I've never used the app, but I'm not seeing why their apparently unique approach to eBooks couldn't run on WebOS, Meego, or Android. I assume there's a good reason, since you don't throw away years of work easily, but I'd love to hear what that reason is.
People in these parts honestly believe Android is a hospitable business environment, but if your business involves selling things, you have to content yourself with a tiny fraction of iOS's revenue potential. That's why these guys aren't pivoting. Their business wouldn't have existed in 2011 without iOS.
Heh, I guess with Nokia's pivot, I should have said WinMo7, but I had actually forgotten about its existence. The point was that there are other phones out there, with app stores that people (apparently) use. I can't imagine any environment (even Meego's) being less business friendly than Apple's, at this point.
Even with Apple's developer-hostile policies, it seems like it's at best a toss-up at this point between the massive amount of money available on iOS and the greater freedom elsewhere.
I think your sarcasm hides a lack of an actual point to your comment (beyond reiterating my comment's point, which was that selling mobile apps seems to kind of suck in general).
I think my actual point was actually that Apple has been great for developers not hostile as you claimed. I think that's true by inspection. I think this developer had a terrible business model that was exposed by entirely predictable changes to market conditions and went out of business and is lashing out.
Eh, the fact that Apple has been "great for developers" is largely an accidental consequence of the fact that their platform has a lot of users who are willing to spend money. Apple attracted the users because Apple wanted the users, not because they wanted to help developers out. Without the userbase, iOS would be relatively unattractive (and I don't think Apple would feel like it could pull this kind of move).
A large portion of what Apple does that's specifically targeted at developers these days is negative. The NDA, rules so broken they were never consistently enforced, arbitrary rejections, retroactively rejecting apps when they decide to come out with a competitor, etc.
Also, I dispute the claim that this rule change was "entirely predictable." Can you show me somewhere that you or anybody else predicted this rule change before it came to light?
I sell an SEO app ( http://semtab.com ) on both iOS and Android, and the Android version is outselling the iOS one by a wide margin. It caught me a bit off guard because everyone I know keeps repeating that iOS users buy more than Android ones, but that just hasn't been my experience so far. I even put the iOS version on sale at $0.99 in hopes to increase purchases, but it is _still_ not resulting in as many purchases as the Android version at the original $1.99 price.
You may want to consider a new icon for the iOS app (also, please make sure you have an @2x variant of it, too).
edit: i've had a couple minutes to try using it.
You may want to consider overhauling the application's user experience. It doesn't look or 'feel' like a proper iOS app, and I'm guessing that's why the Android version is outselling the iOS one.
* the icons really need @2x variants.
* The user workflow is brittle, especially given how few view controllers there are, here. I shouldn't be able to choose to look at the 'Web' or 'Social' tabs until I've selected a domain.
* The domain entry experience feels cumbersome. Why is it capitalizing my domain name?
* Why do I delete a domain from the 'Web' and 'Social' tabs, and why isn't there an alert prompt?
Add Domain:
* The navigation bar tint color shouldn't change.
* This should be a modal view controller.
* The text shadow behind the label looks weird.
* The label's text should be something more like: "Domain name:", especially since you already give an example in the text field with its placeholder.
* You should call -becomeFirstResponder on the text field when this view controller appears.
Anyway, I know you didn't ask for any of this, but hopefully it proves helpful in driving up your sales.
Thanks for the suggestions and critical feedback. This was the first release that I wanted to get on the app store/market as quickly as possible, so it has not been perfected yet.
I am aware it doesn't have the best design/UI right now, but that will soon be corrected in the next release - at least most of your suggestions anyways.
I think the root of the difference is indeed competition on iOS, and lack thereof on Android. The lack of any decent SEO app on the Android Market is the primary reason I made SEMTab in the first place. I think that is the biggest reason it is selling better there - it's easy to stand out when all the other apps on Android are total crap.
Or perhaps you discovered that there are more search engine marketers on Android than on iOS. Or that your app has more visibility on the Android market. Or multiple factors unrelated to the average user's general app-purchasing habits.
I'm curious about that too. What limitations does Android have that make pivoting hard to do? Why weren't they working on both an Android and iOS app, no to mention WebOS and WP7. It does seem there are a lot of options out there, so there must be a very good reason not to have utilized those platforms. Does iOS provide some APIs that make this type of online purchasing model so much easier than other platforms that it's not even worth investing in something else?
I have a data point of one (me) who disagrees with that. I've spent heaps on apps. I was shocked to find that iOS makes you enter a password before buying stuff - what kind of a PITA is that?
"I was shocked to find that iOS makes you enter a password before buying stuff - what kind of a PITA is that?"
On webOS (myself, wife, daughter) I had the option of requiring a password every time an app was purchased or just letting my 13 year old daughter rack up whatever credit card charges she felt like on her phone. I don't consider it a PITA to enter a password, I consider it a security feature. I am shocked that you imply that android does not have such a requirement and I feel further vindicated in choosing webOS over android.
agree, I think there biggest failure is not attempting to move to another platform.
Theres plenty of ebook stores that do well on Android.. Kindle, Aldiko, & Nook all do well and I use all of them when there are deals, just like I use the Amazon and Google marketplace. When deals appear on apps/books I like, I buy. The content is more valuable than the actual reader.
Out of curiosity, why can't they have it as a reader of books that you download on your computer and transfer over via iTunes/any local area network. I admit this is not what they wanted most likely, but they could look into developing applications for Android devices and such as well that allowed royalty-free purchase in an application. As an iOS developer myself, I believe this would bypass the restriction, but I don't know for sure.
The problem is that this is not the model that is the most hip. What an iDevice user wants is one click purchase to download system. Apple knows this and knows that requiring such would defeat their competition.
What ground can't move at any time? Being completely independent of anybody else is mind-bendingly hard. I bet you aren't either. Very few are — most are just lucky enough not to have had their dependencies fail so catastrophically.
I'd put it this way: there's building on shaky ground and there's building on ground that's designed to disappear as soon as you get something good going.
I'm sorry for iFlow's people but if your business requires to be approved by a potential competitor to exist you are going to be in trouble.
A web company is the most independent company that exists. They are even, in some cases, outside of control of the government (although this is starting to change). And it isn't mind-bendingly hard; a couple of the biggest companies in technology (Google and Facebook) were started by college students in their dorm rooms / garages.
My friend bought a building. 50 apartments. He got investment money from family to put a down payment on the loan. Fix it up. Have tenents pay rent and cover the loans while looking for a seller. Sell it for a proffit.
This was great. Except that he had ABSOLUTELY no risk-mitigation. He could not afford to keep the house on the market for 3 yrs to ensure that no matter what, he does not lose all the invested money.
Guess what? Problems arose trying to sell the house. Took 3 months longer than expected (9mo total vs expected 6). Money ran out. Boom foreclosure. Lost 800k.
The lesson I learned is that take what you are assuming will happen, and make at least SOME risk mitigation. How can you get out? If you can't what will you lose? Etc. Don't make long term risky goals based on hopes that everything will be alright. Assume the worst, can we still come out even if that happens?
Yes, "boo hoo", and all that, but what about the third-party in this failure: the user. Ultimately, we lose. iFlow was a unique application that was innovating in the reader space. It's a shame that they were pushed off of the platform that I prefer.
I'm not going to get all sanctimonious about it, but it's slowly beginning to weigh on my decision making process. I love my iOS devices, I really do, but when I look at Apple's approach, it appears that their bottom line comes first. Period. It's already hurting innovation in limited ways, as we can see here. What happens as they continue this approach and it affects more types of software?
In my view, Android looks more attractive all the time, and I'm not exaclty happy to say that.
That is the truth. I don't understand why so many people are willing to defend Apple in this situation. There is no way to construe these rule changes as anything but anti-user, and you should worry when a company breaks profit records but continues moving in an anti-user direction.
Look. iPhone is superior to Android. I know it every day I use an Android. However I cannot buy an iPhone because:
a) I use sprint and am happy with it.
b) I don't support Apple's control on a moral level. So I will not support Apple by buying the iPhone.
c) I won't develop for iPhone except as an after-thought or short-term project. This way I make money, and get out. I won't make any long-term plans for it. In fact that is true of EVERY mobile platform. Never bind a single long-term plan with one platform. Tomorrow Android can fail and WebOS rises to beat everyone in one swoop. You can't build a company on hopes and luck alone.
That every developer simultaneously develops for iPhone, Android, Windows Phone, WebOS, Blackberry, Meego?
Developers aren't so cavalier as you about suggesting that you port your code to multiple platforms because we do know how much time, effort and platform-specific knowledge it takes to build a decent app.
Many iPhone, Android, Windows Phone apps are written by single developers that can't take 6 months per platform to learn how to code for it.
For most of us making a bet on single platform is the only viable strategy.
Bad strategy? Maybe. The only one possible? Unfortunately.
You would be pissed off too if your business failed not because the owner of the platform you bet on built a better product than you (and with their money, teams of programmers, marketing and ability to advertise to users of that platform they do have a huge advantage) but because they just used their monopolistic control over their platform to set business terms that are unheard of on other similar platforms and kill your business without them needing to lift a competitive finger.
I'm sure you'll tell me that Apple has the right to screw everyone on their platform and if I don't like it, I should just use another platform.
And that's exactly what I'm hoping people will do once they realize that Apple not only has the power to screw their developers and their users but is actually screwing them, as this on-going saga of 30% monopoly tax on content sales shows.
"Five of us spent nearly a year and a half of our lives and over a million dollars in cash and sweat equity developing the iFlowReader app"
if they were serious about the risking all their eggs in same basket, they could have used consultants/outside developers to port their app to other platforms with less than 10% of the said investment
Note that they state both cash and sweat equity of one million+.
Between five people and 1.5 years, a million dollars in sweat equity for developers is probably understated. They invest the time & skills (that they could have been using to freelance or consult for others) into their own company. Some people would consider this 'free' - but it's not free, the opportunity cost is still there. When you're closing shop without a gain, you are going to start looking back and counting all those lost opportunities in terms of dollars.
a) A game has no issues. It's life cycle is short.
a.a) A long-term product/service strategy can't rely on one platform as they are under the whim of the owner.
b) Don't build exclusively for one platform. Thats right, develop for android, webos, etc. The point is that one choice is to be fucked in the ass by a company at their discretization, the other choice is to have protection vs that.
You can't complain "waa waa waa apple chaned their rules" too bad. It's apple's proprietary tightly controlled market. You want to make money? Bend over backwards for them. Otherwise piss off. It happened to twitter clients, its happening to facebook clients, its happening to apple clients. Learn from history.
Windows applications have been lucky. MS has been pretty nice over the years with what they allow. However if MS says "30% surcharge on any application selling something running on windows" then guess what, same cries will happen. Boo freakety hoo. This is what people were saying about being careful with apple's tight control. This is why I support android. But some didn't listen so they get fucked in the end.
Risk and trust are inherent in entrepreneurship. We all count on any number of providers to behave fairly, from technology service providers, to API services, to retailers, distributors, and other partners.
Sure, it's best to have many legs to stand on, but that is simply not the case for most early startups.
Hopefully every (re)seller on the planet is now aware that they should not attempt to build a marketplace on the IOS platform without getting a licence agreement with Apple.
I'm very interested in seeing how Netflix and the Kindle play out on the iPad though. If Apple gets too agressive in trying to lock down revenues, they may just end up driving people off their platform on to Google's.
Thank goodness for competition - can you imagine if the iPad was the only tablet option for the next couple years. At least this way, Apple will have to exercise some restraint.
Can't you avoid this by just always buying content via Amazon.com and then downloading it to your device, and avoiding actually shopping on the device? That's what I do.
I think this violates Apple's terms.
If you make your content available for sale outside the app, it must also be made available in the app at the same price or less.
I'm not sure if this covers normal eBooks or only subscription-based periodicals, though.
No, I believe this is only true if you provide a link from within your app. For example, as long as Amazon's Kindle app doesn't have a link to the Amazon Kindle bookstore, they don't have to support in-app purchase (and hence don't have to give Apple a cut).
The App Store Review Guidelines [1] state pretty clearly:
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
I love my iPad too - but after playing with the new 10.1" Galaxy Tab for a few hours (thank you, Google IO), I think I'd now recommend an Android tablet over an Apple one (for just the kind of BS App Store policies being enforced here).
only needs to be available as an in app purchase if the app itself has a way of enabling you to purchase same content from outside the app (for example, a "subscribe now" button that links directly to a purchase page in Safari). I'm not sure where just a "you can subscribe from our website", sans link, would fall, but I'd hope that would be ok.
If it's available for purchase/download elsewhere it also needs to be available in-app for the 30% fee. It can't be priced higher in-app. That is the dilemma for the retailers.
Here are the choices:
1) Pull out of IOS completely
2) Lose money on all in-app purchases and hope that you make enough in direct sales to stay in business
3) Raise prices everywhere so the 30% fee doesn't hurt so much
Option #2 is just not realistic. It could be a very tough call between #1 and #3. The IOS store probably has enough critical mass that a business could lose substantial sales by ignoring it. The bigger risk is allowing an opening for a new entrant to come in, build a business in an untapped market and eventually be a tough competitor. Option #3 basically screws all your customers- even if they've never even heard of the IOS stores- so Apple can line their pockets.
It's a really crummy policy. It's either going to hurt businesses, who stand to lose sales or even go under, or it's going to hurt customers who will have to pay higher prices as a result.
(4) negotiate a deal where they get more then 30%.
(5) negotiate to remove DRM and operate as a Web App.
(6) change business models to subscription.
(7) license the app part of the business model to another company not involved with your store. That company can then pursue anti-trust claims against Apple if disallowed since they have no ability to offer the items for sale.
(8) add more value with your product i.e. get a better business model then "I'm gonna get rich being an additional middleman of ebooks"
Sorry for taking this off topic, but this is the perfect example of a comment where it would be very interesting to see how many hners that upvoted this opinion. I was one of them, since I believe it is a preferrable position to take. But it would be very interesting to see on what magnitude it resonates with the community as a whole.
Downvotes accepted as retribution for me going meta on this conversation.
I'll admit to having edited it half a dozen times to appropriately capture the nuances. As a Silicon Valley professional (Started at Netscape in 1996), and a huge fan of Apple Products (I'm typing this on an MacBook Air in a Redwood City Coffee Shop, I tracked my workout this morning using GymBuddy on my iPhone4, and I read Practical Programing for strength training last night on my iPad2), yet at the same time not unaware of how much damage a Monopolist can do (I believe that they eventually stifle innovation) I wanted to toe the fine line between being a hater, a realist, and, because we are on YC, effectively communicate the market realities of building on someone else's platform.
I also always keep grellas, patio11, and tptacek in mind when reviewing tone to keep out snark or discourtesy, and maximizing content.
It's their platform, they can do what they want with it. Nobody's telling Microsoft they're "anti-competitive" because they have a lock on the Xbox marketplace, nor Sony and their exclusive relationship with PSN.
It's anti-competitive when you're talking about an essential service. The case against Microsoft was about Windows since at the time 95% of all computers used some form of Windows and they had a virtual lock on the market. Generally you need to be in a monopoly position to be considered anti-competitive. See also: Standard Oil, IBM, AT&T.
There is only one fundamental requirement: that the company's actions be anti-competitive. It is not necessary for the company to have a monopoly or even a majority share of a market (though these are factors). Furthermore, ownership of the platform is a significant antitrust factor because it drastically ups the risk and concern for anticompetitive behavior. (The Disneyworld analogy brought up below does not apply. Not only does it mix up antitrust law with property law, it ignores the crucial distinction between Apple and Disney: Apple openly invites others to participate in commercial activity on their platform, whereas Disney does not.)
Standard Oil, AT&T, and Microsoft may be the marquee cases, but they're not representative cases of the extent of antitrust law.
There are all sorts of gray areas here that Apple will have to get called out on.
Third party payments are a great example. Say I sell an app that lets you pay for movie rentals at a RedBox kiosk that does so by letting you select and purchase on your phone/tablet and sending the right instructions to the RedBox servers so that your rental is prepaid when you arrive at the box.
Do I owe 30% of what was paid to RedBox even if I as the app developer am not RedBox?
Then let's talk declining balance accounts, a subcategory of the above. For example, your lunch money account at college. Your mom might put $500 on that account at the beginning of the school year from her home computer. You then use your phone in the food areas on campus to pay from your lunch account.
Is this considered a virtual currency and therefore Apple gets 30% every time you pay for lunch? It definitely is based on how I read Apple's agreement.
From what I read it sounds like their publishing partners bailed and it's not a problem relating to the platform per-se, but that they're being cut out.
Correct me if I'm wrong, but couldn't they do what Amazon does and just redirect the user to Safari for purchasing books? I suppose that's a very small inconvenience compared to iBooks' direct purchase, but I find it worth the tradeoff to have my purchases available on more devices.
This "loophole" was closed by Apple during the last round if App Store approval rule changes back in December of last year. The Kindle app seemingly gets a pass, but a number of other applications have been rejected since then.
Ah, that stinks. That kind of inconsistency is very annoying. So you can't even have a link to your web based store (that's all that the kindle app really has now) in the application any more?
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.
I believe existing apps have until June to comply with the new rules. We'll see how Apple plays this though. It's not in their best interests to reject the Kindle app.
It's troubling that they seem to be willing to apply one rule to the big, established players and another to everyone else. In the long run I don't think this nurtures a healthy market.
I think that was another commenter's speculation. All we know is that Apple says existing apps have until June 30. It remains to be seen of they make exceptions or not.
The inconsistencies in enforcement that appear, time and again, to give a free pass to heavyweight competitors have to be breaking a law somewhere.
Isn't this what racketeering and monopoly laws are supposed to prevent? If any lawyers are on this thread, it would be great to hear their input on this.
I'm not sure what they'd be violating. Stores obviously have a right to decide what products they will sell, and to forge different deals with different vendors.
Should Wal-Mart be forced to carry my self-published book because they carry some Random House best sellers?
And has Kindle been updated in that time? I think they meant that any new app (including new releases to existing apps) would have to obey the rule, but they wouldn't start kicking apps out of the store until June 30.
There are two components to this company: an eBook reading app, and a bookstore. They clearly took much more pride in the app, and that's where they have true value. With the store they are just middlemen, and though perhaps they could add value by helping people find they books they'd most enjoy, they don't seem to be innovating there. In the end their eBooks are just Adobe DRM protected ePubs.
So monetizing the middlemen part won't work, but aren't there any number of ways to monetize the reading app part? I, for one, wouldn't mind a flow-based reader. I've bought eBooks from a few places now, but also hate the page-turning interface.
This comes across as a stunt to try to change the agency model for book selling. Good luck on that, though, because now you need to convince both Apple and all the publishers to give them 20% again. But why would they do that? Extra middlemen are not going to offer 20% of value in a digital distribution chain.
I'm referring to collecting money through Apple's payment system:
Customer --> Apple --> Reseller --> Publisher
as opposed to:
Customer --> Reseller's website --> Publisher.
iFlow says in the linked article this second model is unworkable for them because iFlow can't get by on 30% of the transaction. iFlow wants 50% like they were getting before the agency model.
If you read carefully, they get (up to) %30 of the book price in margin from the publisher. Then they are asked to turn around and pay %30 of the book price to Apple. This means they make %0 net.
Subtract from the %0 net margin the costs of doing business and you are in a lot of trouble.
Sounds like they need to move to a premium app model and stop trying to make money from book sales.
To the best of my understanding, in the top model here iFlow gets 0%, in the bottom model, iFlow gets 30%. iFlow previously used the bottom model and got 50%. They could continue to use the bottom model at 30%, on iOS or other platforms, but clearly that's not enough for them to get by.
Their complaint here is the agency model of pricing itself.
"iFlow wants 50% like they were getting before the agency model."
You may not have intended this, but that sentence reads as though iFlow is merely making less money than it wold like. The problem's worse than that. iFlow would be losing money with each book sold.
iFlow doesn't have the clout to negotiate contracts with individual major publishers: books are made available through a wholesaler. The wholesaler distributes the publisher's cut, takes its own, and gives iFlow itself a cut of _less than_ 30% of the sale price. Since Apple suddenly wants an entire 30% of the sale price, iFlow would literally be losing money with each transaction to make up Apple's "cut".
As part of the agency model, all books must be sold at the same retail price, so iFlow can't simply bump up the price of its books to compensate, either.
iFlow never sold books directly through their app, because the iOS terms never allowed in-app sales. If iFlow was selling books before, they were doing it through a website, unless their app was incorrectly approved.
iFlow doesn't need any clout when negotiating a cut, everybody gets the same deal:
>All sales agents get a 30% commission on the sale of a book. No one gets a different deal. Prior to the agency model, publishers typically offered retailers a 50% discount.
Apple only gets a cut if they handle the processing, i.e. sold on iOS. Books are not a subscription, they can be sold on a website outside of iOS without restriction.
Am I wrong on any of this? I got downvoted but I'm not sure why.
If you sell digital goods for use on an iOS device then you must also offer them via in-app sales, for the same price as you do elsewhere.
Since their app is only an iOS app, everyone will continue to buy via the in app purchases even if they did offer it online, and for each of those purchases they have to pay the Apple tax.
but it seems that this policy was unclear even at the time according to the terms, and it's certainly not enforced with the Kindle app, so it's unclear what's going on here.
> it seems that this policy was unclear even at the time according to the terms
That's pretty much the problem in a nutshell - the policy's unclear, and it's always unclear until Apple brings the hammer down. Not a good environment in which to try to build a business.
I think the lesson here is never build a business on another companies platform unless you have rock solid licenses guaranteeing they won't change the rules like this. Same thing for Twitter or Facebook. They can put you out of business if they choose to and it's not wise to give another company a kill switch for your investment.
Following your advice no one could develop anything for iOS. Or Android. Or WebOS. Or any other computing platform. Every platforms vendor could change the rules your depends on.
As much as Apple is problematic here, the "90% of ebooks being controlled by 6 publishers who all fix prices and pricing rules" seem to be at least as big an issue as well.
I'd think there'd be an opp or two for someone to get in to publishing and selling just ebooks not owned by the big 6, but that market may be too small to try to nurture at this point.
I mean if I start selling ebooks in the corner at Starbucks they may tolerate that but when Starbucks gets into the ebook business there should be a huge red flag going off telling you that the rules will eventually change: either they'll disallow my ebook sales or demand a cut.
Another huge red flag is a business model based on buying egoods from a wholesaler and reselling them in another vendors shop.
Another question: why couldn't they continue as a reader app and a web app store run by a separate company?
(the store licenses the DRM to the reader company)
If the answer is that the business doesn't work without the legion of customers the app store brings to the door that's another red flag.
I disagree with your analogy. iOS is not a store. The App Store is a store. I'd instead make this analogy: The owner of a bookstore is also the mayor of the town. He enacts a law (via declaration) requiring all bookstores to accept his bookstore's credit cards (of which he gets 30% of the sell price).
Luck for Apple they aren't dominant in ebooks. If they do the same thing to iTunes competitors (and it looks like they might), they could be in real trouble with regulators.
Speaking of bad analogies, iOS is not a town that Apple just happened to get elected mayor of. It's more like Disney World and Apple is Disney. Good luck starting your business inside Disney World without living by their rules.
It's more like buying an espresso machine from starbucks and then having starbucks demand 30% from any coffee producer whose coffee is used to make espressos.
The link's plenty interesting, but next time please try to avoid editorializing in the title. A "vig" is the cut taken by a loan shark or bookie and has strong connotations of crime and dishonesty (at least in the US). Apple's not breaking any laws here (right?) so calling it a "vig" is pretty far off base.
I think it actually conveys the tone of the article well, but yea, it does kind of border on libelous. I don't think the article goes as far as calling it a vig, but it is clear the iFlow team is understandably angry.
"Vig" was famously used by Nathan Myhrvold in an internal memo to Bill Gates in which he proposed a structure whereby Microsoft could obtain a portion of content transactions that occur on the Internet. He used the term "vig" and it's appropriate here.
http://mikecanex.wordpress.com/2011/02/01/the-day-apple-beca...
I love the convenience of ebooks, but the ease of shenanigans in the distribution channel and the ability of a customer to lose an entire library's worth of books over business rules or technical issues distresses me.
When you read a paper book, you can be certain that the content in it is the same as when it was printed, and hasn't been edited or censored since you bought it. It can't be taken away from you by the publisher, except by physical force. You can resell it at will. Publishers and retailers who wants to try different pricing strategies can do so without facing the powerful control of Apple or Amazon.
I plan to keep on reading ebooks, but I'll buy the books I actually care about in physical form.
a) accessible and buyable by me (Linux, .nl based)
b) at least as easy to find and get as pirated material
I will immediately buy. In all other situations: I am not going to fiddle with drm-ripping python scripts, convertors, virtual-machines, geo-ip-faking-proxies and so on, just to be able to pay for stuff that I can get without all that hassle for free.
I even track down authors for books I like and wire them the money personally, if for some reason their publishers hide behind all this DRM nonsense.
The last two sentences seem to contradict each other: You don't want to jump through hoops but try to track down authors to send them money on a sidechannel?
In general I'm with you though (Germany, mostly on Linux as well) and I try to do something similar whenever possible.
You can't really do this so easily with books, but my favourite tactic with music is to rampantly pirate an artists output, then go up to them at a gig and press a wad of cash into their hand with an apologetic smile :)
I don't like piracy and I will never, ever use any product crippled with DRM. Therefore I read only public domain e books, and they're plenty. If everyone did the same, we'd get rid of this nonsense quickly. Don't encourage them by buying DRM'd ebooks.
Both O'Reilly and Pragmatic Programmers offer ebooks with no DRM, just watermarking. It might be harder to find commercial fiction ebooks without DRM, but DRM-free is the norm for technical books.
I have a Nook and I do not buy any books through B&N.com, only direct from technical publishers that are DRM-free and then load the epub file via USB. In fact I only turn my network connectivity on about once a month to update the clock on the device.
Badmouthing iOS platform and appstore policies wont help.
They knew the risk when the appstore was launched, the only exit strategy was acquisition by a established publisher or seller, which did not materialize.
Apple is a thought leader, Android and others just copy their policies, so expecting the margins on other platform is not viable on longer term.
If I was CEO of iFlowReader I would retune the business models for current realities, tying up with self book publisher like lulu, xlibris, who can offer 50% margins on ebook sales.
tl;dr : retailer's cut under agency model - platform provider's cut of in-app purchases = 0
The author attributes the agency model to Apple, which I think is understating the role of the publishers, who would have rejected it if it hadn't been very much in their own interests. Expecting the publishers to keep giving you outsized discounts[1] for no reason but inertia was a mistake. Even Amazon couldn't keep that gravy train rolling. The market was begging for a shaking and Apple shook.
[1]:Does this sound stable? "There is no comparison between the retailers’ costs and risks associated with physical books and those associated with ebooks. There is no economic justification to providing the same level of discounts. But that’s where we are." That's from April 2009. -- http://www.idealog.com/blog/ideas-triggered-by-amazon-buying...
>>>The author attributes the agency model to Apple
This is because it was Apple that devised the Agency Model and was the first to propose it to the Big Six publishers as a way of getting them on iOS. This led to Macmillan battling with Amazon one infamous weekend and had Amazon retaliate by removing all Buy buttons from Macmillan books. Amazon soon capitualted, other publishers -- except for Random -- piled on, moving to the Agency Model. When Random finally joined, all their books went up anywhere from $2 to over $7 in price.
This is exactly the reason that I haven't bought an iPad 2- I intend to use it for the netflix and kindle apps, and I'm not sure if they're still going to be there in 6 months. For a $500 device, the risk was just too high. I got a kindle instead, and I just use my laptop for netflix...
Apple needs to realize that their greed may kill their platform. Nobody would buy an iOS device with no killer apps - especially when android is getting better every day. As an iOS developer, I fully expect the platform to go the way of the dinosaurs.
What previous similar missteps has Apple made that support your theory? Apple's been batting well over .500 and their sales and stock price both indicate appreciation and support.
Yeah, they're doing great, but you can't backup your theory with two measures that are heavily dependent on past results. If you think Apple are going to keep doing as well as they are now in the face of some pretty ferocious competition then you can't just cite current sales and stock price.
This is just common sense- most customers wouldn't buy an iBrick (iphone w/o killer apps), and even apple knows it- that's why they focus on killer apps in their ads. Google is smart enough to know that you shouldn't tax your business partners out of business, even for short-term gains. Sure, apple is going to own the ereader market on the iOS platform, but they've introduced so much risk into being an iOS developer that it's very, very silly to build a business on top of them.
One word: disintermediation. iFlowReader was acting as an intermediary, selling a publisher's ebook to a reader and taking 50% of the revenue. Why should Random House pay someone 50% of the selling cost for doing an arbitrage play on a bunch of ones and zeros with no additional effort? Random House can cut out the middle man (who adds no value) and sell it themselves. It's a smart business move.
Now iFlowReader claims to offer a more compelling interface, so pivot and find a way to sell the reader software either to end-users who can import their already-purchased ebooks or license it to the publishers. Offer branded versions of the software to the publishers if it's that good and charge the publishers based on a percentage of the gross purchased through the software, which should be quite easy to track.
In that the owners of IFlow Reader tried to monetize by getting a piece of every ebook sale, and when that strategy failed, they decided to stop selling iFlow Reader.
I'm not sure how much money they have made over the time before Apple imposed a 30% fee on book sales and the like, but I fail to see why they couldn't port their app to another platform. You know, instead of kicking the sand around and calling it quits.
As a iPhone-user gone Android, I can't wait to see all the awesome services which will be coming my way as Apple makes iOS an unfeasible platform to build on.
So far their greed has been tolerated due to an early iOS lead on app-profitability. Now that the iPhone is getting (severely) dated with next to no advantages to bolster, and with Android overtaking iOS in every way (including the one which counts: marketshare) I can't see this holding up for very long.
Soon enough enough people will say "Fuck Apple" and just head to Android, leaving iOS as a niché market. Why develop for 10% of the world's smartphones when you could be doing 80%? Even if Android customers were 400% less willing to buy apps (and no, no current market trends indicate that is the case), Android would still be more profitable to developers.
Apple is doing some serious gambling here, and I honestly don't think it will play out to their advantage.
The problem is that it's not an if-else scenario with Apple and Android. Right now Apple is booting developers out with their restrictions, and in this case, the developer is making the same app as Apple has for free (iBooks). And if there's not sufficient Android users to make developing this app for the Android worth doing, then the developer isn't going to swap platforms, they'll just pack up and go home.
Don't get me wrong, I'd love to see more Android developers. I just don't think it's very likely until and unless Android picks up more steam...and that probably won't happen until the Android App store is as saturated in iOS's.
As a consumer I want less people between me and the actual producer of the work so another intermediary going out of business bothers me not at all.
My ideal world is that I buy a novel direct from an author, perhaps paying a small commission to a single intermediary. Author to publisher to iFlow to Apple to me isn't efficient.
Yes there is an issue here with how Apple and the publishers behave but there is also a significant issue with how much value iFlow were adding in exchange for their cut. A slightly different (maybe better) reader simply isn't worth the 30% they seem to be planning on.
As a consumer why would you care about the route content takes from producer to consumer? The only thing that matters is the content and how you consume it. If iFlow offered a better way to consume it then you should be happy to get it from them, and sad that you can no longer.
I really don't see where 'efficiency' comes into it?
My point is that for a business to work the value you add must be in some way proportional to the money you make - if it's not you're going to be vulnerable and that's what happened here. I don't care about efficiency as a consumer but I recognise that if a business is making a transaction less efficient while adding little actual benefit that's likely (not certainly but likely) to be a problem for them.
In essence the iFlow USP seems to be their reader app - everything else was being done by someone else either the same or better. How is that seriously going to a warrant 30% cut (which is what they were getting from the publishers) in the face of greater choice and likely better prices from Amazon and Apple?
Selling books from large scale conventional publishers is a bulk market right now and if you can't answer the question "how do I compete with Amazon?" you're in trouble and "a nice reader app" simply isn't a good answer.
Because the Agency price-fixing model has led to eBooks not being priced by market forces but by a cartel that supplies over 90% of the existing market.
That's a bigger issue than Apple though that goes through the publishers, Apple and Amazon and isn't going to be solved by another couple of competitors who weren't really competitive.
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[ 3.6 ms ] story [ 177 ms ] threadPeople in these parts honestly believe Android is a hospitable business environment, but if your business involves selling things, you have to content yourself with a tiny fraction of iOS's revenue potential. That's why these guys aren't pivoting. Their business wouldn't have existed in 2011 without iOS.
A large portion of what Apple does that's specifically targeted at developers these days is negative. The NDA, rules so broken they were never consistently enforced, arbitrary rejections, retroactively rejecting apps when they decide to come out with a competitor, etc.
Also, I dispute the claim that this rule change was "entirely predictable." Can you show me somewhere that you or anybody else predicted this rule change before it came to light?
I guess your target market is the tech savvy crowd who are often put off by the iOS closed platform.
edit: i've had a couple minutes to try using it.
You may want to consider overhauling the application's user experience. It doesn't look or 'feel' like a proper iOS app, and I'm guessing that's why the Android version is outselling the iOS one.
* the icons really need @2x variants.
* The user workflow is brittle, especially given how few view controllers there are, here. I shouldn't be able to choose to look at the 'Web' or 'Social' tabs until I've selected a domain.
* The domain entry experience feels cumbersome. Why is it capitalizing my domain name?
* Why do I delete a domain from the 'Web' and 'Social' tabs, and why isn't there an alert prompt?
Add Domain:
* The navigation bar tint color shouldn't change.
* This should be a modal view controller.
* The text shadow behind the label looks weird.
* The label's text should be something more like: "Domain name:", especially since you already give an example in the text field with its placeholder.
* You should call -becomeFirstResponder on the text field when this view controller appears.
Anyway, I know you didn't ask for any of this, but hopefully it proves helpful in driving up your sales.
Good luck!
I am aware it doesn't have the best design/UI right now, but that will soon be corrected in the next release - at least most of your suggestions anyways.
On webOS (myself, wife, daughter) I had the option of requiring a password every time an app was purchased or just letting my 13 year old daughter rack up whatever credit card charges she felt like on her phone. I don't consider it a PITA to enter a password, I consider it a security feature. I am shocked that you imply that android does not have such a requirement and I feel further vindicated in choosing webOS over android.
Theres plenty of ebook stores that do well on Android.. Kindle, Aldiko, & Nook all do well and I use all of them when there are deals, just like I use the Amazon and Google marketplace. When deals appear on apps/books I like, I buy. The content is more valuable than the actual reader.
You shouldn't build your foundations on ground that can move at any time.
iDevices are pretty neat pieces of kit. I was going to dev for iOS, once. I'm glad I didn't make THAT mistake.
I'm sorry for iFlow's people but if your business requires to be approved by a potential competitor to exist you are going to be in trouble.
My friend bought a building. 50 apartments. He got investment money from family to put a down payment on the loan. Fix it up. Have tenents pay rent and cover the loans while looking for a seller. Sell it for a proffit.
This was great. Except that he had ABSOLUTELY no risk-mitigation. He could not afford to keep the house on the market for 3 yrs to ensure that no matter what, he does not lose all the invested money.
Guess what? Problems arose trying to sell the house. Took 3 months longer than expected (9mo total vs expected 6). Money ran out. Boom foreclosure. Lost 800k.
The lesson I learned is that take what you are assuming will happen, and make at least SOME risk mitigation. How can you get out? If you can't what will you lose? Etc. Don't make long term risky goals based on hopes that everything will be alright. Assume the worst, can we still come out even if that happens?
I'm not going to get all sanctimonious about it, but it's slowly beginning to weigh on my decision making process. I love my iOS devices, I really do, but when I look at Apple's approach, it appears that their bottom line comes first. Period. It's already hurting innovation in limited ways, as we can see here. What happens as they continue this approach and it affects more types of software?
In my view, Android looks more attractive all the time, and I'm not exaclty happy to say that.
http://www.paulgraham.com/identity.html
People seek validation for their purchasing decisions and identify themselves by what brand of cell phone they carry around.
a) I use sprint and am happy with it.
b) I don't support Apple's control on a moral level. So I will not support Apple by buying the iPhone.
c) I won't develop for iPhone except as an after-thought or short-term project. This way I make money, and get out. I won't make any long-term plans for it. In fact that is true of EVERY mobile platform. Never bind a single long-term plan with one platform. Tomorrow Android can fail and WebOS rises to beat everyone in one swoop. You can't build a company on hopes and luck alone.
That every developer simultaneously develops for iPhone, Android, Windows Phone, WebOS, Blackberry, Meego?
Developers aren't so cavalier as you about suggesting that you port your code to multiple platforms because we do know how much time, effort and platform-specific knowledge it takes to build a decent app.
Many iPhone, Android, Windows Phone apps are written by single developers that can't take 6 months per platform to learn how to code for it.
For most of us making a bet on single platform is the only viable strategy.
Bad strategy? Maybe. The only one possible? Unfortunately.
You would be pissed off too if your business failed not because the owner of the platform you bet on built a better product than you (and with their money, teams of programmers, marketing and ability to advertise to users of that platform they do have a huge advantage) but because they just used their monopolistic control over their platform to set business terms that are unheard of on other similar platforms and kill your business without them needing to lift a competitive finger.
I'm sure you'll tell me that Apple has the right to screw everyone on their platform and if I don't like it, I should just use another platform.
And that's exactly what I'm hoping people will do once they realize that Apple not only has the power to screw their developers and their users but is actually screwing them, as this on-going saga of 30% monopoly tax on content sales shows.
if they were serious about the risking all their eggs in same basket, they could have used consultants/outside developers to port their app to other platforms with less than 10% of the said investment
Between five people and 1.5 years, a million dollars in sweat equity for developers is probably understated. They invest the time & skills (that they could have been using to freelance or consult for others) into their own company. Some people would consider this 'free' - but it's not free, the opportunity cost is still there. When you're closing shop without a gain, you are going to start looking back and counting all those lost opportunities in terms of dollars.
a) A game has no issues. It's life cycle is short.
a.a) A long-term product/service strategy can't rely on one platform as they are under the whim of the owner.
b) Don't build exclusively for one platform. Thats right, develop for android, webos, etc. The point is that one choice is to be fucked in the ass by a company at their discretization, the other choice is to have protection vs that.
You can't complain "waa waa waa apple chaned their rules" too bad. It's apple's proprietary tightly controlled market. You want to make money? Bend over backwards for them. Otherwise piss off. It happened to twitter clients, its happening to facebook clients, its happening to apple clients. Learn from history.
Windows applications have been lucky. MS has been pretty nice over the years with what they allow. However if MS says "30% surcharge on any application selling something running on windows" then guess what, same cries will happen. Boo freakety hoo. This is what people were saying about being careful with apple's tight control. This is why I support android. But some didn't listen so they get fucked in the end.
Sure, it's best to have many legs to stand on, but that is simply not the case for most early startups.
I'm very interested in seeing how Netflix and the Kindle play out on the iPad though. If Apple gets too agressive in trying to lock down revenues, they may just end up driving people off their platform on to Google's.
Thank goodness for competition - can you imagine if the iPad was the only tablet option for the next couple years. At least this way, Apple will have to exercise some restraint.
I'm not sure if this covers normal eBooks or only subscription-based periodicals, though.
I love my Apple products, but this particular rule is making me reconsider how committed I plan on staying.
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
[1] https://developer.apple.com/appstore/resources/approval/guid...
only needs to be available as an in app purchase if the app itself has a way of enabling you to purchase same content from outside the app (for example, a "subscribe now" button that links directly to a purchase page in Safari). I'm not sure where just a "you can subscribe from our website", sans link, would fall, but I'd hope that would be ok.
Here are the choices: 1) Pull out of IOS completely 2) Lose money on all in-app purchases and hope that you make enough in direct sales to stay in business 3) Raise prices everywhere so the 30% fee doesn't hurt so much
Option #2 is just not realistic. It could be a very tough call between #1 and #3. The IOS store probably has enough critical mass that a business could lose substantial sales by ignoring it. The bigger risk is allowing an opening for a new entrant to come in, build a business in an untapped market and eventually be a tough competitor. Option #3 basically screws all your customers- even if they've never even heard of the IOS stores- so Apple can line their pockets.
It's a really crummy policy. It's either going to hurt businesses, who stand to lose sales or even go under, or it's going to hurt customers who will have to pay higher prices as a result.
(4) negotiate a deal where they get more then 30%.
(5) negotiate to remove DRM and operate as a Web App.
(6) change business models to subscription.
(7) license the app part of the business model to another company not involved with your store. That company can then pursue anti-trust claims against Apple if disallowed since they have no ability to offer the items for sale.
(8) add more value with your product i.e. get a better business model then "I'm gonna get rich being an additional middleman of ebooks"
Meaning: More money.
Reality: Impossible.
Downvotes accepted as retribution for me going meta on this conversation.
I'll admit to having edited it half a dozen times to appropriately capture the nuances. As a Silicon Valley professional (Started at Netscape in 1996), and a huge fan of Apple Products (I'm typing this on an MacBook Air in a Redwood City Coffee Shop, I tracked my workout this morning using GymBuddy on my iPhone4, and I read Practical Programing for strength training last night on my iPad2), yet at the same time not unaware of how much damage a Monopolist can do (I believe that they eventually stifle innovation) I wanted to toe the fine line between being a hater, a realist, and, because we are on YC, effectively communicate the market realities of building on someone else's platform.
I also always keep grellas, patio11, and tptacek in mind when reviewing tone to keep out snark or discourtesy, and maximizing content.
How's that for Meta. :-)
It's anti-competitive when you're talking about an essential service. The case against Microsoft was about Windows since at the time 95% of all computers used some form of Windows and they had a virtual lock on the market. Generally you need to be in a monopoly position to be considered anti-competitive. See also: Standard Oil, IBM, AT&T.
There is only one fundamental requirement: that the company's actions be anti-competitive. It is not necessary for the company to have a monopoly or even a majority share of a market (though these are factors). Furthermore, ownership of the platform is a significant antitrust factor because it drastically ups the risk and concern for anticompetitive behavior. (The Disneyworld analogy brought up below does not apply. Not only does it mix up antitrust law with property law, it ignores the crucial distinction between Apple and Disney: Apple openly invites others to participate in commercial activity on their platform, whereas Disney does not.)
Standard Oil, AT&T, and Microsoft may be the marquee cases, but they're not representative cases of the extent of antitrust law.
Third party payments are a great example. Say I sell an app that lets you pay for movie rentals at a RedBox kiosk that does so by letting you select and purchase on your phone/tablet and sending the right instructions to the RedBox servers so that your rental is prepaid when you arrive at the box.
Do I owe 30% of what was paid to RedBox even if I as the app developer am not RedBox?
Then let's talk declining balance accounts, a subcategory of the above. For example, your lunch money account at college. Your mom might put $500 on that account at the beginning of the school year from her home computer. You then use your phone in the food areas on campus to pay from your lunch account.
Is this considered a virtual currency and therefore Apple gets 30% every time you pay for lunch? It definitely is based on how I read Apple's agreement.
-Jeff
Since Redbox is NOT actually providing content to your device, there wouldn't be a problem there.
Still, the 3rd party seller argument is a mystery in cases where these rules would normally apply.
http://www.apple.com/pr/library/2011/02/15appstore.html
Also: http://news.ycombinator.com/item?id=2535773
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.
Where can I read more about this?
Isn't this what racketeering and monopoly laws are supposed to prevent? If any lawyers are on this thread, it would be great to hear their input on this.
Should Wal-Mart be forced to carry my self-published book because they carry some Random House best sellers?
So monetizing the middlemen part won't work, but aren't there any number of ways to monetize the reading app part? I, for one, wouldn't mind a flow-based reader. I've bought eBooks from a few places now, but also hate the page-turning interface.
This comes across as a stunt to try to change the agency model for book selling. Good luck on that, though, because now you need to convince both Apple and all the publishers to give them 20% again. But why would they do that? Extra middlemen are not going to offer 20% of value in a digital distribution chain.
Customer --> Apple --> Reseller --> Publisher
as opposed to:
Customer --> Reseller's website --> Publisher.
iFlow says in the linked article this second model is unworkable for them because iFlow can't get by on 30% of the transaction. iFlow wants 50% like they were getting before the agency model.
Subtract from the %0 net margin the costs of doing business and you are in a lot of trouble.
Sounds like they need to move to a premium app model and stop trying to make money from book sales.
Their complaint here is the agency model of pricing itself.
You may not have intended this, but that sentence reads as though iFlow is merely making less money than it wold like. The problem's worse than that. iFlow would be losing money with each book sold.
iFlow doesn't have the clout to negotiate contracts with individual major publishers: books are made available through a wholesaler. The wholesaler distributes the publisher's cut, takes its own, and gives iFlow itself a cut of _less than_ 30% of the sale price. Since Apple suddenly wants an entire 30% of the sale price, iFlow would literally be losing money with each transaction to make up Apple's "cut".
As part of the agency model, all books must be sold at the same retail price, so iFlow can't simply bump up the price of its books to compensate, either.
iFlow doesn't need any clout when negotiating a cut, everybody gets the same deal:
>All sales agents get a 30% commission on the sale of a book. No one gets a different deal. Prior to the agency model, publishers typically offered retailers a 50% discount.
Apple only gets a cut if they handle the processing, i.e. sold on iOS. Books are not a subscription, they can be sold on a website outside of iOS without restriction.
Am I wrong on any of this? I got downvoted but I'm not sure why.
Yes.
If you sell digital goods for use on an iOS device then you must also offer them via in-app sales, for the same price as you do elsewhere.
Since their app is only an iOS app, everyone will continue to buy via the in app purchases even if they did offer it online, and for each of those purchases they have to pay the Apple tax.
http://www.apple.com/pr/library/2011/02/15appstore.html
But this policy only applies to subscriptions, not to purchases. In particular:
>Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly).
does not sound like it is in any way compatible with the book world's agency model.
Edit: found an Ars Technica article here:
http://arstechnica.com/apple/news/2011/02/apple-responds-to-...
but it seems that this policy was unclear even at the time according to the terms, and it's certainly not enforced with the Kindle app, so it's unclear what's going on here.
That's pretty much the problem in a nutshell - the policy's unclear, and it's always unclear until Apple brings the hammer down. Not a good environment in which to try to build a business.
Books are explicitly included in that document.
I'd think there'd be an opp or two for someone to get in to publishing and selling just ebooks not owned by the big 6, but that market may be too small to try to nurture at this point.
I mean if I start selling ebooks in the corner at Starbucks they may tolerate that but when Starbucks gets into the ebook business there should be a huge red flag going off telling you that the rules will eventually change: either they'll disallow my ebook sales or demand a cut.
Another huge red flag is a business model based on buying egoods from a wholesaler and reselling them in another vendors shop.
Another question: why couldn't they continue as a reader app and a web app store run by a separate company? (the store licenses the DRM to the reader company) If the answer is that the business doesn't work without the legion of customers the app store brings to the door that's another red flag.
Luck for Apple they aren't dominant in ebooks. If they do the same thing to iTunes competitors (and it looks like they might), they could be in real trouble with regulators.
When you read a paper book, you can be certain that the content in it is the same as when it was printed, and hasn't been edited or censored since you bought it. It can't be taken away from you by the publisher, except by physical force. You can resell it at will. Publishers and retailers who wants to try different pricing strategies can do so without facing the powerful control of Apple or Amazon.
I plan to keep on reading ebooks, but I'll buy the books I actually care about in physical form.
a) accessible and buyable by me (Linux, .nl based) b) at least as easy to find and get as pirated material
I will immediately buy. In all other situations: I am not going to fiddle with drm-ripping python scripts, convertors, virtual-machines, geo-ip-faking-proxies and so on, just to be able to pay for stuff that I can get without all that hassle for free.
I even track down authors for books I like and wire them the money personally, if for some reason their publishers hide behind all this DRM nonsense.
In general I'm with you though (Germany, mostly on Linux as well) and I try to do something similar whenever possible.
Now that's cutting out the middleman!
I have a Nook and I do not buy any books through B&N.com, only direct from technical publishers that are DRM-free and then load the epub file via USB. In fact I only turn my network connectivity on about once a month to update the clock on the device.
They knew the risk when the appstore was launched, the only exit strategy was acquisition by a established publisher or seller, which did not materialize.
Apple is a thought leader, Android and others just copy their policies, so expecting the margins on other platform is not viable on longer term.
If I was CEO of iFlowReader I would retune the business models for current realities, tying up with self book publisher like lulu, xlibris, who can offer 50% margins on ebook sales.
The author attributes the agency model to Apple, which I think is understating the role of the publishers, who would have rejected it if it hadn't been very much in their own interests. Expecting the publishers to keep giving you outsized discounts[1] for no reason but inertia was a mistake. Even Amazon couldn't keep that gravy train rolling. The market was begging for a shaking and Apple shook.
[1]:Does this sound stable? "There is no comparison between the retailers’ costs and risks associated with physical books and those associated with ebooks. There is no economic justification to providing the same level of discounts. But that’s where we are." That's from April 2009. -- http://www.idealog.com/blog/ideas-triggered-by-amazon-buying...
This is because it was Apple that devised the Agency Model and was the first to propose it to the Big Six publishers as a way of getting them on iOS. This led to Macmillan battling with Amazon one infamous weekend and had Amazon retaliate by removing all Buy buttons from Macmillan books. Amazon soon capitualted, other publishers -- except for Random -- piled on, moving to the Agency Model. When Random finally joined, all their books went up anywhere from $2 to over $7 in price.
"....which I think is understating the role of the publishers, who would have rejected it if it hadn't been very much in their own interests."
Apple just gave them a better deal than the one Amazon was willing to fight dirty to maintain.
Now iFlowReader claims to offer a more compelling interface, so pivot and find a way to sell the reader software either to end-users who can import their already-purchased ebooks or license it to the publishers. Offer branded versions of the software to the publishers if it's that good and charge the publishers based on a percentage of the gross purchased through the software, which should be quite easy to track.
Why would anyone who has paid any attention to Apple, depend on their goodwill?
So far their greed has been tolerated due to an early iOS lead on app-profitability. Now that the iPhone is getting (severely) dated with next to no advantages to bolster, and with Android overtaking iOS in every way (including the one which counts: marketshare) I can't see this holding up for very long.
Soon enough enough people will say "Fuck Apple" and just head to Android, leaving iOS as a niché market. Why develop for 10% of the world's smartphones when you could be doing 80%? Even if Android customers were 400% less willing to buy apps (and no, no current market trends indicate that is the case), Android would still be more profitable to developers.
Apple is doing some serious gambling here, and I honestly don't think it will play out to their advantage.
Don't get me wrong, I'd love to see more Android developers. I just don't think it's very likely until and unless Android picks up more steam...and that probably won't happen until the Android App store is as saturated in iOS's.
As a consumer I want less people between me and the actual producer of the work so another intermediary going out of business bothers me not at all.
My ideal world is that I buy a novel direct from an author, perhaps paying a small commission to a single intermediary. Author to publisher to iFlow to Apple to me isn't efficient.
Yes there is an issue here with how Apple and the publishers behave but there is also a significant issue with how much value iFlow were adding in exchange for their cut. A slightly different (maybe better) reader simply isn't worth the 30% they seem to be planning on.
I really don't see where 'efficiency' comes into it?
In essence the iFlow USP seems to be their reader app - everything else was being done by someone else either the same or better. How is that seriously going to a warrant 30% cut (which is what they were getting from the publishers) in the face of greater choice and likely better prices from Amazon and Apple?
Selling books from large scale conventional publishers is a bulk market right now and if you can't answer the question "how do I compete with Amazon?" you're in trouble and "a nice reader app" simply isn't a good answer.
Because the Agency price-fixing model has led to eBooks not being priced by market forces but by a cartel that supplies over 90% of the existing market.