The Orange View (on hiatus) Because Apple is great but it isn't perfect

25Jul/11Off

Just how big a hit to Apple’s ebook competitors?

The Wall Street Journal's ebook beat report, Jeffrey Trachtenberg, has a round-up of companies hit by Apple's remaining iOS app subscription restrictions.

Recall that Apple initially announced back in February some pretty damaging and anti-competitive ground rules for any company that wanted to sell digital merchandise or subscriptions via an iOS app. Then in June, Apple backed down and did away with many of the worst bits.

But Apple still required that any app selling digital stuff  like ebooks or a newspaper subscription plan within the app itself give Apple a 30% cut. Otherwise, not only was selling digital content prohibited but even providing a link to buy stuff at a web site, as apps like the Amazon Kindle ereader did, was not allowed.

Today, Trachtenberg reports some buying links are disappearing:

Mike Serbinis, Kobo's chief executive, said Apple told Kobo Saturday that it could no longer operate its digital bookstore from its Kobo apps and had to stop selling e-books directly through them. Kobo subsequently altered the apps so that they no longer sell digital titles.

Now Kobo customers who want to buy digital books via their Apple devices will have to visit www.kobo.com via Apple's Safari browser to make their purchases, a potentially more laborious process for customers used to buying e-books directly through a Kobo app. Customers will continue to be able to access and read Kobo-purchased books from their library on various Apple devices.

Meanwhile, News Corp.'s Wall Street Journal, which has been circumventing Apple's payment system by providing links to its website from inside the iPad app, will soon remove all purchasing options in the app in response to Apple's new rules. People who download the app and want to subscribe will have to either call customer service or visit WSJ.com.

-Wall Street Journal, July 25, 2011

Warner Crocker over at GottaBeMobile then noticed an update to the Kindle app today also removes its buy links.

So now the question becomes, how much does this matter? Will the disappearance of convenient buying links in ereader apps motivate a significant chunk of non-Apple customers to start buying from iBooks? Will it convince publishers like the Journal and the Financial Times to sign up with Apple and start handing over 30% of their revenue from iOS customers? Opinions differ.

Publishing consultant and blogger Mike Shatzkin is in the major impact camp, saying iBooks "is about to be a much more significant competitor." He explains:

I have been guilty of a publishing-centric view of the possibility that Apple would enforce the rule that leads to this change since it was first prominently rumored last February. That is: with wishful thinking, when I first heard about this possibility six months ago I thought they wouldn’t do it. I talked myself into believing that because Apple had benefited substantially from the presence of the book apps on their platform, and because there are millions of us who read ebooks on our Apple devices with a distinct preference for using other readers and other ebook stores, that Apple would not enforce the rules which, through a couple of iterations of clarification, say that the way these apps and stores operated was outside their rules.

I will try to remind myself not to be making that mistake again.

-The Shatzkin Files, July 24, 2011

But Matthew Miller of ZDNet's Mobile Gadgeteer says "it isn’t that huge of a deal to use a web browser and purchase ebooks from these stores, but it does add another few steps." He thinks it may drive people to buy more dedicated ereaders like the Nook and the Kindle.

And Tim Carmody at Wired.com went even further, arguing that Apple's bold move would make its multiple enemies break bread together.

Publishers now have a much better reason to partner with Amazon in addition to or rather than Apple for periodical sales. Periodicals used to be completely absent from Kindle’s iOS apps. I’m sure that wasn’t Amazon’s decision — publishers didn’t need Amazon to easily get their content on the iPad.

Now, Amazon looks a lot more attractive. Also — sotto voce — if more customers start using Kindle to read The Economist (or whatever) on the iPad, why wouldn’t they read the same media on a future Amazon tablet — that mythical device that has now unofficially claimed the “Unicorn” mantle the iPad had in 2009?

-Wired.com, July 25, 2o11

Commenters over at the excellent ebook-oriented web site Teleread, so far are coming down on the minimal impact side. I'll update with more commentary as it comes in.

 

 

 

 

Posted by Aaron Pressman

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  1. My opinion:

    1. A limited hit to existing customers, except those angry at the removal of the store link. Presumably those customers will learn that Apple is to blame at some point. The extra speed bump will presumably damp down some impulsive purchases, however (especially when compared to the situation on other platforms where there are fully integrated in-app stores).

    2. A significant hit to iOS-based customer acquisition. Besides the bad reviews in the wake of the link removal, if a potential customer downloads your app and has no idea what to do with it after that (they’re not going to psychically figure out that they need to go to a website and create account and … unless you help them out), they’re likely to move on to iBooks.

  2. Oh, I almost forgot the possible surprising twist for Amazon. The entire in-app purchase mess might make them a more complete and more attractive alternative to Apple for newspaper and magazine publishers. See:
    http://www.wired.com/epicenter/2011/07/sidestepping-apple-from-amazon-to-conde-companies-rethink-their-app-strategies/

    And, separately, having more companies looking at HTML5 as an alternative to iOS isn’t exactly good for Apple, either.


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