Remember back in February when Apple rejected Sony’s ebook app? I haven’t heard much about this recently. And after googling and reading for a few hours, I haven’t found any significant recent news.

Apple is still blocking Sony’s app. Sony has since threatened to pull their music from iTunes (that would include Madonna, Michael Jackson, and Bob Dylan, among others) and Sony appears to be moving toward options that will allow them to do that. Some have speculated that Sony’s app was rejected because they tried to offer their own in-app purchasing method (i.e. one that did not give Apple a cut and may have had other security issues), but I can’t confirm that as a fact, and from all I can find this seems to be false. I found one of the first blogs that first brought up this theory, and I think that blog post misunderstood the other two blogs that it linked to to back up this claim. For example, read the “Update” part of this blog (Sony’s rejected app sounds just like other ebook apps). And Apple’s own statements sound different:

“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.”

Apple isn’t talking about Sony offering their own in-app purchasing method. Apple is talking about wanting Sony to offer a way for people to buy Sony ebooks through the Sony ebook app, which would give Apple a 30% cut of those sales. Also known as $$$.

If this policy were applied to, say, Amazon, this could potentially make it impossible to access your kindle books through Apple apps, if Amazon doesn’t change its apps to allow for in-app purchases. Which, of course, Amazon wouldn’t want to do because that would mean paying Apple 30% on those sales and Apple already pays independent authors 70% in many, if not most, cases. The same could be said for Barnes and Noble/Nook, Kobo, etc., with slightly different royalty figures. But Apple hasn’t forced this issue yet, and they might not ever force the issue on any other company besides Sony.

Unless I’m missing something, Apple is preventing Sony from being able to do something that Apple continues to allow Amazon and B&N (and other companies) to do. That is, sell ebooks through an app for iPads and iPhones by taking customers to a web browser to make those purchases (without also having an in-app purchase option). Apple says it is going to start to enforce its written policy, thereby forcing apps to also offer the option to purchase ebooks through the actual apps, where Apple takes 30% of those transactions. But it hasn’t forced Amazon or Barnes and Noble or Kobo to do that yet.

iConfused.

For now, it looks like Apple has fired only on Sony, leaving Amazon and B&N to wonder if they’re going to be shot at next. But before you worry too much, I think there’s a good chance that Apple won’t fire the same cannons on Amazon and B&N, because that fight would get really ugly and it could also get Apple into some serious antitrust issues.

Let’s hope Apple doesn’t push the issue any further, because could mean more restricted access to ebooks for Apple customers and lower royalties for authors.

By the way, if you know anything else about what’s going on with this issue, please feel free to mention it in the comments. I feel like I have a decent grasp on what’s going on now, but it hasn’t been easy to sort out all the facts from the fiction. Speaking of which, I need to go write some fiction.

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29 comments so far

 1 

I’ve been watching this issue as well. I am, for the most part, an Apple fan, but I think the in app purchasing option is just being greedy. I know, they argue they are improving customer service by allowing a customer to use a single iTunes account to purchase everything. While that’s nice, this is mostly about $. Money from the 30% take and money from selling more ebooks themselves if Amazon and B&N pull out.

April 15th, 2011 at 9:23 am
Moses Siregar III
 2 

Hopefully it won’t go much further. I think it’s probably in Apple’s best interest to just let this slide.

April 15th, 2011 at 11:30 am
 3 

Apple can’t let it slide. They take a slice on all in app purchases from games, etc. They argue that this is no different, and that they allow book app publishers to promote out of app sales as long as the publishers also offer in app sales. Apple sees these book sales as no different than taking a slice of in app purchases from that Smurf game.

The difference is that Apple has taken a slice from in app purchases from the beginning, rolling that profit sharing into the launch. Book apps have been directing customers outside their app for a few years now. This is a big change for them, though I can see Apple’s side, too. It would be nice as a customer to be able to buy books for Kindle for iPad in app as I can with my physical Kindle.
Douglas Cootey recently posted..Distraction Tastes Delicious or How I celebrated National Licorice Day

April 15th, 2011 at 5:02 pm
Moses Siregar III
 4 

Apple has been letting it slide with the kindle app, nook app, and kobo app, all along, though. I think they can let it slide because they’re in the business of selling ipads and iphones. Being able to read from your kindle or nook library on your iPad or iPhone is a great selling point for the hardware.

The companies who can’t let this slide are Amazon, B&N, etc. They can’t afford to pay Apple 30% on a product where they pay authors 70% (that leaves them with nothing).

April 15th, 2011 at 5:22 pm
 5 

There’s a lot of confusion over this whole thing, mostly spawned by Sony trying to make trouble for Apple and spewing misinformation as broadly as possible to give them leverage in the public eye. Here’s the scoop:

– Sony (and other companies, like B&N and Amazon) had apps up on the Apple app store which allow users to read their books, and open a browser window to buy books from their own websites. Apple has always allowed this. Antitrust law probably requires this.

– Sony attempted to insert a new app which did not open a browser window. Instead, customers could buy Sony books inside the app itself. This is a critical difference – because the extra step of opening a website, browsing the site, and buying a book is just a bit harder than buying in-app. Allowing Sony to do this would remove one of the iBookstore’s main competitive advantages.

– Apple said no, and pulled the new Sony app.

– Sony cried foul.

– Unfortunately for Apple, this happened at the same time Apple was saying that magazine vendors who wanted to sell magazine apps on the iPad store would have to pay 30% of the subscription fees to Apple. This is not unusual – in fact, Amazon is doing the same thing. The timing was bad, though, because the media (specifically, a couple of NYT reporters) confused the two issues, and Sony encouraged the confusion.

– In short, Apple has not ever said other vendors could not have reader apps that sell books externally. Apple has only said that the apps could not sell books (or anything else) *internally*, within the app, unless they gave Apple 30%. The idea that they said otherwise was a misunderstanding by some major media folks and Sony trying to play up the issue get bad PR for Apple.

The reason no one is talking about it anymore is because there is no issue, never was an issue, and probably *can’t* be an issue. Not only would Apple need to worry about antitrust, but they would have to worry about literally tens of millions of their iphone/ipad users who have bought Kindle books and who might be *very* unamused to be suddenly told they had to swap to the Apple bookstore if they wanted to keep reading on Apple devices.
Kevin O. McLaughlin recently posted..Are publishers under-reporting ebook sales to authors

April 19th, 2011 at 12:27 am
Moses Siregar III
 6 

Kevin said: “- Sony attempted to insert a new app which did not open a browser window. Instead, customers could buy Sony books inside the app itself. This is a critical difference – because the extra step of opening a website, browsing the site, and buying a book is just a bit harder than buying in-app. Allowing Sony to do this would remove one of the iBookstore’s main competitive advantages.”

Kevin, this is one of the main things I tried to research. So far as I can tell, this isn’t the case. I found a website/blog or two that suggested this, but neither of them seemed to have any proof of it, and what proof they did offer in the form of links did not back up what they said.

Maybe I just couldn’t find the evidence of it, but I couldn’t find any blogs that had actual evidence of it either.

If this is true, do you have a good source on the information that you can share? It may be true, but nothing I’ve seen so far confirms this. What I did find was a trail of blogs who essentially played the telephone game with this story, and they seemed to be unintentionally making some things up.

There’s another point of yours I want to respond to also. In a sec …

April 19th, 2011 at 10:02 am
Moses Siregar III
 7 

Kevin said: “… Apple has only said that the apps could not sell books (or anything else) *internally*, within the app, unless they gave Apple 30%. The idea that they said otherwise was a misunderstanding by some major media folks and Sony trying to play up the issue get bad PR for Apple.”

I don’t think this is right. Apple specifically said this (this quote is in my blog post above):

“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.”

I think there’s a key difference between what you said and what Apple said. After this Sony flap, they made a point about requiring there to be an in-app purchase option. This issue wasn’t stated by Apple as being about how the in-app purchase works (though I’m sure they want the in-app purchases to go through them to get the 30%); Apple stated the issue as simply that there has to be an in-app purchase option (which of course would need to go through them so they get their 30%).

If Apple actually applied that rule to Amazon, Barnes and Noble, Kobo, etc., (as they seem to be applying it to Sony) those companies would take a huge hit in terms of ebook revenue and it could change the lanscape of ebook royalties.

April 19th, 2011 at 10:05 am
 8 

Actually, what Apple said was:
“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” said Steve Jobs, Apple’s CEO. “All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.”

My understanding – and I could be wrong here, but this is what I’ve seen from several sources – is that what happened was several media folks took that blurb out of context, put it together with the Sony app refusal (which happened about the same time) and made connections which didn’t exist.

I’ve read reports that Sony was attempting to fuel the fires as much as possible without actually resorting to libel, which didn’t help, either. 😉

http://www.apple.com/pr/library/2011/02/15appstore.html
Kevin O. McLaughlin recently posted..Are publishers under-reporting ebook sales to authors

April 19th, 2011 at 11:17 am
 9 

Also, from the Apple developer contract:
“3.3.17 Only Paid Applications (which require You to enter into a separate agreement
with Apple (Schedule 2)) may use the In App Purchase API”

I don’t have a copy of Schedule 2 (still looking about), but the rest of the contract is available here:
http://www.eff.org/files/20100302_iphone_dev_agr.pdf
Kevin O. McLaughlin recently posted..Are publishers under-reporting ebook sales to authors

April 19th, 2011 at 11:30 am
 10 

I am finding myself not especially interested in wrangling the legalese on this contract. 😉 Maybe I’ll do it later. But I found Schedule 2, so I thought I’d give a link so others could have the complete contract available:
http://www.docstoc.com/docs/5066580/iPhone-app-contract
Kevin O. McLaughlin recently posted..Are publishers under-reporting ebook sales to authors

April 19th, 2011 at 11:38 am
Moses Siregar III
 11 

Thanks for digging around, Kevin. Sadly enough, I spent a few hours trying to research all of this before I wrote this post and for now I have to go with what I wrote above.

There’s also been some confusion about whether Apple’s subscription sales policy (like the one you quoted in post #7) has anything to do with ebook sales, and some have argued that it might because the language talks about subscriptions or “content.” But most seem to think the legal language around subscriptions won’t apply to ebook sales.

However, that quote I gave from Apple was directly in response to the Sony flap. That suggests that Apple denied Sony’s ebook app because Sony was trying to sell ebooks outside of their app (like everyone else does) without having an in-app purchase option (which none of the other big ebook sellers have).

So for now the best evidence I’ve seen is that Apple is just punishing Sony for what Amazon, B&N, and Kobo already do–not because Sony did something very different with in-app purchases. I could be wrong, but that’s based on the best info I have right now.

April 19th, 2011 at 12:14 pm
Moses Siregar III
 12 

And yeah, this article confirms what I’ve said:

http://reviews.cnet.com/8301-18438_7-20062030-82.html

“We get nothing. I mean, it’s amazing. Apple is the worst company in the world to do business with. It’s breathtaking.”

May 15th, 2011 at 11:01 pm
 13 

And…. I’m still not sure he’s right, although he’s making a lot of noise about it.

#1 He has already declared his business closed, when we’re a month and a half from Apple initiating this change. If they still do. Protest it? Sure. But I have read about iFlow before, and…what they’re doing shows no business sense.

#2, the sections he quoted? He is misreading them. Or he’s not thinking.

“Apps that link to external mechanisms for purchasing content to be used in the app, such as a “buy” button that goes to a web site to purchase a digital book, will be rejected”

Well, yes. So don’t have the app have buttons to press for buying. Have the app automatically download your books from your account. Have customer use web browser to buy book from your store. Like, oh, Amazon and B&N are doing. 😉

“Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.”

What about an app which is JUST a music player? It’s in violation. Or just an ereader with no store? It’s in violation. Get the idea? The way this clause reads, ANY app which plays ANY sort of media without offering EVERY bit of media it can see/read/play in the app is in violation. So that includes all music players, all movie players, every word processor, every ereader app, etc. Pretty much anything that reads media can be banned by this. It’s a blanket clause, enabling Apple to bar whomever they want.

It remains to be seen what they will actually do, however. All they have announced, so far, is that apps with in-app purchases will be subject to the 30% fee; and apps which allow people to subscribe to things will get a 30% fee. Nothing else.
Kevin O. McLaughlin recently posted..Begun- the publishing war has…

May 16th, 2011 at 6:16 pm
 14 

Amazon is exempt because ebooks purchased aren’t subscriptions. Netflix is exempt because they aren’t publishers. (Both would likely end up exempt from backroom deals or just because Apple needs them onboard.)

What Steve Jobs himself said: “We created subscriptions for publishing apps, not SaaS apps.”
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May 16th, 2011 at 6:49 pm
Moses Siregar III
 15 

However, David, Apple applied these rules to Sony’s ebook-selling app. So if they’re consistent, then those rules should apply to Amazon and B&N also (not just subscriptions). And the link I gave yesterday indicates, if anything, that this continues to be a potential issue for ebook sellers. I guess we’ll know more after June 30th.

May 16th, 2011 at 7:46 pm
Moses Siregar III
 16 

For anyone who’s following along, here’s that link to Apple’s official app store guidelines:

https://www.cs76.net/images/5/54/IOSAppStoreGuidelines.pdf

Here are the two relevant sections:

11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video)
that is sold outside of the app, for which Apple will not receive any portion of the revenues,
provided that the same content is also offered in the app using IAP at the same price or less
than it is offered outside the app. This applies to both purchased content and subscriptions.

11.14 Apps that link to external mechanisms for purchasing content to be used in the app, such as a
“buy” button that goes to a web site to purchase a digital book, will be rejected.

The second paragraph would clearly reject Amazon’s and B&N’s current apps because they take customers outside of the app to make a purchase. Based on all the best evidence I’ve seen, this appears to be why Sony’s app was rejected. Apple selectively rejected Sony’s app for doing what Amazon’s and B&N’s apps already do.

We also have this specific comment from Apple on ebook sales:

“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.”

So will Apple force Amazon and B&N to conform to their rules come June 30th? Will they work something out, even though Apple denied Sony access for trying to do this same thing? If they can’t work something out, what will happen?

I would imagine that if Amazon and B&N just didn’t budge on the issue and dared Apple to “make their day,” Apple would blink. But then other ebook sellers (including Sony and the guy from iFlow) would still be hurt.

May 16th, 2011 at 9:29 pm
 17 

To clarify – Sony’s new app was rejected because it allowed *in-app* purchases without giving Apple a cut.

Amazon and B&N apps, if I have read correctly (I don’t own an ipad), do *not* have a “buy” button in them. Again, if I’ve heard this right, they have a “Shop In Store” button which opens the iOS web browser and points it at the Kindle store. It’s not quite the same thing, because it’s not sending the reader to go buy a specific item. It’s just opening the web browser to the front page of the store.

*Could* Apple bar Amazon and B&N? Yes, via their rule 11.13 if nothing else. Have they said they will? No. They have made no announcement to that effect so far. The June 30th date applies only to subscription services.

Here’s the only Apple press release on the subject:
http://www.apple.com/pr/library/2011/02/15appstore.html

The fact checking aspects aside, there’s also logic involved. 😉 About 3/4 of the folks reading books on iOS devices are using Kindle software, according to a November survey. Those numbers may have dipped a bit, but it is very likely that Kindle is still the dominant reading service for iOS toys.

The data I’ve seen implies at least 10 million iOS users reading with Kindle. Probably more. The question is, does Apple feel comfortable ticking off all of those customers by telling them their entire collection of ebooks can no longer be read on Apple devices? Apple is a very small fish in the ebook game, but a big one in the tech devices game. I’m going to guess that they know where their bread is buttered.

Ah well. Worst case, writers can get their stuff up on Apple almost as easily as on Kindle, so it works either way for us. 😉
Kevin O. McLaughlin recently posted..Begun- the publishing war has…

May 17th, 2011 at 12:24 am
Moses Siregar III
 18 

Heh. We seem to be talking in circles a little bit here, Kevin.

You said: “Sony’s new app was rejected because it allowed *in-app* purchases without giving Apple a cut.”

And I am saying that from all I’ve seen that is definitely not the case. That’s one of the main things I’ve been arguing from the top of the original blog post throughout the comments. There is no solid evidence that this is the case and there’s good evidence that it’s not the case.

There’s a blogger or two who mentioned this, and they appear to have nothing to back up that claim with. Meanwhile, Sony has said that their app did not do this, Apple has not denied it, and in fact Apple said that the issue is this:

“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.”

I know I’ve quoted this a few times, but that is directly from Apple as an explanation of what they didn’t like about Sony.

In other words, Apple is punishing Sony for what Apple already allows Amazon, B&N, and Kobo to do.

May 17th, 2011 at 1:45 am
 19 

Apple has revised the rules, and I thought those posting here might be interested. This isn’t surprising. And the new rules are similar to some comments Jobs had made a month ago. Maybe this was their intention all along? Shrug.

http://www.macrumors.com/2011/06/09/apple-reverses-course-on-in-app-subscriptions/

June 9th, 2011 at 8:13 am
 20 

So what happened here? Did Apple “blink”? Or was this their intention all along? Anyone know?
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June 9th, 2011 at 8:35 am
 21 

This from Apple Insider: “Apple’s change of opinion comes soon after one prominent content provider, the Financial Times, decided to create an HTML5-optimized website rather than submit to Apple’s in-app subscription rules and give the company a 30 percent cut. By offering its product in the Safari Web browser, the newspaper would be able to avoid paying Apple 30 percent of its revenue for subscriptions through the App Store.

The Financial Times application was highlighted in 2010 at the WWDC Apple Design Awards. The iPad application was recognized as one of the best pieces of iOS software, ranked based on design, technical excellence, innovation, quality, technology adoption and performance.”

So, I think they blinked in part. But Steve Jobs claimed multiple times that apps like Kindle would not be affected because of the app type. So, maybe it’s a combination of blinked + original intention.
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June 9th, 2011 at 10:36 am
Moses Siregar III
 22 

Galleycat ran a little article about this recently (even though the crisis seems to have been averted):

http://www.mediabistro.com/galleycat/kindle-app-unchanged-despite-new-apple-app-store-rules_b33453

June 30th, 2011 at 11:25 am
Anthony Pero
 23 

What I took from all of this (months later, to be sure) was that Moses and Kevin missed each other in their circling, lol. I _think_ Kevin was implying that Apple considered Sony’s app a violation, because when you clicked the button, it took you directly to a specific item in their online store. While when you click the “Kindle Store” button, it just launched the browser to the kindle portion of Amazon’s website, not to any product specific page. I can’t confirm that, because as of today, my Kindle app doesn’t even have a button to go to the Kindle store.

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