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Apple move raises doubts over Kindle app

16.02.11 | Philip Jones

Apple's decision to grab a revenue share from e-book purchases made via apps raises questions over the future of Amazon's Kindle app, according to media reports. As The Bookseller reported yesterday, the FT notes that Apple is now presenting Amazon with a choice. Either it withdraws its iPad Kindle app or it allows Apple to take a 30% cut of any Kindle e-book purchases on the iPad.

Removing all doubt about how it will treat e-books, an Apple spokeswoman confirms to MarketWatch that companies such as Amazon will be allowed to sell e-books from within their apps. But those sales will be subject to Apple’s fee requirements, which currently allow Apple to collect 30% of the revenue from such sales.

The battle is is made more intriguing for the FT by the individuals involved. It writes: "The Apple-Amazon standoff is intriguing because it involves two companies run by innovative, secretive, control freaks – Steve Jobs and Jeff Bezos. Mr Bezos’ response will be one to savour."

Business Week notes that "Apple knows that it has most publishers over a barrel, which is just where it had the music industry when the company first launched iTunes", but says that "Amazon may hold further options because it owns its platform, but magazine and newspaper companies are desperate to find some way to charge their readers".

The Wall Street Journal says Apple’s new subscription service includes a few terms that could draw antitrust scrutiny. It writes: "Publishers, for example, might claim that Apple dominates the market for consumer tablet computers and that it has allegedly used that commanding position to restrict competition. Apple, in turn, might define the market to include all digital and print media, and counter that any publisher not happy with Apple’s terms is free to still reach its customers through many other print and digital outlets."

All Things Digital reports that apps not up to speed with the new regs have until 30th June to comply. Here is a memo sent to publishers: “For existing apps already in the App Store, we are providing a grace period to bring your app into compliance with this guideline. To ensure your app remains on the App Store, please submit an update that uses the In App Purchase API for purchasing content, by June 30, 2011.”

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By datz

I think this report and the newspaper reports are innacurate. Apples position is if you make a purchase WITHIN THE APP then they want 30% that was the issue with the SonyApp. However Kindle purchases take place OUTSIDE the App but within the browser, so Apple don't take a cut. Kindle App redirects you to the browser when you click on the Kindle Store button.

Wed, 16/02/2011 - 11:56
By Philip Jones

I spoke to Apple and confirmed that how we describe it is accurate. Apple takes a cut of all in-app purchases, the Kindle app will no longer be able to direct to the Kindle store via the browser but instead will have to allow in-app purchases. However, Kindle users who buy via the Kindle store independently of the app will still be able to read content on the app, and Apple won't take a cut of that. All apps, including those already in use, will need to be compliant. Of course, that doesn't mean Amazon won't figure out a way of getting around it, and it is not clear whether a general link (to a website) will not be allowed. But as things stand, not.

Wed, 16/02/2011 - 12:42
By Philip Jones

And here is the relevant para from the Apple app guidelines:
AppStore guidelines: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.

Wed, 16/02/2011 - 14:02
By Simon

If you have out-of-app, you _must_ have in-app at the same price or cheaper too.

So the risk for the publisher / retailer is that the user opts for the In-app purchase (for convenience) rather than the Out-of-app, thus costing the publisher / retailer 30% of their gross revenues. In those circumstances, what sane publisher will want to offer in-app content purchase, book sales or subscription?

I think this is a highly inflammatory move by Apple that calls in to question the value of their platform over competing platforms that are not dominated by one single company.

Wed, 16/02/2011 - 14:22
By Anonymous

"So the risk for the publisher / retailer is that the user opts for the In-app purchase (for convenience) rather than the Out-of-app"

It's not a risk, it's a certainty. Convenience is King.

Wed, 16/02/2011 - 19:43
By Mcthew

An own goal by Apple methinks. In terms of turn-over they don't need to do this. It will just drive people further towards Android phones and tablets due to the suspicion of restricting freedom. I have both a kindle and iPhone yet I will not again purchase a book via iBooks nor will I purchase ebooks via their app-store. As for the next time I go for a smartphone I doubt it will be an Apple. Talk about cutting off your own legs during a marathon - idiots.

Thu, 17/02/2011 - 09:14

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