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Apple intentionally hurting eBook stores

Apple announced the terms of their in-App Subscription Service this morning, and it does indeed look like they are shooting directly at Amazon. What I’m concerned about is the fallout from these new rules on other apps…here’s the paragraph that causes me issue, with the pertinent passage highlighted.

Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

To summarize: publishers are allowed to sell subscriptions on their own websites, but if they do, they must also allow for in-app purchase of said subscription, and there has to be pricing parity between the two methods. This means that, for instance, a newspaper couldn’t offer a subscription on their site for $5, but make the in-app purchase $8…this prevents publishers from variably pricing things higher in the App in order to pad the price to take into account Apple’s 30% of the sale price. So far, so good…it’s that last sentence that really worries me:

In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

Notice that in that sentence, Apple stopped talking about subscriptions and now include content generally. This single lline is the one that, I think, kills eReader software on iOS devices. This means that Amazon can’t keep the Kindle app the way it currently works, which is to tap a button inside the app that then takes you to the Kindle store in Safari. That’s not allowed given the above. That will apply to Barnes & Noble’s Nook software, as well as any other eReader software that I’m aware of on iOS. eBook providers like Amazon and B&N almost certainly can’t afford to move all their sales to in-app purchases because of the 30% Apple “tax”. This means that either they raise prices and move into Apple’s ecosystem, or they stop allowing purchases of books at all on iOS devices.

The rules appear to allow Amazon to sell Kindle books for iOS on the Amazon website directly (obviously Apple can’t do anything about that) but it seems to break any connection between the app and said site. This intentionally damages the user experience for this and other eBook apps, and is the main reason I can’t believe that Apple is pushing this as hard as they are. This is much different than other limitations that Apple has placed on the development of Apps…this isn’t hardware based limitation (multitasking) or anything like that…this seems to be purely a “show us the money” limitation. I’m really disappointed if this is the way that Apple chooses to enforce this, because while they are guilty of many things, intentionally hurting usability has never been one of them.

What I’m really curious about is this: Is Apple going to push these requirements for any App that allows for any purchase…like, for instance, the Amazon app that allows you to shop on Amazon directly. Or Zappos, or Ebay, or any number of other apps that act as a front-end for purchasing goods. If that’s the case, I think that Apple is in for some real trouble and pushback from companies, and possible legal repercussions. Seems like it can’t possibly be legal for the manufacturer of a computer (which is what the iPhone/iPad/iPod touch is, after a recent legal decision) to require that anything purchased on that computer provide them with a cut. I’ll be keeping my eyes on this one.

By griffey

Jason Griffey is the Director of Strategic Initiatives at NISO, where he works to identify new areas of the information ecosystem where standards expertise is useful and needed. Prior to joining NISO in 2019, Jason ran his own technology consulting company for libraries, has been both an Affiliate at metaLAB and a Fellow and Affiliate at the Berkman Klein Center for Internet & Society at Harvard University, and was an academic librarian in roles ranging from reference and instruction to Head of IT at the University of TN at Chattanooga.

Jason has written extensively on technology and libraries, including multiple books and a series of full-periodical issues on technology topics, most recently AI & Machine Learning in Libraries and Library Spaces and Smart Buildings: Technology, Metrics, and Iterative Design from 2018. His newest book, co-authored with Jeffery Pomerantz, will be published by MIT Press in 2024.

He has spoken internationally on topics such as artificial intelligence & machine learning, the future of technology and libraries, decentralization and the Blockchain, privacy, copyright, and intellectual property. A full list of his publications and presentations can be found on his CV.
He is one of eight winners of the Knight Foundation News Challenge for Libraries for the Measure the Future project (http://measurethefuture.net), an open hardware project designed to provide actionable use metrics for library spaces. He is also the creator and director of The LibraryBox Project (http://librarybox.us), an open source portable digital file distribution system.

Jason can be stalked obsessively online, and spends his free time with his daughter Eliza, reading, obsessing over gadgets, and preparing for the inevitable zombie uprising.

3 replies on “Apple intentionally hurting eBook stores”

As you hinted at the end of your post, pushback is inevitable. My wild speculation here is that Apple has done this deliberately, simply to see *how much* resistance they get.

It’s a pretty strong position for them to be in. Many partner vendors are more likely to keep their eyes on the short-term gains offered by Apple’s current dominance of the handheld/tablet niche, and may not wish to draw their ire. If there’s a significant outcry, they can walk their terms back to the way they had them, and still make money hand over fist. Anything in between those extremes still gives them a ton of leverage in the overall market.

I’m not really fond of any of these content tollbooths. The only possible net effect I see are higher prices for consumers, and smaller percentages for content creators. Like you said, I’m definitely eager to see how all of this rattles out.

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