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iFlowReader to close, blames Apple e-book policies

updated 10:55 am EDT, Wed May 11, 2011

Smaller sellers being squeezed out, company says

iOS app and e-book vendor iFlowReader is shutting down as of May 31st, according to an announcement. "We absolutely do not want to do this, but Apple has made it completely impossible for anyone but Apple to make a profit selling contemporary ebooks on any iOS device," part of the statement reads. "We cannot survive selling books at a loss and so we are forced to go out of business. We bet everything on Apple and iOS and then Apple killed us by changing the rules in the middle of the game."

The problem, according to iFlowReader, is that Apple has adopted an agency model for e-books, which in turn has been implemented by the major publishers. "Agents" -- such as iFlowReader -- are required to sell books at a price set by the publishers. Because agents currently only get 30 percent of the commission on a book, and must then pay another 30 percent to Apple, small booksellers are being squeezed out of the market, iFlowReader argues.

The company points out that on March 1st, Random House became the last of the big publishers to switch to the agency model. On February 28th all Random House titles disappeared from iFlowReader's store, only to appear on Apple's iBookstore the following day. Until that point the company notes that it was still getting a standard 50 percent discount on books it would put up for sale.

"What sounds like a reasonable demand when packaged by Apple's extraordinary public relations department is essentially an eviction notice to all ebook sellers on iOS," the iFlowReader statement continues. "After over three years of developing products for iOS during which we had over six million downloads of our BeamItDown iFlowReader products, Apple is giving us the boot by making it financially impossible for us to survive. They want all of the eBook business on iOS and since they have the unilateral power to get it, we are out of business and the iFlow Reader is dead.

"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."

Apple's competition for e-books is now mostly limited to Amazon, which avoids the brunt of the issues mentioned by iFlowReader by selling books through its own Kindle platform. In the Kindle iOS app, books are simply synced with a person's Amazon account.








by MacNN Staff

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Comments

  1. ggirton

    Joined: Dec 1969

    -4

    Boo hoo

    NO one could have seen THAT one coming.

  1. mdporter

    Joined: Dec 1969

    -1

    file a lawsuit

    Sounds like these guys should file a lawsuit if they were doing business under a legal framework.

  1. eclux

    Joined: Dec 1969

    +4

    hardball world

    Hopefully iFlowReader's business was profitable quickly and this is simply about that now stopping and their talents being applied to a new project. If their plan was not to show a profit for many years, or to be bought by Apple or someone, then they took a calculated risk and lost. The history of the Apple ecosystem is littered with Mac developers who suffered a similar fate -- developed a cool utility for example and then discovered a similar feature in the next major Mac OS release. Assuming the iFlowReader people did their homework, they knew the risks.

    I expect that Apple chose their words very carefully so as not to lie, but that the iFlowReader folks heard what they wanted to hear, like anyone would in that situation.

  1. Inkling

    Joined: Dec 1969

    -4

    The real situation

    Whoever wrote this article is clueless. The issue has nothing to do with agency pricing. Everyone is using that now, but only those who have ereader apps for iOS are being forced out of business. That's because Apple wants to grab 30% of the retail price for any ebook intended for use on iPads, iPhones, and iPod touches, however it is sold or read. That's virtually all the profit any bookstore would make, whatever the pricing system. Apple wants to apply the App Store model and the iBookstore model to every commercial ebook that goes on to their devices, even in the majority cases where they're offering no services to the seller or buyer.

    If there's a rationale for this beyond sheer greed, it's that Apple made a serious mistake allowing other to have ebook reader apps for purchased ebooks on to iDevices and they're now trying to end that. The problem they face is that some of these apps are far better products than Apple's own iBookstore, and they're multi-platform, unlike iBooks. At present, I can buy an ebook from Amazon and read it on Macs, PCs, iPhones and a Kindle, with all my bookmarks and notes synching between every version. Apple has nothing remotely similar and is giving no evidence it wants to catch up with Amazon enormous lead in features.

    The author's also clueless about the ebook market. Apple is a bit player, sitting in third or fourth place behind Amazon, B&N and perhaps Sony. Making remarks like, "Apple's competition for e-books is now mostly limited to Amazon" is ridiculous. Apple's ebook offerings are so poor, even a little outfit like iFlowreader was a serious competitor. That's why it had to be driven off the App Store.

    Sadly, the richer Apple gets, the greedier and less cooperative with others it seems to get. The real story here is that the developers of iFlowReader tried to work with Apple and instead got screwed by Apple.

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