Apple goes from savior to overlord with new app purchase enforcement

ipad-LEAD01.jpgApple’s app stores — the middleman of all middlemen — have been the target of a stampede of old media magazines, newspapers, books and comics as the vehicle for sales in the new digital era. But several recent moves make it clear that Apple isn’t in this game as a helping hand for anyone. Or, to put it in a more neutral light, Apple is a PARTNER, not a platform.

The uh-oh feeling started yesterday when it was revealed that Apple had rejected Sony’s e-reader app. This app, like the Kindle, Nook, and other “storefronts”, sent buyers to a website where they could make purchases without incurring Apple’s 30% fee.

But Apple isn’t so keen on this end run. And Apple is STRONG.

“We have not changed our developer terms or guidelines,” Trudy Muller, an Apple spokeswoman, said Tuesday. “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.”

The requirement may signal a shift for Apple. The company has made more money selling hardware than music, e-books or apps. If people could have access to more content from more sources on their iPhones and iPads, the thinking went, then they would buy more devices.

The move is also surprising, as Apple has indicated recently that it would be more collaborative, not less, with magazine publishers and other content producers that want more control over how to distribute content on the iPad.


At the same time, Dark Horse suddenly announced their own digital initiative had hit unforeseen setbacks:

This past October at New York Comic Con, Dark Horse announced that we would be developing our own platform for digital comics distribution. We stated we would launch this exciting new initiative in January. However, factors beyond our control have impacted our plans and we are working to address these new developments. We remain committed to deliver on our promise to provide fans with the highest quality experience at a great price; consistent with the standards we have established over the last 25 years.


It doesn’t take a Batman to guess what these “factors” might be. In fact we were probably less surprised than many — Dark Horse’s low $1.49 price point per issue was a good selling point — but Apple doesn’t allow prices that don’t end in .99.

The story is all a bit hard to follow since it involves apps that let you buy things vs apps that takes you somewhere else to buy things. The bottom line is that Apple is now enforcing their existing guideline that says anything you read on one of their apps must also be available in the Apple store. So, if you bought Trashy Novel via the Kindle and then accessed it through the Kindle iPad app, you wouldn’t be able to read it unless it was also offered through an Apple-sanctioned store. This is kinda crappy, Harry McCracken suggests:

Well, that’s pernicious: If e-book sellers can’t let iPhone owners read books they’ve bought elsewhere, the whole idea of “buy once, read anywhere” crumbles. A Kindle app that could only pull up books bought in the App Store would barely qualify as a Kindle app at all. And Amazon might choose to opt out of selling books to iPhone users altogether rather than pay Apple a commission on each tome it sold.


According to Apple’s clarifying statements, Amazon and B&N will both have to change how their books are offered in order to be READABLE on your sexy, sexy iPad.

So what’s next for Dark Horse and others? Apple has a habit of saving face when held up to massive scorn (as in the Ulysses Seen matter) but this time dollars and cents are on the line. While we’re told this hasn’t yet affected the existing comics storefronts on iDevices, it does make reading your pirated, available everywhere pdfs look a lot more attractive.

LongBox’s Rantz Hoseley has long been suspicious of the “App interface” — obviously he has a vested interest as his business is browser- and software-based — but he’s not surprised to see friendly, cool Apple suddenly turn into a greedy landlord, he told us:

As you noted, this isn’t a big shocker, or a surprise to me.  Really, it shouldn’t be a surprise to anyone who has watched Apple’s approach to the App Store market for the last 3-4 years. It’s become very obvious that Apple expects everything done THEIR WAY, whether or not it is the best solution for users, content producers, or companies that want to partner with them.  

So, what does it mean?  It means at the very least, the margins for companies using the Apple channel are going to get worse/lessened. Let’s break it down into potential levels of ‘likely’ to ‘possible’ though.

Likely – As indicated by the missive with Sony, companies such as Amazon, B & N, etc would not be able to re-route users through a webfront store to purchase content.  All financial exchanges now have to occur through the Apple store e Commerce solution (and apple of course gets their cut).  But there is wording in the Sony news that gets ‘tricky’… This goes far beyond the Ebook world, affecting music, games, video, and yes… Comics.  What gets even scarier in terms of the potential consequence (and based on movements that Apple has been making) is the non-zero chance that ALL entertainment content, music, video, eBooks, and again… Comics… Will have to be sold and consumed through Apple’s store and ‘viewer/player’  This flies in the face of every prediction of where entertainment is going and how consumers expect to be able to access and enjoy their content… Even behemoths like Microsoft and Google acknowledge this and make it a key part of their new devices, but Apple seems more determined than ever to maintain their walled garden approach.

That’s not just comics mind you, and it’s not just ‘in the future’. Look at the sales and performance reports for magazines on the iPad over the last 3 months… They make comic sales look good by comparison, and they are suffering the same blows… Not being able to offer subscriptions, not being able to lower their price because of Apple’s cut, a production path that adds a non-trivial amount to each magazine’s ROI

If they DO take the most aggressive approach, I think eventually, it will backfire on them.  It isn’t what consumers want, and if it becomes a choice of ‘every device must be apple’ or ‘I can just access my content anytime anywhere’ the latter will win out by the sheer fact that the world is too big, and Apple puts too many restrictions on their content.

Forget my having a vested interest in digital comics for a minute.  As a fan and as a creator, watching the future of comics get hammered around because of short term mercenary tactics is heartbreaking.


If Apple’s content control wasn’t enough of a problem, these ongoing attempts to split a penny three ways are going to make publishing a lot harder.

Update:
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Comments

  1. Bye, bye Jobs says:

    Well, if this turns out to be the case, then I’ve done my last Apple purchase.

    Enough is enough, they are not irreplaceable.

  2. The Freaky Tiki says:

    Long live the LCS!!!!

  3. This attitude, and it really isn’t a new one, was a large factor in my going Android for a phone.

  4. Draconian rules like this always fuel one thing: Piracy.

    Consumers want their product the way THEY want want to consume it. If it’s not available, someone will come along and make it available.

    …this is very unfortunate. You’d think cooler heads would prevail, but this is Apple after all.
    (typed on my Macbook, btw)

  5. “Today, we celebrate the first glorious anniversary of the Information Purification Directives. We have created, for the first time in all history, a garden of pure ideology – where each worker may bloom, secure from the pests purveying contradictory truths. Our Unification of Thoughts is more powerful a weapon than any fleet or army on earth. We are one people, with one will, one resolve, one cause. Our enemies shall talk themselves to death, and we will bury them with their own confusion. We shall prevail!”

    Or maybe this is more appropriate?
    http://www.youtube.com/watch?v=PYP1Tjgt1Ao

  6. Well hallelujah — it’s about time the Emperor started wearing fewer clothes around here.

  7. @Torsten Funny how that became a self fulfilling prophecy.

    *note: usage of “funny” may vary.

  8. There’s a very popular app on the iPhone and iPad that Apple doesn’t take a cut of revenue from AND doesn’t need approval over the content of… it’s called Safari!

    Yet another plus for the “free” webcomics model. :)

  9. Problem is, Rantz’s “likely” scenario has already been shot down by Apple. Apple’s statement yesterday is that something has to be available in-app through Apple as well as through the web loophole Kindle, for example, has always used.

    In other words, Comixology is *completely* compliant with this already. I tend to buy comics through my iPhone just for the convenience, but read them on my computer, for the big screen. But I could go either way.

    And Apple just announced The Daily as a subscription magazine today, along with plans to announce subscriptions more widely available in the coming weeks. (John Gruber pegs it at two weeks, which sounds about right.)

    Look, I don’t want to see Apple approving every little thing that gets put on an iPad, either. If that happens, I’ll jump ship, too. But the tone of this article and the responses to it are walking a mile further down the road from the reality that we have right now.

    But, yes, we can all look forward to buying our comics outside of Big Brother via Longbox on ADAM Tablets, due out in stores — er, any month now. No, really. They’re coming. Unless they get re-engineered now to use the latest Android OS that just got announced today, which might take more time to program for. But, hey, it’s not like they weren’t already announced for sale last month, and the month before that… So it MUST be first quarter this time.

  10. The good thing about this, is that it will open up for better payment solutions on mobile web.

    For the needs of the comic book reading community, there is nothing that is currently being done in the native iOS comics apps that can’t be done using HTML5.

  11. As someone who doesn’t write PG13 or younger material (except maybe by accident), Apple’s insistence on driving all content to be consumed on their iProducts through their censors, rather than letting the user deal directly with the vendor, is getting really, really troubling. OK, they haven’t locked down PDFs via Safari or Mail, but those are crappy, crippled ways of distributing paid content. This really is analogous to the Code and the newsstand market: someone who isn’t the creator or the publisher, deciding what material gets to the primary market.

  12. I’ve always been an Apple fan, but this is short-sighted thinking. Invariably, the “walled garden” approach backfires. Remember how AOL used to try to keep all browsing “in house”? And where is AOL now?

    And how does this affect apps on the iPad like Zinio–which I believe does allow for magazine subscriptions off-site while the App Store only lets one buy single issues?

    I love my iPad, but I’d invest in another hardware device that’s more open–especially for comics.

  13. Oh, God. WHY WASN’T I BORN RICH?!?

  14. As the cartoonist of ULYSSES “SEEN” and creative director of our own small publishing company (thanks for the metion, by the way), I don’t think this news regarding Apple’s policy should come as a surprise to anyone. While most people were making our troubles with the app store into an issue of censorship last summer, I was really trying to point out that this is just a case of predictable business behavior; Apple is not a museum or a school or a “savior of a failing industry” but simply a general store in the frontier town of mobile entertainment. As such, they get to decide what to put on their shelves.

    Now they’re setting a policy that won’t let you put catalogs of your own products for sale on those shelves without giving them a cut.

    Why does this come as a surprise to anyone?

    Until new competative products actually do start hitting the market policies of this kind are likely to continue. We publishers and readers alike are going to have to decide if they’re willing to pay the kind of mark up on iPad compatible comics that the company demands.

    This isn’t an argument about access, after all. You can still browse the internet and buy products directly from private websites even over your iPad or iPhone. You just can’t use the app store, which is a “store” mind you, as a way to make sales that Apple doesn’t get a cut from. It’s a case of technological shift in how to make content mobile not who’s allowed to have it.

    And isn’t the iPad really a luxury item anyhow?
    -R

  15. There are other tablets out there…

  16. Jaylat says:

    Incredibly shortsighted, arrogant and offensive move by Apple. They are shooting themselves in the foot. I’d like to subscribe to the New Yorker on an iPad, but having to pay full price each week ($250 a year) is ridiculous. So I’m not buying the subscription, or the iPad.

    The solution in comics is simple – sell pdf versions online. The Comixology aps are idiotic anyway – who needs software to zoom in on panels for them?

  17. In Europe there’s a big hubbub about this too with all the newspapers threatening of pulling their iPad-papers or even shutting them down if Apple doesn’t budge.
    Politicians are getting involved too.

    I like Apple alot, but I’m not keen of making my comics available via apps. I’d offer them as .cbr or .pdf anyway.
    Screw comixology as well for instazoompanels!

  18. Augie, I’m not sure when Notion Ink Adam tablets will be in stores, but Notion Ink are selling their tablets via their website in limited qualities. Some people have already received the first shipment sent out. I guess they still need to ramp up production (they are a start-up) in order to get them into stores.

    That said, a huge number of Android tablets are set to come out this year. If smartphones are any indication it’s only a matter of time before Android tablets starts outselling iPads.

    However, iPads are still likely to have an audience too big to ignore. Others have mentioned moving out of the AppStore all together and just go with a website. Only problem with that is compared to an app, it’s hard protect the content. A website is easy to save the files, make copies of and share. (Although the vast majority of comics are already on bitTorrent sties).

  19. I am misremembering, but wasn’t it Microsoft making it easier to 3rd parties to work with their stuff the reason they beat the crap out of Apple back in the PC market back in the 80′s? Way to repeat history, Apple.

  20. “May be misremembering…” that is.

    And that is why my first hire will be an a copyeditor!

  21. Meanwhile, John picked up his old timey paper comic to read, and laughed his ass off.

  22. Charles Knight says:

    “There are other tablets out there…”

    I’ve handed and used most of them and they mainly offer a terrible usage experience for the average user. It’s not surprising the return rate for the Samsung Tab is at nearly 20%. The Ipad is going to remain the tablet of choice for many into the near future (It will be eventually swamped by android tablets due to the refusal of Apple to reduce it’s margins and get into a race to the bottom).

    “The solution in comics is simple – sell pdf versions online”

    PDF is a really shitty format for comics, you wouldn’t get one red cent from me.

  23. I’m with Charles. I use a lot of Apple products not because I’m a snob but because I hate having to tinker to make things work. Case in point: comiXology works fine on my Mac, my iPod Touch, and my iPad. On each of these devices, I installed it, started it, imported my comics from one to the other—all very smooth.

    On my Android phone? Not so much. It was very hiccuppy and kept refusing to download comics, sending me a message instead about my SD card. I eventually fixed the problem (by handing it to my husband and saying “fix this”), but this experience was not unique. Apple products work smoothly in part because of their tight control; they won’t let an app in that doesn’t work, and there is only one version (at a time) of their OS. I believe there is more diversity among Android systems, making it harder to develop apps that work smoothly on all of them.

    I still think the store thing is a bad move, but as someone pointed out above, it’s not quite as draconian as we all first thought. It looks like Apple has already backed off on it a bit (without admitting they were backing off), and hopefully they will loosen up some more, because their limitation limits the usefulness of the iPad. But if that doesn’t happen I won’t switch to an Android tablet, I’ll just stop using tablets altogether.

  24. Charles, the reason the Galaxy Tab is one of the few Android tablets out there right now is because the current version of Android was never meant to be used as an OS for a tablet. Google is releasing a new version of Android made for tablets this spring called Honeycomb. Which is there is about to be a large number of tablets released this spring, as lot of hardware makers held off until this new OS was available.

  25. Charles Knight says:

    Matthew I’m aware of all of that (One of my area of work is mobility) but bear in mind I was responding to “there are other tablets out there” which is talking about what is currently available.

  26. Calvin Reid says:

    As I understand it, Apple is requiring developers to offer in-app purchases through its own retail channel in apps that bypass the App store for sales through another web venue. Apple has not stated more than that. We’ll see if indeed they plan to cut off access to previously purchased material, which I doubt. What they are doing is making sure that their retail channel–which is convenient, easy to use and has all of your (our) payment info–is availble on their own platform.

  27. Glenn Simpson says:

    OK, I’m confused, because I’m hearing two different things:

    1. I buy “Trashy Novel” from somewhere else, and as long as I COULD have bought it through ITunes, it’s OK (which means that Apple’s content rules limit what I can read, but don’t have to get paid for it).

    2. I can only read “Trashy Novel” on my Ipad if I bought it through ITunes (which means that Apple is controlling both content and getting a cut of the cost).

    Which is it?

  28. Glenn Simpson says:

    Edit: on #2, I understand that “I bought it through ITunes” might be an indirect transaction coordinated by another app, but the money flows through iTunes.

  29. Naveed says:

    Everyone should move to Google Android. Apple is so arrogant, going down the same patern as Microsoft once did and look where that lead them. (how many anti-trust lawsuits??? and spin offs???). I think Apple needs to be a little more open minded and remember you can be on top of the tech world and fall back down very quickly. The key is keeping the customer happy and bringing new cool widgets to the market. They are mainly focusing on #2.

  30. Glenn, people at first thought it was #2, but now with some clarification it looks like it’s #1… until Apple decides to change it once again.

    Charles, fair enough, so how about “there’s going to be a huge amount of better tablets out in the near future” (this month? March?).

  31. Calvin Reid says:

    it’s #1. Apple is demanding that in the future, apps that bypass its purchase system must add an option for in-app purchase through the apple purchasing system. Apple is NOT going to prevent anyone from reading previously purchased material thats on their iPods or iPads or iPhones. This would be counter productive to the sales of Apple devices as well as piss off the 150 million or so people who currently use iOS devices and expect to be able to read and consume content bought through other channels.

  32. @Calvin: it’s not even #1, it’s wider than that: you can take any epub formatted book or PDF on your computer, copy them in iTunes Books and then read them on your iPad or iPhone with no problem. And of course that works for comics in PDF.
    What Apple is trying to do is to prevent the competition (Amazon and Sony) to sell ebooks without getting a cut of them that’s all. If you were a fruit seller for example would you allow somebody to sell oranges on the sidewalk right in front of your shop? Maybe, but you would like a cut of it. That’s what Apple is doing.
    Storm in a teacup.

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