Apple’s E-Book Policy Claims an Early Victim

By  |  Wednesday, May 11, 2011 at 6:40 pm

In a venomous blog post, a startup called BeamItDown Software says it’s going out of business, and squares the blame entirely on Apple’s in-app purchase policy.

BeamItDown’s iFlow Reader, a digital reading app for iOS, relied on e-book sales for revenue. But because Apple takes a 30 percent cut of anything purchased within an app, and e-book publishers only give 30 percent their revenue to the book seller, iFlow Reader would actually lose money on every book sold.

“We put our faith in Apple and they screwed us,” BeamItDown’s blog post says.

BeamItDown may not be the last victim, either, because the policy that caused this small company to go out of business may soon be unavoidable for major e-book players like Barnes & Noble and Amazon.

It’s no secret that Apple takes a 30 percent cut of all in-app purchases, but as of now, big e-book sellers sneak around the rule by launching their book stores through the Safari browser and billing customers directly.

Back in February, Apple made it clear that this workaround is not allowed. “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 with in-app purchase,” spokeswoman Trudy Miller told All Things Digital. In other words, Amazon will have to create a bookstore within the Kindle app, opening the door to a 30 percent cut for Apple.

For now, Amazon and Barnes & Noble continue to sell books through the web, but BeamItDown’s Phil Huber thinks this won’t last. In an e-mail, he said app makers will have to comply with Apple’s new guidelines by June 30, the same date that Apple’s in-app subscription policy goes into effect. I can’t confirm this, but it seems plausible.

At that point, E-book sellers have a few choices: walk out of the App Store, hope for special treatment or suck up the iOS losses and make money on other platforms. If you own a lot of Kindle or Nook books, mark the date.


Read more: , , , ,

17 Comments For This Post

  1. @ymala1 Says:

    Man, that is rough… reading through the post at the source link made me feel bad for those guys. Douche move Apple.

  2. Muay Thai Says:

    Yea, too bad for them. Muay Thai Combinations | Muay Thai Kick | Martial Arts for Children

  3. Reynaldo Rivera Says:

    ….. Dev for Android, QNX, WebOS, or WP7.

    Let Apple be the popular kid, but sell your stuff on other platforms. If you help make other app stores competitive with your quality apps you'll give people more reasons to switch when they get bored of their iOS device.

    You can even offer a steep discount for people who already bought your app in iOS and want to transfer them over. It's something to consider.

  4. David Says:

    Does Apple's policy actually prevent me buying a book for my Kindle and then having it also delivered to the Kindle App on my iPhone? Or just buying it on Amazon's website and having it delivered to the Kindle App?

  5. @myebookguide Says:

    It is the ebook buyer that benefits from this development
    Apple policy forces IFlowReader closure, more to follow

  6. Wally SirFatty Says:

    Well, if your business model is built on the back of another company that ultimately competes with you…

  7. David Says:

    God, "Boo-hoo!" Apple is exterting control over the platform they created. First, if you don't like it walk. Second, build your own platform.

    Third, it seems to me that if you want to blame somone, blame the publishers for accepting Apple's terms.

    If your services is so innovative, raise your prices. Oops, you can't because "These publishers account for nearly 90% of all ebooks sold. Random House was the last publisher to adopt the agency model, which they did on March 1 of this year. You may have noticed that all 17,000 Random House titles disappeared from our catalog on February 28. They appeared in Apple's iBooks catalog the following day. We, as well as all other small booksellers, have yet to complete an agency agreement with Random House"

    Sounds like your problem is what Random House. Where is your "Random House screwed us." post?

    Look, I'm a developer, who currently works in Java. I've started learning iOS development. Do you hear me complaining that I have to learn Objective-C? Or buy a Mac? or do it on my own time? Nope.

    That's life in the "Try to Capitalize on iOS Coattails" Market. Terms change. Policies change. APIs change. That's the way it is.

    Adapt or Die.

    Heck, Oracle now owns Java and the first thing they did is what Oracle does: Start charging for whatever they can. In this case, certifications. I don't like certs anyway. My solution: screw 'em! The day I lose out because I don't have a cert is the day I'll pay their pirate prices.

  8. @hurtle24 Says:

    A middleman selling through another middleman, what could possibly go wrong?

  9. jltnol Says:

    30% does seem exorbitant… for doing nothing. Apple's iOS devices are nothing w/o developers… and if you keep pissing them off with outrageous fees that prevent them from making money themselves…. what do you have left?

  10. David Says:

    Sure. Apple only builds the devices, the platform, the payment system, the advertising. I mean anyone and everyone can do that.

  11. Celticsailor Says:

    Another example of why Apple was/is so behind PC's in use. I have watched Apple do this since I first used an Apple IIe in 79/80 in school. They continue to make business choices that restrict their consumers. Apple whines that Microsoft dominates the market, yet continues to micromanage and restrict their own products. You would think they would learn.

  12. David Says:

    How does Apple whine about the PC market. They make the most money selling PCs.

  13. moshe Says:

    Develop for the Android platform! It is going to own the smartphone world anyway if it doesn't already. The HTC Thunderbolt 4G rocks and I can get any app i want, most of them for free or for a minimal payment. go Android!

  14. David Says:

    A phone so good that it is outsold by the 3GS.

  15. Hamranhansenhansen Says:

    Total BS. Apple did not kill them, the new and constantly changing eBook business did. Lots of others will get in and get out before things settle down.

    This guy actually sounds tinfoil-hat when he accuses a $300 billion worldwide company with 50,000 employees of coming after him. As if.

    This reminds me of a rant I read where the guy accused Apple of killing the CD. The CD was killed by the Internet, not Apple. All Apple did was adapt faster, just like they are doing now with eBooks.

  16. webwarmiller Says:

    I think Microsoft needs to send a letter to Apple stating that from this point forward all purchases made in iTunes running on a Microsoft OS must go through Microsoft's payment system giving MS a 30% cut. I'm sure Apple wouldn't have a problem with this seeing as it's exactly what they are requiring apps running on iOS to do.

  17. Yahya Says:

    I visited this page first time and found it Very Good Job of acknowledgment and a marvelous source of info………Thanks Admin! Phone Lookup Reverse Phone Lookup