I have had it confirmed the Apple's new in-app purchasing rules will apply to e-books sold via apps, including the Kindle app, and that in addition these apps will no longer be able to link to purchasing apparatus external to the app, i.e. via a website. This is bad news for the Kindle app, and others who up to now have got around Apple's rules.
Currently if you are in the Kindle app and you want to purchase an e-book you are redirected via a browser window to the Kindle store online. When you make the purchase the content appears in the app. Apple is now firmly saying that it wants a 30% cut of that sale. Under its new rules, revealed today as part of a wider press release about magazine subscriptions, links to that external source for acquisition will also have to be removed.
Though Apple will not publicly talk about how the rules apply to e-book purchases, I was able to confirm that what the release says today would also apply to e-book apps, or as the press release says, "to all publishers of content-based apps on the App Store, including magazines, newspapers, video, music, etc". Apparently, we are included in the etc bit. I was told that all apps would have to comply and will need to change over time. The time period is not clear, though rumours suggest that Amazon has been given till the summer.
Here is what its press release says: "Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app."
Amazon's next move will be very interesting. It had been mooted that they could simply provide an "in-app" link very small, next to a larger link to the Kindle website. But Apple is now saying it won't allow this either. Customers would purchase on Amazon.com, and the content would be available on the app, but once in the app, 30% of any sale belongs to Apple.
Here is my news story on the new rules, and here is the ever helpful Apple c.e.o. Steve Jobs, talking about how the directive would apply to magazine publishers, who wish to sell subscriptions via their apps.
“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing. All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app."
I've noted that some websites, which report on the book business, have resisted reporting this news, partly it seems because Apple had not confirmed it to them direct. Or perhaps because they regard anything that isn't Amazon as good. But Apple seems no less willing to use its market power for its own advantage than its Seattle-based cousin.
Here is Philip Elmer-DeWitt's take on how magazine publishers feel on Fortune magazine: there's a clue in the title, Steve Jobs to pubs: Our way or highway.
What we heard was correct, according to All Things Digital, apps not up to speed with the new regs have until 30th June to comply. Here is a memo sent to publishers: “For existing apps already in the App Store, we are providing a grace period to bring your app into compliance with this guideline. To ensure your app remains on the App Store, please submit an update that uses the In App Purchase API for purchasing content, by June 30, 2011.”
And to be clear, Apple spokeswoman Trudy Muller, who I spoke to before I wrote this piece, has now also confirmed elsewhere the new rules apply to e-booksellers too, such as Amazon.
Also, just spotted this on the Apple guidelines forum:
AppStore guidelines:11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.
So even if Amazon removes its "Kindle Store" button, for the application to be able to allow Kindle users to carry on reading e-books on the Kindle app, it will need to provide access to an in-app purchase.
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