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BeamItDown Software, the company behind the popular iFlow Reader eBook application and store for iPhone and iPad, has announced that it will be closing down as of May 31st, citing Apple's recent enforcement of policies forcing content providers to offer content via Apple's in app purchasing mechanism at the same prices offered elsewhere. With that mechanism resulting in Apple taking a 30% of revenue, BeamItDown Software has determined that it is not possible for small eBook sellers to operate profitably given the squeeze of in app purchasing requirements and the agency model increasingly used by publishers that fixes sales prices.
The crux of the matter is that Apple is now requiring us, as well as all other ebook sellers, to give them 30% of the selling price of any ebook that we sell from our iOS app. Unfortunately, because of the "agency model" that has been adopted by the largest publishers, our gross margin on ebooks after paying the wholesaler is less than 30%, which means that we would have to take a loss on all ebooks sold. This is not a sustainable business model.
BeamItDown goes on to describe the steps it took during the development and rollout of the iFlow Reader application as it sought to ensure that it was on the right side of Apple's terms and conditions at a cost of over a million dollars.
We put our faith in Apple and they screwed us. This happened even though we went to great lengths to clear our plans with Apple because we did not want to make this substantial investment of time and money blindly. Apple's response to our detailed inquiries was to tell us that our plans did not infringe their rules in any way, which was true at the time, but there is one little catch. Apple can change the rules at any time and they did. Sadly they must have known full well that they were going to do this. Apple's iBooks was already in development when we talked to them and they certainly must have known that their future plans would doom us to failure no matter how good our product was. We never really had a chance.
BeamItDown's closure at the end of the month means that users who purchased content through the company's store will need to ensure that their content is backed up and downloaded to their computers for viewing through alternative software should the iFlow Reader software cease functioning on future versions of iOS, as the application will no longer be updated.
Top Rated Comments
That doesn't really answer my question. I understand that Apple charges for people to sell stuff through their store (IAP pretty clearly goes through their store). What I don't understand is iFlow seems to be acting like this has never been the case?
If they've found out their business model was poor, why not raise prices, or do like Amazon does and sell books outside of the reader app?
What changed in this situation that is making them so angry?
The problem is the sellers cant raise prices. Read the original article. The sellers have to sell at the same price in the app store as they sell everywhere else. Apple says its now against their policy. Basically, apple is telling the sellers how much they can sell their content for. That is RIDICULOUS.
lol Yeah. And Walmart gets a cut of everything sold in Walmart.
What facists!
This is no different. "But it's their own separate bookstore!" Yeah? You think those McDonalds in Walmarts pays Walmart to be there? You'd better believe it. You don't want to pay Walmart? Build your McDonalds outside in the parking lot.
You wanna run a bookstore and not pay Apple? Build your own device. That's what Amazon did and they seem to be doing well, so you can't claim it's impossible.
EDIT: Mind you, I don't think Apple's making the best choice here. I'd do it differently than they are. But they're doing the exact same thing thousands of other companies do. To call it evil or facist or illegal is really silly. It's perfectly normal.
How about this example. Airport space is very expensive. Have you ever been to a Mcdonalds at an airport? Theres no dollar menu and all the food is twice as expensive. What if the airport told Mcdonalds that they had to have a dollar menu and charge the same as every other Mcdonalds outside of the airport? It wouldnt be profitable. Apple should let the developers charge what ever they want for their apps.
Said it before and I'l say it again,
Apple's forcing of everyone to use THEIR store mechanism with their taking a SIZABLE chunk of the profits (such as the 30% called out here) is an EXTREME conflict of interest and is VERY MUCH a monopolistic practice.
The shutting down of this alternative store is just more evidence to that end.
As an iOS device owner and a stock-holder... I am VERY displeased. :(
Cometition is a GOOD thing Apple, and forcing everyone to adhere to your facist rules and regulations is doing nothing to further competitiveness, foster creative competition or drive the cutting edge of technology, ...but it is all about GREED.
No, not monopolistic. E.g., the answer to just this one question should make that clear:
Can you buy books from the iBooks store on your Kindle?
The Kindle is not made for with the same general expectation as an iOS device. It does one thing. That is an Apples and Oranges argument.
Can you buy Amazon books and iBooks on your mac? Yes. Would it be OK for Apple to take 30% of any of your purchases through your web browser on your computer or on your iphone or iPad?
Asking 30% of the purchase price of an app is one thing. 30% of all transactions on an iOS device thereafter is highway robbery, and the users of iOS are going to pay for it, either through higher prices or less choice. It is not in the best interest of Apple to enforce this model.
It's anti-trust territory. The fact that they once allowed it and then stopped it will only strengthen the case against them.
iFlow should be able to remove the purchase capability and sell through the web, but the way the police NOW reads, if you can buy it through the web, you must sell it through the APP (I believe for the same price) which forces people to add a commission for Apple if they want to participate on the platform. Its an inequity that is too steep and is predatory toward competitors who were doing business in another market (not computer hardware sales) prior to Apple getting into the book selling market.
Kindle's iOS and MacOS readers do not have sales capability and I agree that if they did Apple could require a commission (although it should be much less than 30%) To require, however, that the app does have sales capability so that they can make a commission forces people to sell through iOS which is in itself manipulative and predatory.
Mark my words, there will be a class-action suit if this stands.
Let the consumer decide should be the motto of the free market. This is taking the choice (of where to buy books) away from the consumer and will encourage gouging on the part of publishers.
I'm an Apple fan, but I think they are over-reaching in this case.
I smell a class-action lawsuit.
With the volumes that iphone and ipad are now selling and have installed user base, and the fact that they also have a vehicle to sell the content that these users were forced-out of selling, this may well be considered an anti-trust/monopoly move.
I have a kindle and I have an iphone and ipad. The kindle app allows me to use the iOS device when in a pinch, but I prefer reading on the Kindle..
It will tick me off if Amazon is forced into the same corner, but it seems to me, that Apple, by this policy, is over-stepping.. and I'm normally an Apple fan.
T
This might be the most absurd example I have ever read here.
YOU are absurd. That example is 100% exactly the same thing.