Thursday, June 9, 2011

Apple's New Rules for Bookstores Match "Clarification" statement Feb 1. Update


   Every online news site has a different take on this, so I'll list the statements from Apple's  clarifications on February 1, 15 and March re Sony's new developer's app for iPad which was rejected by Apple due to the app including an  option to purchase books from Sony outside the app but VIA a link, In-App to Sony's online bookstore.

  (The proposed rules for Subscriptions were more onerous and have been softened today, but the new rules for bookstore-purchases that begin in-app are as explained by Apple earlier.

As reported for the 2nd time, in my blog article of February 24, 2011 which explained why I felt that Amazon Kindle books would remain readable by iPad owners no matter what (see details in that article):
What Apple has actually said about One-Off E-Bookreader apps so far and what it has said about Subscription-Content apps

. . .
[This is]  "a clarification" given by an Apple media rep about the reason for Sony's eBook-Reader app being rejected -- it was given in response to media questions:

In response to the Sony rejection on its e-reader app, Trudy Muller said, on February 1:
' "We have not changed our developer terms or guidelines," Apple spokesperson Trudy Muller told Ars. "We are now requiring that if an App offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase." '

  [That means an alternative option to purchase via Apple rather than just accepting an in-app option to leave the app to buy at the bookseller's store.  Again, this quote is for an e-reader app, not a subscription one.] '

 Compare that to the rule today (from All Things D's column by Peter Kafka, emphases mine) that will affect Amazon and its Kindle app:
' 11.13 Apps that link to external mechanisms for purchases or subscriptions 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.

11.14 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content.

  Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app. '

Their wording -is- clearer now but, in essence, no different from what Muller said February 1.

  The new rules say that a book-reading app can 'read' material purchased ... OUTSIDE the app AS LONG AS there's no button or external link in the app to purchase that content (as there is now, because Amazon does currently link to Safari to the book in the Kindle Store from within the app, and that can no longer be -- unless Amazon and Apple make a deal.

  Apple should deal, as much of the draw for their book-buyers with iPads is the ability to buy from Amazon's far greater selection of contemporary books and to read them ON Apple's iPad as well as on the Kindle or other device.

  What Apple said February 1 was that if there IS a button or external link IN THE APP to purchase an item outside, then the publisher would have to also offer an option to purchase that item from Apple INSIDE that app (and Apple would take what would have been an unseemly cut (100% of book-vendor profit for Big 6 ebooks).

  Many of us said, at that point, "Then don't have the external links to purchase." Kindle book owners mainly want to read their e-books on any device.
  That's the scenario we have today.

The terms for subscription publishers as described February 15 sounded worse.  Steve Jobs took the time to issue a statement at that time to 'clarify' the press release having to do with subscriptions.

2.  QUOTE FROM STEVE JOBS in that February 15 press release, the entire focus of which was on Subscription-content apps whether by publishers or subscription-content providers in general (the bracketed comments are mine]:
' Apple® today announced a new subscription service available to all publishers of content-based apps on the App Store℠, including magazines, newspapers, video, music, etc.  This is the same innovative digital subscription billing service that Apple recently launched with News Corp.’s “The Daily” app... [subscription-based, of course]
“Our philosophy is simple -- when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” said Steve Jobs, Apple’s CEO.

  “All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. '

3.  QUOTE FROM EDDY CUE ABOUT APPLICATION OF RULES RE SUBSCRIPTIONS, reported March 5, 2011.  (Subscription rules proposed were tougher-sounding and softened today.)
'...what Business Insider's Yarrow reports about a meeting between Berstein analyst Toni Sacconaghi and Apple execs during that week.

  The article's headline is "Maybe Apple's New App Subscription Rule Won't Hammer Amazon."  Excerpts:
' Apple's new in-app subscription policy might not affect Amazon after all.

Berstein analyst Toni Sacconaghi met with Apple execs last week and pressed them on how the new subscription policy would affect Netflix and Amazon.

Eddy Cue, Apple's Internet services boss, wouldn't comment on either company, but said, the announcement only applied to subscriptions.

Well, Amazon Kindle books aren't subscriptions, so they shouldn't be affected, no?

We've been pressing on Amazon trying to get a comment and the company is just ignoring us.  But, we think there's a chance that it's just not going to be affected by Apple.

Why?  Beyond Cue's comment, we've heard from a source that Netflix would not be affected by Apple's new policy.  We're not sure of the exact reason why, but it now seems reasonable to think it's because Netflix isn't a publishing business.

Don't forget Steve Jobs reportedly said in an email, "We created subscriptions for publishing apps, not SaaS ["software as a service"] apps." (Amazon, for the most part, isn't a publishing company.)

Another reason for Netflix to be exempted: Apple needs Netflix to make Apple TV a success, and keep iPad owners happy... '
Yarrow then speculates on the lack of comment by Apple re Netflix and Amazon and also on the silence from those companies on Apple's recent moves and reminds us that no one knows what will happen on all of this.  I'll repeat that Apple would suffer more from the Kindle app not being available on the iDevices since they WILL be on all the new Android devices and a real pull for consumers trying to decide on tablets in 2011.

But the statement by Apple's Eddy Cue is somewhat encouraging and a sign of sanity.  Signs are only signs though.

So, today the situation for Amazon IS as clarified Feb 1 by Trudy Muller while the new Subscription-Publisher rules omit the once-planned pricing-restrictions for subscription publishers.

  . Will Apple want something like 3-5% (rather than 30%, Amazon's total profit on a Big6 book) to allow Amazon a "BUY button" linking to the Kindlestore?

  . Will Amazon prefer to deprive Apple of the Kindle App for iPad if they can't have a BUY button linked to their store?  They'd have the app on all Android tablets, the Blackberry and HP Web OS devices as well as Windows Phone 7 and also on desktops.

  . (UPDATED to include this)   Amazon could even, actually, offer the option in-app WHILE charging the 30% 'share' Apple wants, on TOP of the book's cost to iPad-using book-buyers to buy it in-app. Apple could give those loyal iPad users some kind of bonus credit.

MOST LIKELY - but only likely
I think both Amazon and Apple profit from having the Kindle App for iPad (and iPhones/iPod Touch) and they'll work something out.

I read several of the articles today and feel that All Things D's Peter Kafka had the most knowledgeable view of all that's been involved.  He asks several good questions, explains how the various publishers may choose to comply (or not) and worries a bit re the Amazon app, but Amazon's book customers certainly know how and where to buy an Amazon book they want while on their iPads, etc.

Do read Kafka's full report today.  I'll be interested in any reader reactions although I'll be gone for about 8 hours and any Comments will be posted when I get back.

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  1. I have a question regarding the prohibition of the buy button/link: is it merely a prohibition of those apps that provide their catalogue in-app and simply push the buyer to the bookstore to complete the selected purchase, or does it prohibit all links to the bookstore? The wording above seems to target the first. Could Amazon get around the rules (or maybe even now is compliant with the rules) by just providing a link to the Amazon Kindle bookstore main page?

  2. K. Hugh,
    They've been linking to the book in the bookstore to make it easier for the customer to buy it and of course to sell it.

    Since the bookstore is a place where the book is sold, I imagine that Apple doesn't want a link to be made in the Amazon app itself to an external site where the customer can buy the book from Amazon unless Amazon's app also, then, provides the customer an option to buy it right there from Apple, who can take a cut that in essence, by Apple's usual rules, at 30%, would equal Amazon's entire profit on a Big6 publisher book

    But the companies will have to come to some working understanding that will suit both in order to have the reading app available on the iPad (or other Apple devices).

  3. Sounds like the only options Amazon has is to either
    a) remove the capability to buy content from the iXXXX Kindle app
    b) retract the iXXXX Kindle app
    c) hand over their entire operational profit to Apple (after spending a lot of money keeping track of which content was actually purchased through the iXXXX app).

    Personally, were I Amazon, I'd threaten to do b) while silently working on a) in case Apple doesn't cave in (which they're unlikely to do, as the entire goal of the exercise was to force their customers to purchase content solely through the iStore rather than from 3rd parties).

  4. [Sorry, the username is from a very old Blogger account.]
    I always find something useful on your blog -- thank you. However, when I read the title of this post I thought you were referring to a member of the House of Representatives because that's the most common meaning of "Rep" as an abbreviation, and I was expecting to read about possible antitrust legislation, for example. To learn that Ms Miller is merely a publicist is quite disappointing.

  5. It is quite annoying that for all of this 'clarification' all we still have is speculation. I truly hope that Apple is not working out 'special deals' that only apply to the Amazon's of the world; the policies should apply to all app publishers equally and they should be spelled out in the licensing agreement/guidelines.

    I think I'm going to ignore this story until some party actually does something....

  6. To my highly educated instructor :-)
    Sorry to disappoint. Yes, her name is not particularly well known. But what happened is that the more dire interpretations from different readings initially of what Apple and Muller said aren't happening.

    People worried that Amazon would be forced off iPad entirely unless they used an In-App Buy option.

  7. Tom,
    It's not exactly like gov't and 'equal rights' but there should definitely be a basic consistency of application (so to speak).

    As I said to Dedicated Instructor, people have worried quite a bit on forums everywhere that Amazon would be forced off iPad entirely unless they used an In-App Buy option.

    But they CAN opt to just be a reading app and if a user wants a book they do know where they can go get it.

    They can even, actually, offer the option in-app WHILE charging the 30% 'share' Apple wants, on TOP of the book's cost to iPad-using book-buyers to buy it in-app.

    But the worst fear is not a worry at this point. Really, Apple would lose more if the Kindle app left. Too many other devices would carry Kindle books and there would be less reason for serious book-readers to get an iPad then.


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