While a number of publishers ink special deals with Apple to bring their content to the App Store, Apple’s new in-app purchasing rules are forcing publishing middle men out of business. That’s the message from the creators of iFlow Reader, which just shut down.
“We put our faith in Apple and they screwed us,” Philip Huber of BeamItDown Software told users. The developer got squeezed between Apple’s demand for a 30 percent cut and other expenses. “Our gross margin on ebooks after paying the wholesaler is less than 30 percent, which means that we would have to take a loss on all ebooks sold,” Huber explained.
In a bitterly-worded letter, Huber tells of the effort put into the application hurt by Apple’s so-called ‘agency model.’
“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 with its unique AutoScrolling approach to reading that many of you really like,” he writes.
The app appears to be the first to fall victim to Apple’s subscription requirements it announced in February and puts into place June 30. It’s still unclear how booksellers Amazon and Barnes & Noble will respond to the demand for a 30 percent cut. Recently, Apple has inked deals with Time Inc, Hearst and Conde Naste, allowing consumers to buy big-name titles on the iPad or iPhone.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
