Developer Blames Apple For Ruining eBook Business 660
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."
Business 101 (Score:5, Funny)
Well, that's why you don't put all of your apples in one basket (pun intended).
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Smells like capitalism to me.
Your business failed.
C'est la vie.
Re:Business 101 (Score:5, Insightful)
The lesson here it that Apple has become the Wal-Mart of software and services. The application and content developers who make money via Apple's presence do so only to the extent that it generates as much revenue for Apple as Apple desires. If your business model can't withstand Apple's requirements, your business will fail.
In other words, betting your business on Apple make a lot of sense, if you're Apple. Anyone else, maybe not so much.
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If you buy platform object A from store B, you should be able to use add-on item C (which was made for object A) even if you buy it from store D, but store B puts up a special lock that won't let anything that wasn't bought from store B into platform object A. Why do you think that's fair, right, or just.
There are a number of legal terms for this kind of lock-in, and all the ones I kn
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Likewise the easybake bakes only at a fixed temperature that works well only for the easybake mix. Sure it could be set to another temperature if the manufacturer allowed, but that's not the point.
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...except I am always free to shop at a Walmart competitor.
That option does not exist in Apple's brave new world.
Walmart only makes it harder for competitors to survive. It doesn't BAN them outright.
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My shaver has more CPU power and ROM than a C64, that does NOT make it the computer you're looking for.
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You're assuming that they had a 70% profit margin, which most publisher's will not give a distributor at all. Publishers won't give a distributor even close to a 30% cut of sales. It just doesn't happen, which means when Apple suddenly and without warning decides to take a 30% cut, they go from making a minimal but survivable profit to negatives. The fault here lies with both Apple for changing their terms like they did and with the publishers for absurd practices where they are dictating such small profit
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Re:Business 101 (Score:4, Insightful)
It is however easy to say that someone is retarded for building their business exclusively around iOS - especially when Apple already had a directly competing service built in.
A few days ago some guy was eagerly trying to tell me how iOS is the future of console gaming and will make the Xbox and PS3 obsolete etc, just because he develops iOS games. The iPhone and iPad are doing well right now, but he should at the very least try porting some stuff to Android (and maybe Xbox Live and PC) if he doesn't want to be screwed over in the same way that these eBook guys were. Even if Apple don't try to manipulate the iOS gaming market, the current success of iDevices is not guaranteed forever.
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And you smell like a coding monkey to me. It's not easy to say 'it's life' when your business bankrupt if you're a capitalist. Pawns of capitalism (ie. workers) mostly have no idea how hard is to run a business, that's why regardless where they work, they always complain about their bosses and working environment.
No, he has the lesson right. History is full of the sad tales of businesses that failed because they depended entirely too much on one specific other business whether that other business is a supplier, customer, or middleman. This is yet another case of depending too heavily on another business to act as middleman/distributor. The lesson really is to not depend too heavily on one other business whose interests are its own, not yours, unless you're willing to take the risk and not cry too hard when the ot
Re:Business 101 (Score:5, Insightful)
Smells like capitalism to me. Your business failed. C'est la vie.
Their business didn't fail. They weren't even simply priced out of the market. It was a combination of pricing and fees. Yet the fees affect only non-Apple apps, giving Apple one heck of an advantage.
Apple can price lower and still profit, while non Apple companies can't compete at the same price because of the %30 fee that Apple demands. With Apple able to data-mine all the statistics and money that flow through the iOS and Apple's servers, they're REALLY got an advantage that no other company would have. I would suspect a lawsuit will eventually come out of this (not this particular company), but it probably wouldn't go far.
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Yet Amazon is doing well.
you need to play their game. buy in all you pay a hefty fee. buy through the website and ZERO fee.
Re:Business 101 (Score:4, Interesting)
Amazon or Apple will become the middlemen to end all middlemen. What's surprising is that this guy was totally aware, like everyone else, that this is the case. I mean, he watched it happen with regular paper book stores and physical plastic music shops.
There is no such thing as a little guy middle-man anymore.
"There can only be one."
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This should be an interesting fight. I can amazon taking apple to court because apple is forcing them to price their merchandise a certain way. Amazon could drop the in app purchases. I tend to buy my books online and have them pushed to my devices. But something is going to come to a head. Will apple start demanding a cut when people buy a tent from Amazon? Or a motorcycle from Ebay?
I bet Amazon would love to get a 30% cut from a home purchase off a craigslist app.
Amazon could drop the in app purchases.
Actually they can't -- that's the sticky part of all of this. Apple is mandating that any app that directs you to a website for purchasing ebooks, has to allow purchasing in-app (eg not via the website), and, oh yeah, the e-book price is fixed (by the publisher), at 30% commission for the seller, and Apple takes a 30% cut of revenue.
So... you can't bypass Apple when purchasing, and Apple takes your entire commission from the publisher, leaving you with... all the cos
Re:Business 101 (Score:5, Insightful)
This really should come as no surprise to anyone at all.
This is Apple. This is what they do. This has been their form of business for, what, 30 years? If you are not Apple, do not trust Apple, do not rely on Apple, Apple is only, ONLY, interested in Apple, and has never hesitated to lock down their platform and squeeze dry anyone not Apple trying to do business on their platform.
I mean for the love of god Apple driving out non-Apple products from their platform was one of The Big Reasons why Apple nearly closed it doors, why it fell apart in the 80s/90s. It was the open platform of the IBM-compatible PC (lol, anachronistic terms!) where anyone could write and sell their own program that allowed it to flourish, when doing the same on the Apple platform would.. wait for it.. drumroll please.... reduce profits to absolutely nothing due to Apple's onerous licensing fees!
I mean really people, I feel bad for any company failing that is just trying to make an honest living, but there is such a thing as a deserved death. It's not like Apple has ever, ever, EVER turned a new leaf. This has been how Apple operates for DECADES. You've gotta be a special kind of idiot to put your faith and livelihood in a company that has, time and time again, bitten the hand of anyone not Apple trying to make money on an Apple product. THAT IS APPLE!
Re:Business 101 (Score:5, Informative)
I agree with you Kreigaffe, it's nothing new for apple to shaft it's partners, but a lot of these people out there don't know apples s.o.p. of business, so forgive them for being a bit naive.
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I mean for the love of god Apple driving out non-Apple products from their platform was one of The Big Reasons why Apple nearly closed it doors, why it fell apart in the 80s/90s. It was the open platform of the IBM-compatible PC (lol, anachronistic terms!) where anyone could write and sell their own program that allowed it to flourish, when doing the same on the Apple platform would.. wait for it.. drumroll please.... reduce profits to absolutely nothing due to Apple's onerous licensing fees!
Oddly, I remember things differently. I thought that it was the low cost Mac clones that nearly drove Apple out of business (I actually owned a PowerComputing Mac at one time). Then, when Steve Jobs came back and killed the clones, I figured that that would be the end of Apple. It turns out that I was wrong.
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Smells like capitalism to me.
Your business failed.
C'est la vie.
I can't help wondering if you (and others) would be singing a different tune if this was Microsoft or Comcast. Remember how they shut-out AOL? Netscape? Or more recently: Skype on Linux?* Or 150GB datacaps to shutout Netflix, Hulu, etc?
*
* hasn't happened yet, but it's easy to hypothesize the possibility
Re:Business 101 (Score:5, Insightful)
This isn't capitalism. If I'm understanding this right, these guys developed their own application to distribute and read ebooks and before Apple's influence, made their own pricing deals with the publishers. This allowed them to buy books at a 50% margin, $10 book for $5 and make a $5 profit on non-iOS devices and a $2 profit ($3/30% to Apple). Under this model, the business was surviving.
Now Apple is forcing publishers to sell to everyone at the same 30% margin. So now a $10 book costs these guys $7 and they make a $3 profit on non-iOS devices but make NO MONEY when the book is sold on an iOS device. So because of Apple's hand in agreements between publishers and OTHER retailers, these guys are basically forced to give books away for free. On an application, distribution model and business they developed themselves.
How is this not anti-competitive? Why is Apple able to dictate the wholesale price of books to retailers other than Apple?
I don't want to make a stupid car or computer analogy here, but this just doesn't seem right.
Re:Business 101 (Score:5, Insightful)
So Apple fixed the price they buy and sell books at, took all of their margin and ended up shutting out a competitor on their platform and you're okay with that? They're "whiny bitches"?
This isn't WAL*MART coming in and selling shoes for less than your business. This is WAL*MART coming in, telling your suppliers how much they can charge you for shoes, telling you how much you can sell shoes for and taking 30% of your revenue (which is all of it).
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Hardly. Apples control over the market is rooted in government protected monopoly rights in the form of copyright and patents. Without those, there would be a competitive capitalist market of IOS compatible devices where applications could be offered through a variety of competitive app stores, and such fees would not be as easy for any company to levy.
One device, one store, one channel is more akin to something one might expect from a state controlled economy...
Link to their blog post (Score:5, Insightful)
https://www.iflowreader.com/Closing.aspx [iflowreader.com]
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."
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Re:Link to their blog post (Score:5, Insightful)
I don't understand why people find this so difficult: A walled garden can be an attractive place to run a business. The grass is clipped, most of the riff-raff gets stopped at the door, and all the happy little consumers and UUIDs and associated credit cards. However: In. A. Walled. Garden. You. Exist. At. The. Power. And. Mere. Pleasure. Of. The. Management. Period. Full Stop. Etc. If they think that their garden is more colorful with some 3rd parties selling peanuts on the sidewalk, such will be permitted to exist. If not, such will be removed.
Why would you ever "put your faith" in a self-interested, value-rational entity that has the power to unilaterally crush you like a bug? It isn't rocket surgery to work out that you will be permitted to exist so long as you are useful, and crushed immediately after. Why is this a surprise?
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Shouldn't that be, "Don't put all your business in one apple."
AppStore Business 101 (Score:2)
http://www.dilbert.com/strips/comic/2011-02-12/?CmtOrder=Rating&CmtDir=DESC [dilbert.com]
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Well, that's why you don't put all of your apples in one basket (pun intended).
Uh, it also doesn't help matters when you're staring at one basket, wondering where you're (not) going to put all your apples...
say no more (Score:3, Insightful)
"We bet everything on Apple and iOS and then Apple killed us by changing the rules in the middle of the game.â
I think I see your problem right there...
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Yup, pretty much. There's on important rule in business that most people learn very quickly: Don't compete with your supplier, don't compete with your channel. If you build your entire business around iOS, then you are selling software via a channel that is controlled entirely by a company that sells software. If they want to compete with you, they can easily shut you down.
Microsoft doesn't have control over the channel to the same extent, but they can easily bundle their version with Windows and push
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Just look at your own choice of words...
What "Apple's doing" versus what "MS is possible of doing".
Pie in the sky tinfoil conspiracy theories are less meaningful than what's actually being done.
Microsoft was unable to completely kill off alternative browsers because it's an open platform. They certainly tried but in the end, that last 1% of the market can still choose to use Opera or Netscape. That allows a kernel of competition to remain in place and later grow into something m
Darth Jobs sez (Score:5, Funny)
What are the phone alternatives? (Score:2, Interesting)
Apple is raping developers and Google is raping your privacy. Never thought I'd consider moving back to Windows Mobile :(
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Get a dumb phone. You probably managed just fine without a smartphone before they existed.
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I bet there are some developers now (and more in the future) who would oblige Jobs with an anger bang.
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I think you missed the point that the publishers get 30%, and now apple gets another 30%. With costs and salaries, it's not unthinkable that 40% isn't enough to make a profit.
Your poor business decisions are not Apple's fault (Score:5, Insightful)
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.
Re:Your poor business decisions are not Apple's fa (Score:5, Insightful)
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*...
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I don't think you can blame them for thinking that Apple would never go quite *that* far.
Uh, this is Apple we're talking about. Anyone who didn't think they'd go that far can't be paying too much attention
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You must sell books from major publishers at the same price as Apple does.
Which is entirely wrong.
You can't see books cheaper than Apple does, you can certainly charge MORE. This is a rather common thing in retail.
You are required to sell in app if you sell online and allow that to be downloaded too the app.
If you sell books on your own website (that you can get on your iOS device as well), then you have to charge the same price (or more) than it costs to get them on the iOS device. Basically you can't charge $200 for a book on the device, and $20 on your website as a way to sk
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From the application developer's blog here [iflowreader.com] discussing the issue, they say:
Is that even relevant? (Score:3)
The agency model was created by Apple who made it a requirement for any publisher who wished to sell books through Apple’s iBooks app.
This seems to be talking about agents selling books through iBooks. Where does it say that Apple made it a requirement for any developer who wants to sell books in their own iOS app to adopt the same model?
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Read the rest of the rules. The agreement is for publishers to get their books into iBooks, but it also puts stipulations on how publishers deal with other ebook retailers (or agents).
Re:Your poor business decisions are not Apple's fa (Score:5, Interesting)
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
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I believe major publishers have pricing agreements, fixing a minimum price for their books.
This is why some major titles are more expensive as an ebook than in paper format despite paper being obviously more expensive. I found this with a couple of minutes searching Amazon:
http://www.amazon.com/The-Devil-Wears-Prada-ebook/dp/B000FBFNBK/ [amazon.com]
$10.19 in paperback, $11.99 if you want the Kindle edition.
With publishers removing any opportunity to discount, it becomes nearly impossible to compete - especially if you h
Re:Your poor business decisions are not Apple's fa (Score:5, Insightful)
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.
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No one thinks its a bad for a start up company with limited resources to put all its eggs in the Microsoft Windows basket.
Microsoft can't demand you pay them 30% of your revenue if you want to sell stuff on Windows. They might buy you out or give away a competing product, but everyone who develops for Windows knows that.
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First off, grats on being the 50th person to make that obvious but not well thought out observation.
Secondly, it's completely wrong. Starting a business with a narrow focus is typically what you do and it's what is preached in schools. Find something that you think can make a profit, focus on it, and do it well. In this case they had something until Apple decided they wanted it.
You can't blame them for trying.
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30% kills them because they were already getting charged 30% by the publishers. RTFA.
Apple did this with PPC as well (Score:2, Informative)
Apple went out begging third party hardware developers to build to CHiRP (PReP) machines so it would run Mac OS8 and then reversed course denying them Mac OS-9 license. Some things never change with Apple. My first computer was an Apple ][+, I doubt I will ever own anything Apple related again.
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While what you state is more or less true ... they reversed the decision because new management came in and said 'holy fucking shit batman, if we keep this up we're going to be bankrupt in a year! This has to stop!' ... said management then proceeded to turn the company from a massive looser into a market dominating force.
Had they not changed their minds on that particular event, Apple wouldn't exist, which would have resulted in the EXACT SAME THING for those people making hardware to run System 8.
Sometim
Spinal Tap (Score:5, Funny)
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No, it's just that its appeal is becoming more selective.
Should blame both Apple and the publishers (Score:2, Insightful)
So their contracts with the publishers -and- the Apple cut didn't work. The Apple cut has been pretty well known. Seems to me that the contracts with the publishers are equally to blame here. After all, it costs a publisher NOTHING to release a digital version (there's no printing or physical distribution costs). The publisher should cut the digital distributor a substantial discount for that.
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The Apple cut has been pretty well known
No, the Apple cut was initially only for Apps, not for purchases within Apps before Apple changed the rules in February.
Your business plan is not my problem (Score:5, Insightful)
"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.
Re:Your business plan is not my problem (Score:4, Funny)
I have some buggy whip makers who want to talk with you.
Get with the times, We call them Adult Novelty & BDSM suppliers now.
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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.
I think you're losing something in your analogy. Perhaps what you meant in this case is that you have some buggy whip resellers who want to talk with them?
Contracts (Score:3)
So you get around things like this by signing contracts and service level agreements. If you don't have one of those or, more likely when dealing with Apple, you can't get one of those, then you probably shouldn't bother using their service, or at least be prepared when those goalposts move. Eggs in multiple baskets, the smallest fraction of those eggs in Apple, etc.
Get a lawyer, get it signed. This is business.
All he is doing is issuing a warning (Score:5, Insightful)
Nobody but Apple? (Score:2)
Really? Amazon is not profiting from the Kindle business or does not expect to be profitable in future? That is probably why they keep expanding it This story is stupid, and these people are just crying because THEY not ANYONE can't compete.
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Really? Amazon is not profiting from the Kindle business or does not expect to be profitable in future? That is probably why they keep expanding it This story is stupid, and these people are just crying because THEY not ANYONE can't compete.
Huh, why not read?
Apple has made it completely impossible for anyone but Apple to make a profit selling contemporary ebooks on any iOS device
The story is not stupid, you are stupid.
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amazon isn't paying a commission because you buy the books via a website outside the app
same here, they need to just enable people to buy outside the app and have it sync like the kindle app. it was kind of unfair that game devs and others with in app purchases had to pay apple the commission but not the book resellers
He said it himself (Score:2)
We bet everything on Apple [...]
If you didn't see this coming then you shouldn't be in business. Apple charges a premium when you buy from them, and they charge a percentage when you sell through them. If they dont take a commission it just means they're waiting for you to create a market for it before taking their cut.
You get what you deserve, as they say. (Score:3, Insightful)
Seriously, building an entire business around one iPhone/iPad app and in app sales of content that can be had anywhere? You pretty much were doomed to fail from the start before Apple changed the rules.
You are also an idiot for NOT expecting Apple to make that change. Why on Earth would Apple leave a blindingly large loophole in the system that allowed you to sell services which funnel through Apple and as such require Apple to support them (which costs money) and without you making any contribution to the system? If you thought at any point Apple was going to let you charge for in app purchases without ever taking a cut, you're an idiot. Theres no other way to state it, you're simply too stupid to run a business on that alone.
Finally, the most important thing to point out here ...
If you've made all that investment and got a bunch of software, hardware, and book licenses ... WHY ARE YOU NOT SELLING BOOKS FOR ANDROID, BLACKBERRY AND WINDOWS MOBILE/PHONE?!
Yes, caps were required, because thats the obvious thing to do, and once again, you're a complete fucking moron for not doing it.
Instead you said 'OMG WE FAILED BECAUSE OF APPLE!!!'. If you take off the word because, and everything after it, the sentence is true.
You failed, and you did it to yourself. Go back to sucking on mommies teet for safety, you don't belong in the business world, no one is going to carry your weight for you.
What margin do book publishers take? (Score:3, Interesting)
From what I gather it is at MOST 15% of the NET profits, so a $25.00 book may only make you as a writer $2 at most after all the "Costs" of selling are added up.
So, if you sell the book yourself through Apple, you get to keep 70% of your profit, doing some simple math that turns out to be $17.50.
Now who is the evil company, publishers who give you $2 on your $25 book or Apple who gives you $17.50?
The Apple Advantage (Score:5, Insightful)
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.
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And after Apple has put it's competitors out of business is can pick and choose from all the "failed" apps that are better than theirs, buy them at a cut rate, and re-release them as Apple software... sounds like almost free R&D for Apple. Why write good software when you can let other folks do it, then crush them and take it.
I find it amusing. (Score:2)
First all media companies hype Apple ipads and ignore everything else in their reporting, hoping to finally lock in the user and get their piece of the cake without directly telling the user how much money they want, and completely forget how Apple fucks the users, and the the very same companies suddenly discover that Apple wants a larger piece of the cake.
Yes, dear Journalists, publishers etc. If you let yourself lock in to a single platform which sometimes is incompatible by definition to the knees of a
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iPads read ePubs, and the iBookstore format is ePub. Nothing stops people from selling ePubs to users, including iPad users on the web (e.g., look at O'Reilly). This guy locked himself in because he didn't doesn't actually have a real business - he wants to be an alternate middleman where Apple carries all of his costs.
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Not quite.
ePub isn't just a bare open format. It's also a vehicle for DRM. Once you introduce this DRM, then you need a special decoder. That special decoder then needs to be available to the customer. At that point, you have to worry about Apple as a gatekeeper.
The idea of selling stuff directly to the customer only works so long as it's in a format that Apple already can deal with.
Even THAT is entirely dependent on Apple and could change at any moment.
Missing the point (Score:5, Informative)
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.
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No, Apple's policies are biased against middlemen, not content creators. This guy didn't really have a real idea, let alone a brilliant one, and therefore failed.
Real developers seem to be doing just fine.
sounds like tortuous interference (Score:3)
Here's what I don't get about this: Apple is telling ebook retailers that they have to buy from publishers at a fixed margin. How is the margin of a given ebook publisher any of Apple's business? Apple is basically forcing two other entities to modify or annul the contract they already had, and/or is actively preventing them from agreeing to a future contract that doesn't fit Apple's requirements. How is this not a textbook definition of tortuous interference?
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Apple is telling ebook retailers that they have to buy from publishers at a fixed margin.
Apple is doing no such thing, thats simply FUD being spread by the man with a failed business plan. Apple has nothing to do with your relationship between you and your content licensors.
It doesn't seem to be Apple's fault (Score:5, Informative)
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.
How does Apple force it? (Score:2)
I don't have an Iphone or an Ipad. How is Apple forcing this particular business to give them money? Refusing to host the app on their marketplace? Or threatening to remove the app from devices? Or terms and conditions of being a developer? What arm is Apple twisting that says "give me your money or die"?
I love that quote (Score:3)
Paraphrased: "We bet everything on one single trendy niche product among many, which is linked to one single trendy content sales channel, both of which happen to be tightly controlled by another party whose interests conflict with ours, and somehow it didn't work out for us."
If it makes you feel any better, that particular manufacturer probably isn't going to have lasting, long-term dominance (but if they stay on the ball (and I think they will), they'll be a player you can't quite totally ignore), so it's pretty silly to say they've ruined the ebook business. You'll face other challenges later, so the general lesson you should take from this ephemeral phenomenon is: don't be anyone's bitch. And face it, you did decide to be someone's bitch.
Two bad reviews on App Store (Score:5, Interesting)
Their app only has two reviews, and both of them are bad. Maybe they were going to fail anyway.
Capitalism is great....for some (Score:4, Insightful)
There was a time when one could dream of starting a small niche business and if done right, grow it into a large and successful company.
Those days are long gone. The dream today is more along the lines of "start a small business and hope to
A. eek out enough profit to keep the doors open, or
B. (if you're lucky), get bought out by a bigger company".
While starting any kind of business is a bit of a crap-shoot, the odds used to be good enough to at least encourage people to try.
I've been around long enough that none of this comes as a surprise, but what still irritates me is that people, for the most part, are OK with this. It's just business.
Well, that's all fine and good, and one day we can all thank our Wal-Mart overlords for allowing us to buy their products at whatever price they want to charge while paying us the minimum amount they can get away with.
I just wonder, how long do you folks that think unbridled capitalism will last? Marx predicted that Capitalism can't last because it will basically keep eating it's young, with the wealth and power continually becoming concentrated among so few that eventually the populace would revolt.
Personally, I would rather see some checks put on capitalism rather than see it fail and be overtaken by some form of communism, but I guess the pure capitalists won't believe this will happen until it's too late. What a shame.
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Microsoft was founded in 1975 by two guys. Apple was founded in 1976 by two guys. Adobe was founded in 1982 by two guys. Red Hat was founded by two guys in 1993. Amazon was founded in 1994 by one guy. Yahoo! was founded by two guys in 1995. Google was founded in 1997 by two guys.
Some of the founders may not have been poor at the time, but I'm not aware of them being already
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Capitalism (at least in the US) works great for big guys... not so much for entrepreneurs.
There was a time when one could dream of starting a small niche business and if done right, grow it into a large and successful company.
Those days are long gone.
Silicon Valley says "Hi! You're wrong!" And continues to do so every day.
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Then change your pricing structure, QED.
I believe Apple gives 70% royalties to anyone selling ebooks through their service. So if anyone selling ebooks through apps has to pay 30% to Apple, there's no way they can compete unless they can get writers to accept lower royalties than they would get by selling direct through Apple.
Which is possible: trade publishers have been giving 15% royalties to writers while collecting 70% from Amazon, but they need to provide something that makes writers think that giving away lots of money is worthwhile (trade
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They can't raise prices to compensate, Apple will then demand 30% of the new price as will the publishers.
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They can just stop selling in-app. Make people buy through the web site, the kindle/nook devices, and desktop apps only. They can keep their higher commission, and people are only inconvenienced for a while. They can still set it up so you can browse books in-app - just link them to the web site to complete the purchase. What's so hard about this? The books still sync to the app when purchased outside the app now.
Re:"Who Moved My Cheese?" (Score:5, Insightful)
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Apple is your mom when they tell you how to develop an application, distribute it and how much you can charge for it (oh and btw - it will cost more than Apple's offerings because you have to give 30% to them) plus how much you can charge for content on it (again - another 30%).
If they change the rules - your out of the house.
Apple is worse than your mother - Apple is like some sort of crime lord.
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$17 via iBooks? Yeah right!
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That iPad thing may change soon, when the new rules come into effect in June/July, the Kindle app will no longer be allowed to link to the Kindle store for purchases.
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Remains to be seen. Many think the Kindle app may somehow end up with an exclusion from the rule.
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But...according to the Washington Post, there is an "e-book gold rush" going on right now.
Which is why a distributor like Apple wouldn't want apps to be able to compete with them by offering higher royalties. If a company offers writers 80% royalties selling through their app while Apple only offers 70% selling through their store, then writers won't be using Apple's store.
This should have been pretty obvious to anyone with any business sense.
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The people who got rich from the gold rush weren't the prospectors, but those selling goods to the prospectors. Plus ça change...
Re:The answer is obvious (Score:4, Informative)
I probably shouldn't respond to somebody who's handle is 'countertrolling', but...
If you've read any of the information on this subject, you'd know that the contract with Apple requires that you price eBooks the same as what Apple sells them for. So raising the price is not an option.
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What are we, 5 years old? Don't blame Apple for the failure of your business. Don't like the iBookstore rules? Publish your eBooks on Android instead. Or publish on your own & other web sites in PDF or ePub formats. There are tons of alternatives.
That argument would make sense, provided Apple didn't change the rules in the middle of the game. This company started up before these rules. They were fine under the old rules. They invested time and money under the old rules. Then Apple changes the rules, effectively making Apple the only company capable of turning a profit on ebooks.
Absolutely blame Apple.
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...you must pay the gatekeeper.
My sympathy is limited. What the hell did they expect?
The problem is when the gatekeeper decides to enter the selling ebooks market, and they impose a fee AND they tell you how much you can sell ebooks for. At that point, Apple is no longer a simple gatekeeper.