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.'"

Not a rules change, just enforcing the rules

[Anonymous Coward]

They didn't change their rules, they just started enforcing rules already on the books.

> 11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected
> 11.3 Apps using IAP to purchase physical goods or goods and services used outside of the application will be rejected
>
> –Apple’s App Store Review Guidelines

Re:So what eBook to buy?

[log0n]

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.

Re:Does it have to be at the same price?

[alanQuatermain]

If the book comes from a publisher using Agency model, then the publisher chooses the end-consumer price, and the distributor (agent) cannot change it. The publisher takes 70% of the consumer price, and the remaining 30% goes to the distributor. Apple would be charging the distributor 100% of their revenue in this case, since they would take 30% of the consumer price.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Only people hurt are the users

[Xest]

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.

Re:Milking it - This is Correct

[Nom du Keyboard]

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.

Re:They aren't requiring that.

[srmalloy]

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.

Story is wrong

[goombah99]

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.

Re:They aren't requiring that.

[Kalriath]

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.

Re:Misplaced

[narcc]

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.