Amazon, B&N, Kobo: iOS aps to be pulled in June

[snipenekkid]

has anyone even considered this?? If Apple does indeed get it's 30% cut from these various apps and what not, ummmm, Apple is in California so guess what, CA sales tax on all purchases from California residents. I am very willing to bet money that the CA powers-that-be are salivating at this potentiality. Prior to this sort of scenario companies such as Amazon have no business presence in CA so CA residents, though we are all supposed to report and pay the taxes, never pay that sales tax. I am willing to bet that if these sales take place via Apple's iTunes store then BOOM it's a transaction that has taken place in California. Sooooo, long budget deficit, assuming Apple stays in business more than a few years longer. A pretty safe bet either way.

[stonetools]

@ Andrew H, Worldwalker

I think the difficulty is that both of you think of the IOS platform as purely an applications platform like Windows. Its not: its also a store. Similarly, the Kindle app isn't just a computer program: it's a store, operating within the IOS store. If you don't understand that, then you won't get it. Again, Apple wants exactlty only a cut of the sales made on its platform. Apple in fact said that it wants no cut of subscriptions or sales outside the IOS platform. Sales made outside IOS go 100 per cent to the seller.

Which is why Amazon, B&N, etc. have said that they will pull their apps come June 30.

I'm pretty sure they haven't said any such thing, and I bet they never will. We'll see come June 30.

[HansTWN]

Originally Posted by stonetools

@ Andrew H, Worldwalker

I think the difficulty is that both of you think of the IOS platform as purely an applications platform like Windows. Its not: its also a store. Similarly, the Kindle app isn't just a computer program: it's a store, operating within the IOS store. If you don't understand that, then you won't get it. Again, Apple wants exactlty only a cut of the sales made on its platform. Apple in fact said that it wants no cut of subscriptions or sales outside the IOS platform. Sales made outside IOS go 100 per cent to the seller.

I'm pretty sure they haven't said any such thing, and I bet they never will. We'll see come June 30.

What you have forgotten is that Apple tries to make it extremely easy for users to purchase in app (i.e. through Apple with them taking a 30% cut) and very difficult to purchase outside. Thus a lot of users would just buy Kindle books through the Kindle app. And Amazon and other ebook sellers CANNOT AFFORD to sell through the Apple system. It makes more sense to quit then to lose big on every sale. Rumors circulate about further restrictions to using content bought outside. Sure, it is all within Apple's rights. It just is a greedy and stupid move, a slap in the face of users and partners.

Sure, we will all see how it plays out. Apple cannot afford to lose all these valuable content providers. But every prudent prospective Apple buyer (for the purpose of reading books, newspapers, and magazines) will put his or her purchases on hold until the smoke clears. Coming March 2 we will probably know more.

[Horemheb]

Originally Posted by stonetools

I think the difficulty is that both of you think of the IOS platform as purely an applications platform like Windows.

This is just twisting the words. Apple hardware + iOS + AppStore is only a platform just exactly like Windows PC-s, Android phones Blackberry phones and any other platforms. It is a hardware running a software which makes it possible for you to run other softwares. It is as simple as that.

Now Apple wants to extort money from an existing and thriving business without any added value whatsoever. Apple wants to do exactly nothing for the money. This should not be allowed in itself on principle but it should not be allowed also because it would screw all customers (not just Apple customers) by increasing overall prices.

It is obvious to anyone who is not an iCult member or Apple worker that Apple's plan is highly unethical and is against the interest of ALL players except Apple (authors, publishers, retailers, CUSTOMERS). It is so obvious that it is extremely unethical that authorities started to examine it because it may be even illegal.

[david_e]

Originally Posted by Horemheb

Now Apple wants to extort money from an existing and thriving business without any added value whatsoever. Apple wants to do exactly nothing for the money. This should not be allowed in itself on principle but it should not be allowed also because it would screw all customers (not just Apple customers) by increasing overall prices.

It is obvious to anyone who is not an iCult member or Apple worker that Apple's plan is highly unethical and is against the interest of ALL players except Apple (authors, publishers, retailers, CUSTOMERS). It is so obvious that it is extremely unethical that authorities started to examine it because it may be even illegal.

The 'added value' that Apple is bringing to all of the vendors who want to sell on the iPad is the Apple customer, those of us who live in an all-aluminum-and-shiny-white-plastic world. The idea of everything being done within app, within the 'walled garden', and payed for via our Mac account is exactly what we are used to, what we expect, and what we want. That is how we buy music and audio books for our iPods, movies and TV shows for our Apple TVs, and how we will buy books and magazines for our iPads. And, if you believe all the drivel, we have more money than most and are used to overpaying.

Most companies would kill for customers like this (us ).

As for doing nothing for the money, they are providing the platform that will bring NEW customers to these merchants. Without an iPad would a Nook user buy a book from the Kindle store or vice-versa? And what about the people who did not have a dedicated reading device before but now have one that can read anything from anyone? This is a brand new customer base for ebooks and their sellers that Apple has created with the advent of the device and platform.

I don't think we will see price increases at all. The big sellers are all going to participate because none of them can afford not to participate. Do you see Barnes and Noble walking away and leaving this entire market to Amazon? They can't afford to because they would also be risking the loss of their current customer base. If I've got a Nook and an iPad but can't buy/sync Nook content but I can buy/sync Kindle content what am I going to do? If I need multiple devices and sync I'm getting rid of my Nook and replacing it with a Kindle. Amazon can't leave the market to B&N because they would basically be propping up their own biggest competitor, a competitor with financial troubles that need this new market and technology to save them from eventually going under. And both of these companies are probably more than willing to see no profit, if not a loss, on their iPad sales as long as they see their iPad presence lifting their direct website sales.

Once other similar tablet devices launch and the vendors are also selling on these platforms the Apple percentage becomes even less important. The vendors should have increased sales overall even if their profit margin is a bit less. The iPad app simply becomes like that very, very expensive corporate B&M store that may not sell enough to meet expenses but makes up for it in PR.

While you may feel their methods or motives are unethical, they are in business for one reason, to make money, to make all the money they possibly can, for themselves, for the company, and for their stockholders.

[Horemheb]

Originally Posted by david_e

As for doing nothing for the money, they are providing the platform that will bring NEW customers to these merchants.

New customers? That is just not true. At least not one bit more true than Windows PCs bringing new customers, Android phones and tablets bringing new customers and Blackberry devices bringing new customers. Apple's platform is only one of the many. Nothing makes it special from the content business point of view. So it is clear that Apple makes exactly NOTHING for the claimed money.

I don't think we will see price increases at all.

This is just outright mathematical nonsense. Currently the cost of content is:
Cost1 = Author + Copyright owner + Publisher + Retailer

If Apple succeeds in his unethical (and possibly illegal) plan then the cost of content will be:
Cost2 = Author + Copyright owner + Publisher + Retailer + Apple

Simple math tells us Cost1 < Cost2.

Who would pay the higher costs? Mostly the customers and somewhat the authors. The very two players who are the reasons of the existance of this whole business in the first place.

The big sellers are all going to participate because none of them can afford not to participate.

We'll see about that. They cannot afford to increase prices either so it is much more probable they will let Apple pull the plug on them.

Do you see Barnes and Noble walking away and leaving this entire market to Amazon? They can't afford to

Of course they can. Whichever player leaves can provide much lower prices than the one staying in Apple's cage. That is a decisive advantage.

While you may feel their methods or motives are unethical, they are in business for one reason, to make money, to make all the money they possibly can, for themselves, for the company, and for their stockholders.

That is right, they want to make money. A sane and healthy society however will nevel let anyone to extort money from people and other organizations with nothing provided in turn. There are lot of companies who try to make money without providing anything useful to the society and there are ones even doing damage to society. They need to be stopped however this is obvious.

[stonetools]

Let me try again

This is just twisting the words. Apple hardware + iOS + AppStore is only a platform just exactly like Windows PC-s, Android phones Blackberry phones and any other platforms. It is a hardware running a software which makes it possible for you to run other softwares. It is as simple as that.

If that’s your understanding, its an outdated one.
Let’s look at Amazon. Amazon started as an online retailer of books. Yet now its building hardware devices ( Kindles) and various software programs. Why did it get into the hardware and software business? Was it so it could sell more books? DING DING DING.
Amazon built the Kindle for one major reason –to sell more ebooks. The Kindle therefore is not just hardware-it’s a store, a very good store, one that runs 24/7/365, that goes most places the customer goes, and that doesn’t require building rents or staffs.
In that same way the Kindle IOS app isn’t “just a software program”- it’s a store, just like the Kindle and just the brick and mortar store in a mall. It’s a retail channel and a profit center for Amazon that exists on an IOS device.
I think a lot of folks here plain just don’t understand the importance of having the right retail channel. It is vital for the success of a business. Businessmen understand that, which is why they are happy to pay for access to the right retail channel .And Apple has proven to be an excellent retail channel, which is why merchants are fighting to get on the IOS platform and why developers are fighting to jump through hoops to get into the App Store.
A lot of people think middlemen like Apple “add nothing” to a business. Just make a good product and people will find their way to the business. That’s just dead wrong. Think of the Nexus One. Remember? Google was going to redefine the cell phone business by selling an unlocked, unbranded cell phone featuring stock Android on its website. Geeks everywhere rejoiced. No branding, no crapware, same day OTA updates unlimited ability to customize your device-what could go wrong? Google opened its website and- nothing. Nobody bought it. The Nexus One was a huge commercial flop.
Now Google is trying again-through partnership with T-Mobile-an established retail channel. Lesson learned.
Apple is “adding something” a providing a smoother retail experience, better privacy and of course the vaunted Apple marketing muscle. Anti-Apple folks who constantly complain of the irresistible Apple marketing machine seem to think that it counts for nothing here. Funny that.
A number of magazines have signed up with Apple and are being pushed front and center in the App Store. I expect shortly there will be commercials ( “Want to read the latest and greatest in fashion in your Ipad? There’s an app for THAT”) If we see a surge in subscriptions, then we will see the 30 per cent model spread. If not , Apple will not extend it to ebook purchases.

[Andrew H.]

Originally Posted by stonetools

@ Andrew H, Worldwalker

I think the difficulty is that both of you think of the IOS platform as purely an applications platform like Windows. Its not: its also a store. Similarly, the Kindle app isn't just a computer program: it's a store, operating within the IOS store. If you don't understand that, then you won't get it. Again, Apple wants exactlty only a cut of the sales made on its platform. Apple in fact said that it wants no cut of subscriptions or sales outside the IOS platform. Sales made outside IOS go 100 per cent to the seller.

I understand that that's how Apple wants things to be. My point in the earlier post is that this is *new* and *unusual*. No one expected this, and Apple certainly did not signal this change.

I'm pretty sure they haven't said any such thing, and I bet they never will. We'll see come June 30.

Yes, we'll see in June. They will pull unless Apple caves. Do the math and explain how they can profit otherwise.

Originally Posted by david_e

The 'added value' that Apple is bringing to all of the vendors who want to sell on the iPad is the Apple customer, those of us who live in an all-aluminum-and-shiny-white-plastic world. The idea of everything being done within app, within the 'walled garden', and payed for via our Mac account is exactly what we are used to, what we expect, and what we want. That is how we buy music and audio books for our iPods, movies and TV shows for our Apple TVs, and how we will buy books and magazines for our iPads. And, if you believe all the drivel, we have more money than most and are used to overpaying.

Most companies would kill for customers like this (us ).

Kindle owners have higher incomes than iPad owners.

As for doing nothing for the money, they are providing the platform that will bring NEW customers to these merchants. Without an iPad would a Nook user buy a book from the Kindle store or vice-versa? And what about the people who did not have a dedicated reading device before but now have one that can read anything from anyone? This is a brand new customer base for ebooks and their sellers that Apple has created with the advent of the device and platform.

I don't think we will see price increases at all. The big sellers are all going to participate because none of them can afford not to participate. Do you see Barnes and Noble walking away and leaving this entire market to Amazon? They can't afford to because they would also be risking the loss of their current customer base. If I've got a Nook and an iPad but can't buy/sync Nook content but I can buy/sync Kindle content what am I going to do? If I need multiple devices and sync I'm getting rid of my Nook and replacing it with a Kindle. Amazon can't leave the market to B&N because they would basically be propping up their own biggest competitor, a competitor with financial troubles that need this new market and technology to save them from eventually going under. And both of these companies are probably more than willing to see no profit, if not a loss, on their iPad sales as long as they see their iPad presence lifting their direct website sales.

Once other similar tablet devices launch and the vendors are also selling on these platforms the Apple percentage becomes even less important. The vendors should have increased sales overall even if their profit margin is a bit less. The iPad app simply becomes like that very, very expensive corporate B&M store that may not sell enough to meet expenses but makes up for it in PR.

While you may feel their methods or motives are unethical, they are in business for one reason, to make money, to make all the money they possibly can, for themselves, for the company, and for their stockholders.

They will walk away because they can't make money on the iPad under Apple's terms. It's as simple as that.

And the iPad will lose the sales of those people for whom having an e-reader was important.

Originally Posted by stonetools

Let me try again


Apple is “adding something” a providing a smoother retail experience, better privacy and of course the vaunted Apple marketing muscle. Anti-Apple folks who constantly complain of the irresistible Apple marketing machine seem to think that it counts for nothing here. Funny that.
A number of magazines have signed up with Apple and are being pushed front and center in the App Store. I expect shortly there will be commercials ( “Want to read the latest and greatest in fashion in your Ipad? There’s an app for THAT”) If we see a surge in subscriptions, then we will see the 30 per cent model spread. If not , Apple will not extend it to ebook purchases.

Apple, of course, can sell iBooks and take 30%...the same way that that B&N and Kindle do. However, the latter two can't take their 30%, give Apple *another* 30%, and still earn their 5% margin. Unless they mark their books up 43%, of course.

That's why they will be dropping out.

And you've pointed out the benefits that Apple brings (i.e., a demographic somewhat less affluent than the Kindle demographic), you've left out what Amazon and B&N bring - 95% of the e-book market. And while there are people who read on the iPad, they seem to prefer to read on the Kindle app by a substantial margin.

So there will be a cost to Apple. And I suppose a decent advertising boost for an Android tablet which points out that Amazon and Barnes and Noble are available on Android, but not on the iPad.

[Horemheb]

Originally Posted by stonetools

If that’s your understanding, its an outdated one.

Facts are never outdated.

I think a lot of folks here plain just don’t understand the importance of having the right retail channel.

I think - on the contrary to what you think about the "folks" here - most people understand trivial things. Like it is important to have an efficient retail channel.
You are the one however who fails to understand that for a lot of content it is Amazon and B&N who owns the retail channel not Apple. For e-books and magazines Amazon and B&N are the retailers. Which leaves Apple the role of ... what exactly? Yes, nothing.
The most obvious proof that Apple would add nothing to the business is the very fact that the business is working and thriving even now without Apple's "help". You can buy e-books and magazines from Amazon and B&N and you can read them on different platforms (including Apple's).
If you really think however that Apple adds value to the business of content providing then it will be very easy for you to answer all the 3 questions in this example.

[mewmartigan]

Okay,

I didn't read through this whole thread but here is my take:

Apple isn't going to pull the Kindle app because it doesn't do in-app purchases. When you click on the "kindle store" link inside the app, it takes you out of the app, to the web browser and to amazon's mobile site.

So in this case, Apple's questionable new policy doesn't apply.

[Crowl]

Originally Posted by stonetools

What will happen is that the agency model contracts will be renegotiated-something that happens frequently in business. Instead of the division being publisher 70/Amazon 30 , the split will end up something like publisher 60/Amazon20/Apple 20 . Remember, Amazon used to take 70 to publishers 30 prior to last year. That's what the negotiations will be about- a readjustment of who gets what percentage.
I must say, I'm rather touched by your solicitude for Amazon-a big company with an army of lawyers at their command. Trust me, the publishers and the booksellers will take care of themselves.

The publisher has no actual requirement to change their terms though and the net result could easily be the kindle app and many others being forced off the platform and while you want to try and mis-characterise this as people being so eager to stand up for one big company vs another that is just not what people are doing. The reality is that an ipad without a kindle, nook, kobo, etc. app is far less appealing to me as an ipad owner and that is why I think this move is such a bad one.

Incidentally, in your previous post you asked:

Originally Posted by stonetools

There’s not too much Apple love on this issue, is there? I think there are two issues here:

1. does Apple deserve a cut of the revenue from the sales of products on its platform
2. what should be the size of the cut.

My answers would be no and zero when they don't actually provide anything that a particular app wants or needs beyond the initial hosting of the app which they also force on people, they have already got their cut by the existence of these various apps helping to sell their hardware in the first place and if you don't think apps are a selling point for the hardware then you have obviously never seen a single ipad advert as they push the total and individual apps heavily in them.

A far more realistic thing for apple to claim would be a minimum fee for hosting any app and then offering the various payment options for those companies who wanted to use them meaning that they would only be making back their costs from those that they weren't actually doing anything for.

[stonetools]

Apple, of course, can sell iBooks and take 30%...the same way that that B&N and Kindle do. However, the latter two can't take their 30%, give Apple *another* 30%, and still earn their 5% margin. Unless they mark their books up 43%, of course.

That's why they will be dropping out.

@AndrewH , that 30 per cent applies to subscriptions at this point. We don't know as yet what the cut will be for ebooks-or even if there will be any cut at all. As I said earlier , that 70/30 publisher/retailer arrangement didn't come down on stone tablets from heaven. I can easily see an arrangment by which the division is renegotiated to say 60publisher/20bookseller/20 Apple. As to Apple not signalling this years in advance, things change in business and contractual arrangements change in response. Fifteen years ago Amazon didn't exist, Apple didn't make mobile devices, and Borders was the future of bookselling.

[Crowl]

Originally Posted by david_e

As for doing nothing for the money, they are providing the platform that will bring NEW customers to these merchants. Without an iPad would a Nook user buy a book from the Kindle store or vice-versa? And what about the people who did not have a dedicated reading device before but now have one that can read anything from anyone? This is a brand new customer base for ebooks and their sellers that Apple has created with the advent of the device and platform.

Apple already got paid for this by these apps helping to sell the hardware to you, this is not a one way street, they are already benefiting from what these companies are offering to owners of ios devices.

I don't think we will see price increases at all. The big sellers are all going to participate because none of them can afford not to participate. Do you see Barnes and Noble walking away and leaving this entire market to Amazon? They can't afford to because they would also be risking the loss of their current customer base. If I've got a Nook and an iPad but can't buy/sync Nook content but I can buy/sync Kindle content what am I going to do?

You are overlooking the obvious point that neither company could afford to stay on the platform because any continued success that resulted from theirs and other apps would actually increase their losses and it is better for them to get out now making the platform less appealing compared with the alternatives where they could still operate profitably.

Once other similar tablet devices launch and the vendors are also selling on these platforms the Apple percentage becomes even less important. The vendors should have increased sales overall even if their profit margin is a bit less. The iPad app simply becomes like that very, very expensive corporate B&M store that may not sell enough to meet expenses but makes up for it in PR.

How does it give them any pr benefit, it is not like an app being on the appstore would do anything for sales on the other platforms and given that it lost them money with each sale drawing attention to it on ios would be a bad thing since it would continue to aid that platform.

While you may feel their methods or motives are unethical, they are in business for one reason, to make money, to make all the money they possibly can, for themselves, for the company, and for their stockholders.

I am fine with them wanting to make as much money as they can and think that it is great for them to offer additional services to the companies that want to use them in order to improve the amount of content on ios devices, but as a consumer and not an employee or shareholder I feel no need to sit back and be happy about a change that could potentially make the product I already own worse than it currently is at the moment and quite frankly I am shocked at how many people seem so eager to stick up for apple over a move that is bad for the consumer.

Beyond the likes of amazon, nook and kobo being forced off ios, there is also the potential negative effect for those that stay e.g. the t3 magazine was a featured item on the appstore recently and one of the things mentioned as a popular in-app purchase was a sub that worked out at £2 an issue while currently it is more like £1.60 an issue from zinio so either the latter will be forced to increase prices or be forced off and neither is good for me as a consumer.

[Crowl]

Originally Posted by stonetools

I think a lot of folks here plain just don’t understand the importance of having the right retail channel. It is vital for the success of a business. Businessmen understand that, which is why they are happy to pay for access to the right retail channel .And Apple has proven to be an excellent retail channel, which is why merchants are fighting to get on the IOS platform and why developers are fighting to jump through hoops to get into the App Store.

It stops becoming a good platform when it costs companies money every time they make a sale on that platform and your continued existence on the platform leads to higher sales of that platform and thus higher losses for yourself, that isn't a business model it is a suicide note.

A lot of people think middlemen like Apple “add nothing” to a business. Just make a good product and people will find their way to the business. That’s just dead wrong. Think of the Nexus One. Remember? Google was going to redefine the cell phone business by selling an unlocked, unbranded cell phone featuring stock Android on its website. Geeks everywhere rejoiced. No branding, no crapware, same day OTA updates unlimited ability to customize your device-what could go wrong? Google opened its website and- nothing. Nobody bought it. The Nexus One was a huge commercial flop.
Now Google is trying again-through partnership with T-Mobile-an established retail channel. Lesson learned.

Incorrect, the actual lesson they learned was that in the mobile business the most important customer to a handset maker are the carriers and you can't afford to ignore your biggest customers without a very good reason.

Apple is “adding something” a providing a smoother retail experience, better privacy and of course the vaunted Apple marketing muscle. Anti-Apple folks who constantly complain of the irresistible Apple marketing machine seem to think that it counts for nothing here. Funny that.

What do they add to say the kindle app beyond hosting of the app, which also benefits apple since it is a far more comprehensive selection of books than the lacklustre and locked-in ibooks.

A number of magazines have signed up with Apple and are being pushed front and center in the App Store. I expect shortly there will be commercials ( “Want to read the latest and greatest in fashion in your Ipad? There’s an app for THAT”) If we see a surge in subscriptions, then we will see the 30 per cent model spread. If not , Apple will not extend it to ebook purchases.

Nobody is saying that apple giving more options and offering more services is a bad thing, the issue people as consumers have when they are not being some internet white knight for apple is that it will result in hardware they have already paid for will become worse by this change in policy, simple as that.

Using the magazine example, if they see more sales then they will be happy, but for existing companies such as the ebook companies, music streaming companies etc. they will be losing money per any apple-related subscription so promotion would just make the issue even worse for them since more subscribers would mean greater losses since if the in-app options are as good as you claim then surely they won't have any way to convince people not to use it.

[stonetools]

You are the one however who fails to understand that for a lot of content it is Amazon and B&N who owns the retail channel not Apple. For e-books and magazines Amazon and B&N are the retailers. Which leaves Apple the role of ... what exactly? Yes, nothing.

Er, I'm sorry Apple is doing... nothing? Apple built the devices on which the ebooks are read. Apple marketed these devices-so successfully that they have sold 160M of these devices, creating a huge market for ebooks. These apps that read and more importantly, sell these books are distributed through the Apple's App Store and hosted and updated by the App Store. All that is....nothing? I'm going to be blunt-I just don't think you understand how business works.
Now there are lots of businesses that thrive without Apple's help-like, for example, the business of growing turnips. That's completely irrelevant to the the issue of whether Apple should get a cut of sales made on IOS devices for use on IOS devices I can gaurantee Amazon and B&N are certainly negotiating hard to stay on the IOS platform and would be willing to pay a cut. Hell, GOOGLE is looking for cut (10%) of products sold on the Android platform.