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.
34 responses to ““Apple Screwed Us,” Says iFlow Reader Devs”
For some reason I have a hard time feeling bad for “middle men” Change your business model or get out of the business.
Isn’t it ironic that the developers of a reading app have no reading comprehension abilities? Because the 30% thing was in the contract that they (theoretically) read when they signed on as developers, from the very first day.
I was going to say the same thing. “Middle man” business propositions are always this way even before the digital age. You stand to make a killing in some cases, but you have no control and thus can be in danger of losing everything at any moment.
and who the f spends over $1,000,000 developing a READING app… doesn’t seem smart
And between the content producer and the consumer, Apple is what exactly?
Being digital only allows the middleman (Apple) to lock itself in and others out. The power that gives Apple should hardly be welcomed.
iboys start defending
Apples model is that the iPad is the Mall (they the developer) and if you want a shop (App) in the mall that sells goods to make money, then they want a cut. iFlow made an app (store) now they want to sell stuff but not pay the mall.
What Apple has done, is taken a physical model and applied it to electronic media, and forced a mind shift in consumers and the stores they interact with.
The other option is subscription; you pay your cable supplier to give you bandwidth to set up your cloud store, so they get their cut from your traffic.
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However, recent changes to the Apple charging structure, combined with publishing industry tactics, meant it was selling books at a loss.” I don’t think it was just Apple’s doing here. They had other options such as raising their prices to publishers but that also was as unlikely as Apple reducing their cut.
I can’t understand why they don’t just remove the in-app purchases and sell books externally like Amazon and B&N do. There are a number of ereader apps on iOS, from both large and small companies that seem to be doing fine, but they don’t sell titles inside the app.
What is with that stupid FB thing at the end of all your posts, CoM? I come to this site because of the lack of ads in the posts and little ads elsewhere. Now you put a huge annoying thing to get through? And as soon as I start to type, I see this:
“Try this! Mention other people by typing @ then his or her name. Tab to autocomplete. Mentioned people will be notified via email or Twitter.”
Which is okay, I guess, but why does it have to block my writing? Fix this, guys! There is no excuse!
So port it to Android and Windows Mobile. I think Apple is being pretty anti-competitive in this, but it’s no excuse for putting all you eggs in one basket.
The app is free. They don’t make their money off of the app. They make money by selling things within the app. This doesn’t go into affect until June 30, it was announced Feb 2011… So unless the app store wasn’t realeased until 2011 this was not in place when they signed up..
kind of like Twitter and Facebook, right?
Apparently the new rules say that if you have your own independant stores outside of the Mall you not charge less for your books there. You cannot charge more for the books that you sell in the Mall to cover the cost of the rent.
I fully agree. Apple is like any other company. The goal is to make money. As A middle man, what did they think was going to happen. When you can make more money by cutting out the middle man then that’s what you do. It’s not Apple’s job to keep your business a float just cause you made an app. What did they think would happen? If they thought Apple was only going to stick with music and movies and never move into any other media…… Well that’s just dumb. I don’t feel bad for them at all. Develop the next “Angry Birds” and shut up.
What will happen to Zinio?
Exactly. They’re more than welcome to take their idea over to a different platform or even develop a webapp if they wish.