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Apple eBook Rules Changing For Sellers 584

Posted by CmdrTaco
from the and-you'll-like-it dept.
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.'"
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Apple eBook Rules Changing For Sellers

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  • Milking it (Score:2, Insightful)

    by ceswiedler (165311) *

    Apple is better than anyone at getting the most revenue out of a product or service while impacting users the least. Sony is one of the worst--look at the crap they tried to do with MiniDiscs. Apple knows where to get money where it won't irritate people to the point of cutting into their market share, and they know where NOT to get money. Good or bad depends on your point of view, but nobody can milk a cash cow like Apple.

    • Re:Milking it (Score:5, Interesting)

      by rwven (663186) on Wednesday February 02, 2011 @02:11PM (#35081454)

      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...

      • by joebok (457904)

        Exactly - I do like my iPad - I have it handy at home for couch-surfing, and I carry it on my commute for entertainment; 80% reading maybe 20% video. Besides safari, mail, and kindle, every other app has faded in interest. If Apple screws with my kindle app the iPad will get left behind and I'll probably upgrade to a newer kindle. If ebook prices go up generally, I will go back to the used book store.

      • Re:Milking it (Score:5, Insightful)

        by Moryath (553296) on Wednesday February 02, 2011 @02:35PM (#35081794)

        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 [windowsitpro.com] over iPhone only being on AT&T anyways...

        • by Graff (532189)

          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.

          The only apps that have ever been removed were ones that were deceptive or illegal in the first place. I've done quite a bit of searching and I can't find any cases where Apple removed an app from the App Store and also forced its removal from a device. What usually happens is that people who already have the app on their devices can still use it even though it's no longer available in the App Store.

          We can speculate all we want about how it might happen some day but until that day happens it's all FUD.

          The t

        • Story is wrong (Score:4, Informative)

          by goombah99 (560566) on Wednesday February 02, 2011 @05:06PM (#35083892)

          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.

      • by Nom du Keyboard (633989) on Wednesday February 02, 2011 @03:46PM (#35082718)
        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:Milking it (Score:5, Insightful)

      by cptdondo (59460) on Wednesday February 02, 2011 @02:11PM (#35081468) Journal

      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?

      • I didn't say it wouldn't impact users. I said it would generate revenue while impacting users the least. That's good business. It will certainly make some users go elsewhere, but not many. I was contrasting with the dumb decisions Sony and other companies make, where they severely limit what users can do in the hopes of increasing revenue, and end up killing the technology because nobody wants it with those restrictions (c.f. Minidisc). That's bad business.

        Whether this is good for consumers in general, or f

        • I think if they wanted to "generate revenue while impacting users the least" the best way would be to keep going with their current model, making money off of providing decent hardware and a platform which some people for some reason tolerate.

          If they really try to push 30%, they'll probably end up with less users, and eventually end up with no revenue. I think 5-10% could perhaps be justified, but 30? Why? Apple are doing no work for this. I'm pretty sure the iPad will be benefitting more from the eBook mar

          • Re:Milking it (Score:5, Insightful)

            by joebok (457904) on Wednesday February 02, 2011 @02:52PM (#35082036) Homepage Journal

            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.

    • Re: (Score:3, Insightful)

      by Anonymous Coward
      Yeah, Sony is worthy of loathing here! Don't buy Sony!

      (really, it cracks me up how people are able, in their eyes, to single out Sony for boycott ... 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, gi
      • by sznupi (719324)
        They are an evil Japanese competition, you should be happy for their failures!
    • ha ? (Score:4, Insightful)

      by unity100 (970058) on Wednesday February 02, 2011 @02:38PM (#35081822) Homepage Journal
      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.
      • by 517714 (762276)
        Not 30% - 42.8% (1/.70 - 1)

        30% is 30% of the gross, not of the current selling price.

    • by tgd (2822)

      Except this policy impacted users enormously.

      When Apple jumped into the market for iBooks, Kindle books jumped in price. Some, not by a lot, but many by 50% or more.

    • Apple is better than anyone at getting the most revenue out of a product or service while impacting users the least.

      In comparison to what? I'd like to see a metric for how you qualify "impacting users the least."

      I misguidedly adopted iTunes many years ago and continue to be bitten in the ass over it again and again. How many times have you had to migrate your iTunes library to a new machine and then get it all working with your iPhone without losing any apps or media? How much of your media collection is embargoed because of Apple DRM? How much of your media metadata do you need to reapply after a fresh migration? I've

    • If I said this about Microsoft I'd be troll.

  • Misquoted (Score:5, Insightful)

    by SilverHatHacker (1381259) on Wednesday February 02, 2011 @02:02PM (#35081334)

    In a "pray I don't alter it any further" moment...

    Fixed that for you.

    • In a "pray I don't alter it any further" moment...

      Unless they also have some rule that says the content must be at the same price they will undoubtedly need to alter it further to require that too otherwise I'm sure the content will be made available in the app...with a 30% markup to cover the Apple fee of course. This will result in nobody using the in-app purchase and everyone using the external method.

      • Arghhh! ...of course I meant a 43% markup to cover the 30% fee!
      • by sorak (246725)

        In a "pray I don't alter it any further" moment...

        Unless they also have some rule that says the content must be at the same price they will undoubtedly need to alter it further to require that too otherwise I'm sure the content will be made available in the app...with a 30% markup to cover the Apple fee of course. This will result in nobody using the in-app purchase and everyone using the external method.

        Can they display it on the receipt as "Apple Tax (30%)"? I would just love to see someone have the balls to place blame where it is due, here.

      • by wordsnyc (956034)

        No, actually, probably only about 10% of iPad users will figure out that it's just as easy to buy stuff outside the app, and unless there's a price advantage to the customer, precisely nobody will bother. Trust me on this, the average consumer doesn't give a flying fig about bookseller/publisher/author profits.

    • Re:Misquoted (Score:5, Insightful)

      by nitehawk214 (222219) on Wednesday February 02, 2011 @02:36PM (#35081806)

      In a "pray I don't alter it any further" moment...

      Altered that for you.

      Altered that for you. Pray I don't alter it any further.

  • by Anonymous Coward on Wednesday February 02, 2011 @02:04PM (#35081366)

    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.

    • by haruchai (17472)

      I normally don't give mod points to ACs but if I had any, you'd get one

  • Ridiculous (Score:3, Insightful)

    by Cinder6 (894572) on Wednesday February 02, 2011 @02:04PM (#35081368)

    So now, not only do sellers need to give (most) of the money to publishers, they now have to give another 30% to Apple. Since I know at least Amazon sells really close to their own cost (or even less, in some cases), this would mean Amazon either needs to take a loss on eBooks sold on Apple's platform, or else raise prices.

    Which is probably what this really is all about. Force other eBook sellers to raise prices, and now Apple's own solution looks much more attractive. Sure, they can still sell on their own separate website, but users will likely just choose the easiest option and get turned off by the higher prices, thus not even checking out the website.

    • Re: (Score:3, Interesting)

      by KhabaLox (1906148)

      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?

      • by Kenja (541830)
        Its what ever the copy write holders say it is.
        • Re: (Score:2, Insightful)

          by ScentCone (795499)

          Its what ever the copy write holders say it is.

          People who can't be bothered to understand that the term is "copyright" should avoid expressing an opinion on the matter.

      • Re:Ridiculous (Score:4, Interesting)

        by Pharmboy (216950) on Wednesday February 02, 2011 @02:21PM (#35081620) Journal

        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.

      • 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?

        Not sure, but I suspect you have a good point. 70% of the cost of a real book is distribution, and that isn't counting printing and binding. Publishers want to maintain that 70%+ even though eBook "manufacturing" and distribution costs are so small it's difficult to measure. Apple, it seems, wants to skim the publishers' windfall.

        Who's the more foolish? The fool, or the fool who follows him?

    • Re:Ridiculous (Score:5, Insightful)

      by Solandri (704621) on Wednesday February 02, 2011 @02:24PM (#35081658)

      So now, not only do sellers need to give (most) of the money to publishers, they now have to give another 30% to Apple. Since I know at least Amazon sells really close to their own cost (or even less, in some cases), this would mean Amazon either needs to take a loss on eBooks sold on Apple's platform, or else raise prices.

      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.

      • by hackerjoe (159094)

        Is there any reason Amazon can't just sell the ebooks for 30% more in Apple's store than in its own?

        Did you read the comment you're replying to: "...Force other eBook sellers to raise prices, and now Apple's own solution looks much more attractive...."?

        Since the publisher is the one paying royalties to the authors, I hope the publisher's getting the lion's share of the money from distribution. I'm not optimistic about what the author gets after that either, but that's a separate complaint, isn't it?

      • 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[...]But with the Internet, ebooks, and electronic publishing, you could do it all yourself if you wanted.

        You always could do all of that by yourself. And you'd then be a publisher and not a writer. Guess what most writers like to do? It ain't the things publishers do.

        Also, you're wrong. Every electronic reader has a different set of widgets and funky behaviours when it comes to ebooks. Making sure that your text looks good in all of the good ones is a huge job, so there's layout back into the equation. Still got to worry about getting a number for the book. Still got to worry about getting the book uplo

    • by CaptBubba (696284)

      I wonder if Apple would allow sellers to have both options but differing prices for each one. Perhaps the app could show the options of buying an ebook from Amazon direct for $9.99, or buying in-app via iTunes payment for $14.50.

      It could be handy for someone who got an iTunes Gift Card, for example.

    • by Graff (532189)

      So now, not only do sellers need to give (most) of the money to publishers, they now have to give another 30% to Apple. Since I know at least Amazon sells really close to their own cost (or even less, in some cases), this would mean Amazon either needs to take a loss on eBooks sold on Apple's platform, or else raise prices.

      This is a logical extension of existing rules.

      Since you can have free apps in the app store what was happening was a developer would make their app free and then sell content (game levels, sequels to the game, in-game items) outside of the app store, circumventing the payment to Apple. So now Apple is advertising the app, hosting the app, and using their bandwidth to provide it to the user but not getting anything in exchange. Apple eventually changed the rules and required that payments for new functionali

    • by furball (2853)

      The requirement is that the book has to be available as an in-app purchase. There's no requirement I've read that the price has to be the same. If someone wants to pay 30% more for the book off of an in-app purchase, that's their business.

    • Re: (Score:3, Insightful)

      Amazon's former e-book model was "Amazon sets the retail price, publisher sets the price to sell to Amazon." Apple forced Amazon's hand last year with the agency model -- the publisher sets the price, Amazon takes a cut. Prices have /already/ been raised in most cases. http://arstechnica.com/gadgets/news/2010/04/e-book-prices-to-rise-as-amazon-sony-adopt-agency-model.ars [arstechnica.com]

      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 th

    • by kithrup (778358)
      In many cases, Amazon is not allowed (contractually) to set the price -- the publisher does. This happened last year, when Amazon and MacMillan had their kerfuffle. If you look at Kindle books, if it says "The publisher has set this price," that's what's going on there -- and the publisher has graciously allowed Amazon to take 30% profit on the price the publisher dictates. So, no, Amazon won't be raising prices. They can't. And since Apple takes 30% of the sale price, and the publishers have graciousl
  • by John.P.Jones (601028) on Wednesday February 02, 2011 @02:06PM (#35081388)

    Can they sell them at a 43% price premium so they break even after Apple takes their 30% cut?

  • Really, Apple? (Score:3, Insightful)

    by egandalf (1051424) on Wednesday February 02, 2011 @02:06PM (#35081392)
    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.
    • Re:Really, Apple? (Score:4, Insightful)

      by mcsqueak (1043736) on Wednesday February 02, 2011 @02:13PM (#35081506)

      Yeah, I too like Apple, and I don't have a problem with their business practices in most cases. Hey, you make a super popular device, you deserve to profit from it, plain and simple.

      But this move is adding nothing of value to the user, and simply inserting another middle-man to take a slice of someone's (in this case, Amazon) profit. I hope no one wonders why E-Book prices will most likely go up instead of down - more folks are getting into the game, which means more hands are reaching into the pot of money for a payout.

      • As an "also a fan of Apples, and owner of an iDevice" I have to agree. This is a poor decision in a number of ways. If I were B&N or Amazon I'd have to wonder if it didn't make more sense to pull my app. They'd really rather you spent money on their e-readers anyway, iPhone and Android apps are a convenience for their customers more than I profit center I'd think. In the event that the e-readers are either pulled or charge a premium for iDevices, I probably won't buy the iPad I was thinking of this


    • I bought an iPad primarily for the ability to read Kindle books. If this move impacts the price of those books, my iPad will almost become a very expensive brick. Of course my question: What if I buy a Kindle book on the PC, then sync the iPad? Do I have to pay Apple for that? If so, Apple becomes a rent-seeker, plain an simple, which is far worse than anything Microsoft every did. Microsoft never asked for compensation for the content I loaded using Windows apps. IANAL, but I also have to wonder if there i
      • by Port1080 (515567)

        Well said...this is definitely making me think my next smartphone will be Android-based, and if I ever purchase a tablet it will almost certainly be Android-based, rather than an iPad, if they keep this crap up.

    • by Sancho (17056) *

      Personally, I bought an iPad because it gave me the best of both worlds--I could use Nook or Kindle books, or iBooks if I was really crazy. If that breaks, I'll sell my iPad and get the first 3.0 Android tablet as a replacement.

      What we really need is device-independent books. That's going to be hard to do with DRM, though.

  • Apple can't possibly require anyone who sells something over a website to also sell it through an Apple portal. Doesn't even make sense as phrased.

    This probably has something to do with vendors who have an iPhone/iPad app that jumps out of the app to a webpage for making purchases and then downloads content consumed by the app--neatly circumventing the Apple 30% cut. Still kinda a dick move, though.

    • by KhabaLox (1906148)
      I think the idea is that they will simply reject your app if you don't offer in-app purchases. This is probably not a requirement that scales very well, but other than Amazon, who are they really targeting? This begs the question: If Amazon refuses, can/will Apple remote uninstall the already installed Kindle apps on various devices?
  • by 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

  • Complaint to FCC ?? (Score:5, Interesting)

    by Zelgadiss (213127) on Wednesday February 02, 2011 @02:26PM (#35081686)

    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.

    • by Drathos (1092)

      I believe you mean F*T*C (Federal Trade Commission), not FCC (Federal Communications Commission).

    • 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.

      You are confusing the Federal Trade Commission (FTC) with the Federal Communications Commission (FCC).

      And, AFAIK, the only thing that "worked" is:
      1. There are rumors the FTC launched an investigation, and
      2. The FTC did approve Google AdMob acquisition, citing competition from iAd.

      What hasn't happened, AFAIK, is any change to what Apple is actually doing with iAd.

  • Looks to me like Amazon could fulfill the requirement by removing the "buy" option from the app entirely, and just having the app access already-bought books. Users could still buy though the web page, they just couldn't get to it directly from the app.

    • by Xest (935314) on Wednesday February 02, 2011 @02:42PM (#35081874)

      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.

    • by tgibbs (83782)

      Looks to me like Amazon could fulfill the requirement by removing the "buy" option from the app entirely, and just having the app access already-bought books. Users could still buy though the web page, they just couldn't get to it directly from the app.

      Amazon does not include a "buy" option in the app itself--it just forwards the user to Amazon's web site in Safari. This is perhaps not elegant, but it is not a problem. But one reading of Apple's requirements is that any app that offers "outside the app" purchases must also offer "in app" purchases, presumably giving a 30% cut to Apple. Assuming that Apple did not permit Amazon to just tack on 30% to the in-app price (which would basically cause users to do what they do now--use Safari), this would almost

  • Think different. Until we have you locked in, at which time we will encourage you to not think at all.
  • How do they plan on enforcing this? I just don't see how they could.
  • This reminds me of the old days when Standard Oil demanded a percentage of the take from any railroad that dared to ship a competitor's product.
  • This is just weird. It's almost like Apple's operating as though they have no competition. Example: if an ebook from Amazon or B&N is 30% more expensive on the iPad than it is on, say a Nook or Android tablet (because book sellers will *have* to pass on that extra 30% to the customer), then another tablet is a better option, no? Eventually, it'll squeeze all the other publishers out, and only Apple will be able to sell ebooks on the iPad, which is probably their ultimate goal. I mean, if I were a 3rd pa
  • Not an iPad owner, but I know that Amazon has some free public domain books in their library. So, under this rule, would Amazon be required to give 30% of $0.00 to Apple, or would they be required to start charging?

  • Not that I agree with what Apple is doing, but isn't Amazon a direct competitor in the ebook market? Forget for the moment that there's a Kindle App. Amazon sells ebooks for the Kindle. As far as I can tell, there's no in-device "app" or tool within the Kindle to buy Apple ebooks, right? And yet, when Amazon takes advantage of the fact that they can actually sell ebooks within the very popular device of their competitor - everyone jumps on Apple for wanting a cut?

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