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Developer Blames Apple For Ruining eBook Business
An anonymous reader writes "A bookseller and app developer has blamed Apple for writing its final chapter, claiming the iPad maker had pushed it out of business. 'Apple has made it completely impossible for anyone but Apple to make a profit selling contemporary ebooks on any iOS device,' BeamItDown said. 'We bet everything on Apple and iOS and then Apple killed us by changing the rules in the middle of the game.' The company blamed Apple's decision to impose a 30% commission on books sold through apps for the unhappy ending."
Well, that's why you don't put all of your apples in one basket (pun intended).
"I have altered the deal. Pray I do not alter it further."
Putting all your eggs in one basket is a poor business decision, and now you are reaping the rewards of that decision. Apple is not solely to blame here.
His eBook goes to (Chapter) 11?
Why, without your clothes, you're naked, Miss Dudley!
True, but would you really expect Apple to explicitly say "you are not allow to make any profit selling books on our platform"? From TFA:
* You must sell books from major publishers at the same price as Apple does.
* Those publishers must give you exactly 30% commission.
* iOS booksellers have to give 30% of their revenue to Apple.
Hence enforced 0% profit margin. I don't think you can blame them for thinking that Apple would never go quite *that* far. Of course they should have diversified to Android *anyway*...
"We bet everything on Apple and iOS and then Apple killed us by changing the rules in the middle of the game."
Sounds like they ruined their own business by making bad decisions. If Apple is being short-sighted by killing off the providers of content users put on Apple devices, then those providers are just as short-sighted by assuming Apple would be considerate of their interests.
Oh wait, this isn't from a content originator, this isn't the authors guild, this is another middle man.
I have some buggy whip makers who want to talk with you.
https://www.iflowreader.com/Closing.aspx
iFlow says that five of them spent nearly a year and a half of our lives and over a million dollars in cash and sweat equity developing the iFlowReader app with its unique AutoScrolling approach but all of it now has gone to waste. "We put our faith in Apple and they screwed us. This happened even though we went to great lengths to clear our plans with Apple because we did not want to make this substantial investment of time and money blindly. Apple's response to our detailed inquiries was to tell us that our plans did not infringe their rules in any way, which was true at the time, but there is one little catch. Apple can change the rules at any time and they did. Sadly they must have known full well that they were going to do this. Apple's iBooks was already in development when we talked to them and they certainly must have known that their future plans would doom us to failure no matter how good our product was. We never really had a chance."
This space for rent.
Oh dear God. My last boss wasted a day of our lives and a wodge of money paying some muppet to teach us that pseudo-psycho babble. Even worse than that bloody fish thing from a few years earlier (because after all, creating great software is just like trying to sell fish isn't it?).
While I do not feel bad for the guy, all he is doing is issuing a warning to other companies that are considering doing business with Apple or on IOS devices. This particular business made a bad decision that a little bit of observation of past behavior would have told them would end in tears. However, the point he is making is that Apple encouraged them to develop this market and business strategy, while Apple was already planning to cut the supports out from under it if the business was successful. Apple basically encouraged another business to take the risk of developing a market that Apple intended to steal if it worked out.
The truth is that all men having power ought to be mistrusted. James Madison
They invested significantly in Apple, had a *slightly* profitable business going. Then Apple effectively goes into "price-fixing" anything on the iOS platform, saying no-one can charge more then they do. As well, anything purchased on an iOS device will have to sacrifice %30 on the altar of Jobs. So:
1: a business starts up an app on [insert iOS device here]
2: business starts raking in profits
3: Apple notices, develops it's own app, as well as negotiating lower prices for itself.
4: Apple prices other business right out of it's market, due to %30 fee that affects everyone but Apple.
5: Profit
No ??????, it's pretty much cut and dry, and especially so now that Apple controls all the data mining from their iOS. This alone allows them to choose their battles, because they can see where the money flows. They can choose to try to take %30 of the profit, or all of it.
Every post here says some variation of "Quit whining. This is your fault for trusting Apple not to change the rules."
Which is not the point (or rather you are making the author's point for him). Apple's business practices are (and always have been) aggressively biased against third-parties. It's remarkably consistent and it's their Achilles heel.
The stark lesson is: do not develop for Apple platforms. No matter how shiny or revolutionary the hardware, and no matter how brilliant your idea, Apple will rip you off.
It breaks my pluginses, my precious!
No one thinks its a bad for a start up company with limited resources to put all its eggs in the Microsoft Windows basket.
Apple has the 80%+ market share with tablets. They have no choice but to rely on Apple for them to remain profitable. Other platforms aren't bringing in enough revenue at the moment to justify the investment.
If you read the blog post, the owner explains that they repeatedly asked Apple for a validation of their business model, and that the only response they received was that their app did not violate policy. Moreover, he suggests that Apple acted in bad faith by implementing iBooks to destroy his business model, without alerting him of their intentions.
He also states that they went through considerable trouble and expense to build an application, only to give it away for free and depend on revenue from a "middle-man" business model, where they would resell e-books that publishers were already selling.
He further states that all publishers had moved to an "agent" model where they require all resellers be bound to the same price, of which they get a 30% commission, so his margins were already razor-thin.
This all strikes me as very flawed business model from the beginning. This is not an app developer, this is a re-seller--a middle-man-- that happens to give away an app in order to sell e-books from it. The fact that he developed the app is immaterial, since it was not the product that he sold.
Did they really expect Apple to have their lawyers and business executives analyse their company's business model to make sure that it would be successful? Is it really Apple's fault that they didn't see the flaw in their "middle-man" re-seller model?
If his e-book reader is such a novel and marvelous app, as he suggests in his blog post, then why doesn't he just sell the app and let it stand on its own merit? He suggests that iBooks is just gimmicky with its page-turning animations, and that his app is superior; well, then he should be able to make money out of it. His business model was broken, not his app.
-dZ.
Carol vs. Ghost
Their app only has two reviews, and both of them are bad. Maybe they were going to fail anyway.
Under the new 'Agency Model', the publishers set the end-user price. They set that price at $10, and you, as an agent, get $3 of that. You can't change your prices up or down. Only the publisher can do that.
Sort of. They indeed can't affect how much you pay to license content. However, they don't need to: publishers no longer 'license' content— they give a fixed commission to sales agents. Many publishers give a different amount. Unfortunately, it's most commonly less than 30%. 30% is, in fact, the highest commission the publishers give any sales agents these days. So most booksellers will be getting perhaps $1.50 or $2 commission from that $10 book. But still, Apple will take $3 from them, meaning they have to pay $1 - $1.50 to the publishers out of their own pockets. Which is unsustainable, when it happens on every single bit of income your company makes (or a high enough percentage of it, like, say, more than 30% of your revenue sources).
They're not selling books through Apple's store, though. They're selling software. And they're happy to let Apple have 30% of the price of the software, since Apple hosts it on their servers, advertises it, etc. The situation you describe would suggest that if I created an eReader device and sold that at a Wal-Mart, then Wal-Mart should be able to claim a percentage of all money I make through that device. Which is wrong— they sold my eReader, so they got their commission on that. They can sell gift cards for it, and get commission on those. But they don't get commission on anything they're not involved with.
The problem, however, lies with the eBooks being sold. Apple doesn't do anything with those. You have to pay someone like Microsoft or Amazon for Azure or S3 storage, or you have to run your own server farm (trust me, 3 million eBooks needs an awful lot of space). You then need to look at CDNs so your customers on the other side of the world can pull down content as fast as your local ones. You need to hire lawyers to negotiate with the publishers, since Apple doesn't do that for you.
In the end, what is Apple charging 30% for? What service are they providing that is worth so much?
Credit card transaction handling.
That's it. They don't host anything, they don't pay for bandwidth costs, they don't help with acquisition. They don't even do a great deal to help you get customers, since they're actively trying to lure your customers away to their competing software offering.
Sure. The company I work for sells eBooks on just about every platform going. iOS i