants a cut of ALL media and software sold for its devices; it possibly even has cable TV in its sights. And it's getting there by creating an "ecosystem" that ties its different hardware, software, and sales platforms together. And then it's using its muscle to force even its competitors to adopt models that favour Apple.
Ouch.
How can even 5-10% be justified - any non-zero amount? I paid for my iPad, I paid for my kindle books - how can it be justified at all that I have to pay Apple to use a device I already own to look at content that I already own??? You said it yourself - they do no work, they add no value - they should get $0.00.
Versatility is the reason we BOUGHT the freakin' things.
Well then you bought the wrong freakin' thing.
"When information is power, privacy is freedom" - Jah-Wren Ryel
So the middleman gets squeezed out ...
Please explain how Author --> Publisher --> Apple --> Amazon --> Reader removed the middleman from what was Amazon's current models of either:
Author --> Publisher --> Amazon --> Reader
or
Author --> Amazon --> Author's mom.
and people save money
How exactly are book sales going to kick an additional percentage to Apple and be cheaper? Do you honestly believe that if Barnes and Noble and Amazon were not alternative shops for eBooks that Apple would have lower eBook prices, when it was Apple that allowed publishers to force Amazon and BN to raise their ebook prices several months back?
Respect the Constitution
The poster is correct that Amazon can't jack up prices for Apple's in-app store purchases. 30% is about what Amazon makes on Kindle books to start with, and Apple has a clause on book sales that you can't charge more in their bookstore than anywhere else that the books are sold. That required eBooks to be rounded up to the $x.99 cent mark because Apple apparently can't sell anything that doesn't end in .99 cents. Amazon would have no profit at all on sales through Apple under their contracts with publishers.
Just how many more reasons do we need to quit supporting this Apple walled garden garbage? When I buy a computer it is with the intent that I can load on it what I want to load on it -- not what Apple thinks I should be able to load on it.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
They are enforcing the original rules, which is that if you make an app that has a notion of in-app purchasing
Kindle App doesn't have in-app purchasing. It has a button for "Kindle Store", but that just opens the browser directing you to the appropriate section of their website, and all books are then purchased there. The trick is that once a book is purchased in the store, it is pushed to Kindle devices that you own - including the Kindle App. It looks like Apple is not happy about this.
Well, I don't see why Amazon should give Apple a cut in the above model, and if they ditch the app, I'm pretty sure I won't be buying iPad 2 (iBooks is meh).
They are enforcing the original rules, which is that if you make an app that has a notion of in-app purchasing--you have to offer the content via Apple's in-app purchasing model, although you are free to offer the user the choice of two models and there's nothing that says they have to be the same price as far as I know.
Pardon? Go back and read the article; Apple is requiring that, if an app developer sells e-books outside the app, they must also sell the e-books inside the app, and all such in-app sales must go through Apple, which will graciously only charge 30% of the sale price for the privilege of being forced to sell through them.
commodore64love has blacklisted google, so for her/him it must be hard to google CCD or DAP. Probably uses Bing . . . nope, MS is blacklisted. So that leaves yahoo . . . is it hard to yahoo stuff?
The Slashdot story is wrong. It's nearly right but there is a subtle, crucial difference:
"“We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app,” Trudy Muller, an Apple spokeswoman, said in a statement. "
This does not force amazon to offer all its wares inside the apple store. But it will prevent Amazon from advertising those wares inside the apple store if it does not offer the through apple.
What they are saying is that if you advertise a route to purchase something in the app then there has to be a way to purchase it through the apple store. Their idea is that free apps should not be used for marketing. Their rationale is that free apps are a burden on apple since they run the apple store. If the free app is generating revenue it has to pay.
Do I agree with this? No. It's my phone and my apps. I don't like apple deciding what apps get offered.
It seems like a reasonable compromise would be to allow app developers who want to offer free apps that are conduits to their own stores to pay a "service fee" to apple for the app. That's justified for added value apple brings to an orderly app store. The problem with this is that unless the service fee is pro-rated to the value of the external sales then it means smaller stores get pinched more by a flat service fee than larger stores that amortize it over many purchases. This brings us back to a per-sale fee which is apple's position.
I think the real problem here is not sales commission but the size of the commission. 30% seems like an exorbitant commission.
Some drink at the fountain of knowledge. Others just gargle.
Actually, Apple has explicitly refused to say whether Amazon is against the rules (they wouldn't apparently answer when asked if they'll be reviewing whether Amazon's app falls within them). It could be that they have no issue (or rather, would have trouble portraying it as a legitimate one) with Amazon's implementation - I'd say Sony tried to do in-app purchasing via their own store.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
If by "creative accounting" you mean "how numbers work".
Really, this should be obvious to the average middle-schooler.
Let's say that I buy books from a publisher for $7 and sell them for $10. I would make $3 each time I sold a book. $3 is 30% of $10.
Now, let's say that I want to sell my books at your store. You allow me to sell them if I give you 30% of each sale.
If I sold my books for $10 at your store, you would get $3 (30%) and I would get $7. However, I need to give my $7 to the publishers. That means that you get $3 and I get $7 - $7 = $0 -- That's not a good deal for me.
I want to make $3, so I must raise my prices. How much do I need to raise prices so that I still get $3 after I pay the publisher and you take your 30%?
I can use the formula I gave you earlier: NewPrice = OldPrice * (100/(100-AppleTax))
10 * (100/(100-30)) = 14.2857 (Let's just call that $14.29 )
So, when I sell my book at your store for 14.29, you get 30% ($4.29) and I get $10 of which $7 goes to the publisher. That means I get to keep $10 - $7 = $3 dollars (the amount I was earning before)
That means I need to raise my prices by 43% to keep my profits the same.
To give you 30% means that my customers must pay 43% more than before!
See how easy that is? It's neither tricky or "disingenuous" -- it's perfectly correct and obvious to all but the most numerically illiterate.
This is all moot anyhow, as Amazon was forced on to the agency model -- publishers set the price and give Amazon a 30% cut. (Amazon couldn't raise prices if it wanted to.) To give Apple 30% means that Amazon gets nothing, as explained to you above.
Required reading for internet skeptics