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Developer Blames Apple For Ruining eBook Business 660

Posted by CmdrTaco
from the start-pointing-fingers dept.
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."
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Developer Blames Apple For Ruining eBook Business

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  • say no more (Score:3, Insightful)

    by Anonymous Coward on Wednesday May 11, 2011 @10:04AM (#36094014)

    "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...

  • by The Living Fractal (162153) <banantarr@nOSpaM.hotmail.com> on Wednesday May 11, 2011 @10:04AM (#36094018) Homepage
    Dear Developer: Get it, read it. Stop being Hem and start being Haw. Apple is a company, not your mom.
  • 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:Business 101 (Score:2, Insightful)

    by 0100010001010011 (652467) on Wednesday May 11, 2011 @10:08AM (#36094086)

    Smells like capitalism to me.
    Your business failed.
    C'est la vie.

  • by david.emery (127135) on Wednesday May 11, 2011 @10:12AM (#36094154)

    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.

  • by Timmmm (636430) on Wednesday May 11, 2011 @10:12AM (#36094162)

    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*...

  • by mcmonkey (96054) on Wednesday May 11, 2011 @10:13AM (#36094170) Homepage

    "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.

  • by recoiledsnake (879048) on Wednesday May 11, 2011 @10:13AM (#36094172)

    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."

  • by LizardKing (5245) on Wednesday May 11, 2011 @10:14AM (#36094190)
    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?).
  • by Attila Dimedici (1036002) on Wednesday May 11, 2011 @10:16AM (#36094220)
    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.
  • by BitZtream (692029) on Wednesday May 11, 2011 @10:18AM (#36094266)

    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.

  • Re:Business 101 (Score:5, Insightful)

    by jdgeorge (18767) on Wednesday May 11, 2011 @10:20AM (#36094286)

    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.

  • by Bobfrankly1 (1043848) on Wednesday May 11, 2011 @10:22AM (#36094308)
    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.
  • Re:Business 101 (Score:2, Insightful)

    by camcorder (759720) on Wednesday May 11, 2011 @10:29AM (#36094394)
    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.
  • Re:Business 101 (Score:5, Insightful)

    by Bobfrankly1 (1043848) on Wednesday May 11, 2011 @10:30AM (#36094408)

    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.

  • by brainzach (2032950) on Wednesday May 11, 2011 @10:34AM (#36094462)

    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.

  • Re:Business 101 (Score:2, Insightful)

    by cpu6502 (1960974) on Wednesday May 11, 2011 @10:40AM (#36094542)

    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

  • by fuzzyfuzzyfungus (1223518) on Wednesday May 11, 2011 @10:42AM (#36094570) Journal
    "We put our faith in Apple and they screwed us."

    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?
  • by vijayiyer (728590) on Wednesday May 11, 2011 @10:44AM (#36094586)

    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.

  • Re:Business 101 (Score:5, Insightful)

    by Sepodati (746220) on Wednesday May 11, 2011 @10:44AM (#36094608) Homepage

    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:2, Insightful)

    by WorBlux (1751716) on Wednesday May 11, 2011 @10:49AM (#36094696)
    Not just wal-mart, but an evil wall mart. If walmart doesn't want to sell yeast, they don't prevent me from buying yeast from a third party. Apple has DRM'ed thier platform so that it is forboden to load apps except through a store they controll.
  • by mswhippingboy (754599) on Wednesday May 11, 2011 @10:54AM (#36094772)
    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. 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.

  • Re:Business 101 (Score:4, Insightful)

    by somersault (912633) on Wednesday May 11, 2011 @11:02AM (#36094890) Homepage Journal

    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.

  • Re:Business 101 (Score:2, Insightful)

    by 0123456 (636235) on Wednesday May 11, 2011 @11:03AM (#36094918)

    If walmart doesn't want to sell yeast, they don't prevent me from buying yeast from a third party.

    They prevent you from buying third party yeast _IN WALMART_.

    You're still free to buy this app, then buy ebooks and load them into the app. Of course ebook readers are pretty much identical, so there's really no market for selling one.

  • Re:Business 101 (Score:5, Insightful)

    by Kreigaffe (765218) on Wednesday May 11, 2011 @11:10AM (#36095038)

    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!

  • by Anonymous Coward on Wednesday May 11, 2011 @11:29AM (#36095348)

    "We put our faith in Apple and they screwed us"

    Poor them, but this statement shows exactly why they failed:

    1. You don't do business just based on putting faith in someone. You do by putting down agreements in a contract.

    2. If Apple didn't agree to anything on paper, don't whine. Was Apple even aware of their efforts?

    3. If you start a startup based merely on good faith, you accept the risk and try to keep that risk/cost to a bare minimum.

    4. In just a year and a half, these five people spent over a million in cash to write some software- that's 200k a head.

    I'm sorry but to me that sounds like they've been living the good life, rather than to keep risks at bay.

    Face it, iFlow. You've not been screwed by Apple but by yourselves.

  • Re:Business 101 (Score:5, Insightful)

    by Sepodati (746220) on Wednesday May 11, 2011 @11:44AM (#36095548) Homepage

    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).

  • Re:Business 101 (Score:2, Insightful)

    by macs4all (973270) on Wednesday May 11, 2011 @12:09PM (#36095892)

    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.

    First, Apple has been a publicly-traded company for HOW many years? They have a duty to stockholders to maximize profits. Simple business realities. And, I suppose that MS, Google, Amazon, et al, are completely altruistic corporations, who, like Newman's Own, have a business model that is predicated upon being a NON-PROFIT corporation. Gimme a break!

    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!

    What licensing fees were those? You mean the ones like everyone has if you use a logo or trademark; or the petty $500/yr to become a Registered Developer; which not only entitled you to "free" Macintosh Workbench software development/debugging tools (which are now REALLY free, except for iOS), but also entitled you to monthly/quarterly CDs (remember, this was before broadband was ubiquitous) that had lotsa developer goodies?

    And you could even eschew all that, and just buy a copy of CodeWarrior (until Motorola bought it destroyed it!), and just start writing stuff yourself. There was NOTHING that stopped someone from developing and selling Apple ][ or Macintosh apps for whatever he wanted. Nothing.

    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.

    On this, we agree completely.

    It's not like Apple has ever, ever, EVER turned a new leaf. This has been how Apple operates for DECADES.

    How is that, again?

    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!

    So, I guess giving out the free XCode IDE, free TONS of documentation, examples, tutorials, etc. just doesn't count? You are not only an idiot; but a demonstrable idiot. And all of that is available under a FREE (unlike back in the Macintosh Workbench days) OS X software development license. Yes, there are two other "tiers" of Software Developer licenses that are not free; and the iOS developer license costs a "whopping" $99; but, please!

  • Re:Business 101 (Score:3, Insightful)

    by not-my-real-name (193518) on Wednesday May 11, 2011 @01:13PM (#36096844) Homepage

    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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