
Apple sets deadline for Amazon's Kindle app to change - They want 30% per book - bretpiatt
http://www.tecca.com/news/2011/02/03/apple-sets-deadline-for-amazons-kindle-app-to-change/
======
jaaron
First off, if you trace the article to its source, you'll end up on a WSJ
article that says something slightly different:

[http://online.wsj.com/article/SB1000142405274870477560457612...](http://online.wsj.com/article/SB10001424052748704775604576120531458250932.html?mod=WSJ_hp_LEFTWhatsNewsCollection)

As far as we know, Apple has not directly set a deadline for Amazon. In fact,
there's no knew information other than the date: meaning there's still a lot
of questions about the subscription rates and the actual requirements Apple
will have in place.

Personally, I can't see how a 30% fee for what amounts to little more than
payment processing can stand. It's one thing to charge the fee for app
distribution and marketing in the store. It's another to handle on billing at
which even 10% would seem rather high.

I don't see this lasting. Either publishers will charge an extra fee on iPad
users and/or Apple will be taken to court for anti-trust, probably in Europe
first.

~~~
nika
I think Amazon could resolve this really easily by doing a cross marketing
deal with Apple.

But at least Apple is only taking %30. Amazon has completely excluded Apple
from selling books via the iBookstore app on the kindle. In fact, you can't
even read iBookstore books on the kindle because Amazon doesn't allow Apple to
produce an app for the kindle.

~~~
allwein
There's nothing preventing Apple from signing up to be a Kindle developer and
using the KDK to develop an iBooks app for the Kindle.

<http://kdk.amazon.com/>

I'd like you to point out any evidence that Amazon has excluded or rejected
Apple's application, because I've never heard anything of the sort.

~~~
mds
"active content must meet all Amazon technical requirements, not be a generic
reader, and not contain malicious code"

Depends on how they define a "generic reader" doesn't it?

~~~
random42
Does not still prevent anyone from _selling_ books.

------
zdw
Thus why you should only buy ebooks where you get easily transferrable
formats, like unencumbered PDF or ePub.

I'm a big fan of O'Reilly's multi-format approach. This is the correct end-run
around proprietary stores.

Regarding this issue in particular, I don't see the problem with Amazon and
others kicking their users out to Safari to do purchases, and thus as the
purchase wouldn't happen "in app" it wouldn't be covered by this.

Not as smooth of a purchase experience, but not impossible to deal with.

The other alternative would be to tack on a 30% surcharge on any books bought
directly through the app.

~~~
jpravetz
In support of unencumbered formats, think about how Apple became dominant.
iPod/iTunes initial success + music labels insistence on DRM, lead to lack of
content portability, lead to device lock-in, lead to iPod dominance, lead to
music labels loosing power.

This is different from Kindle, where they write a player for every platform.
But is what you get if you sell through Apple's store for Apple's reader.

O'Reilly wins with their deals. I buy books I wouldn't otherwise.

I bet broadcasters are glad Apple wasn't around when the first TVs were
manufactured.

~~~
rsl7
the iPod didn't become dominant due to device lock-in.

~~~
mikecane
That's correct. People could rip their CDs and also use MP3s they already had.
The Kindle wouldn't even allow Amazon's own MobiPocket books that had Mobi DRM
on them to be read! And, of course, neither the Kindle hardware nor software
for platforms can read ePub.

~~~
jpravetz
You can get any content onto an iPod, but you can't take the DRM-protected
content bought thru iTunes anywhere else, including streaming with Slimserver,
etc. And people now presumably have a large collection of content that is
managed the iTunes-way, with a significant subset that is DRM protected.
Meaning you're locked to Apple's devices.

------
ptomato
The discussion here at least seems to ignore one thing: 30% will not happen
because that would mean Amazon would make -no- profit and still incur
expenses. The agency model under which the vast majority of Amazon's ebook
sales are done has a requirement from the publisher's that they get 70% of the
sale price, regardless of what said sale price is. If Amazon jacks up the
price for iOS sales, then they get 70% of that, and Apple gets the other 30%.
Not going to happen. Personally, I'd bet on Apple announcing sometime in the
near future a drastically reduced cut for in-app content purchases, more like
a payment processor's cut, I.E. 5% or less.

~~~
bryanh
I don't know... Hearing you say that you expect a drastically reduced cut for
in-app purchases sounds like a move Facebook might make to become a ubiquitous
PayPal type entity.

I really don't think Apple would let people get away with such a little
surcharge within their walled garden.

------
drp
What if Apple started demanding 30% of all sales transacted on every device
they produce? What makes an iPhone so different from a MacBook?

~~~
zdw
I'm tempted to call the 30% the AppleVAT at this point...

What makes iOS purchases different are two things:

1\. Apple has oversight of content being sold (helps avoid malicious software
in many cases, and age appropriate content).

2\. Ease of use - one password to buy stuff, not multiple accounts everywhere.

That's what you get as a customer. As a developer, you don't have to deal with
the payment processing and other consumer financial issues, to a great degree,
and they provide marketing.

There's nothing to stop an end-run around any of this - you can still make
totally open web apps, content in PDF and ePub formats, etc.

You just can't provide the identical guarantees Apple provides with the
oversight of their store (which necessitate a locked down device and
limitations on what 3rd parties can do outside of their system).

(edit: formatting fix)

~~~
bryanlarsen
"There's nothing to stop an end-run around any of this"

I thought the whole point of this outrage was that Apple was trying to stop
the end-run. This step isn't a complete blockage, but they're certainly trying
to make it harder for customers to get content from outside and easier to get
it through Apple's paywall.

------
xinsight
I've used Apple's in-app purchase system and it has sone serious limitations.
First, it's limited to about 3000 SKUs. Second, there is no way to
automatically import (or update) the product information. So, from a technical
perspective, Amazon simply cannot use IAP - it's far too limited.

------
ylem
It's not clear what this means: a) Amazon has to provide a way of purchasing
content via the apple store (and presumably can do so at 30% markup).
Meanwhile, books that you purchased to read on your computer, kindle, android
phone, etc. is still available to you on your iDevice at no additional charge.
b) Amazon is not allowed to transfer content that the user has already
purchased. Users have to repurchase all content through the apple store and
the only advantage of the kindle app is if you like the reading experience and
syncing with your existing devices.

If it's (a), then ok. I wouldn't purchase through them, but some people might
do so for the convenience (instead of starting safari and purchasing it that
way). If it is (b), then as soon as there is a credible android tablet, then
it's likely to be goodbye to the iPad for a number of book users. The
advantage of Amazon is that while the content has DRMd for the end user, they
can read it on a variety of devices. Also, the selection is excellent (not
perfect, but for light reading, pretty good). I don't see Apple winning the
content war on this one. I suppose Amazon could make a web-based kindle
service (again, DRMd) that would could be logged in through one's amazon
account and used through Safari. The experience wouldn't be as good, but it
would still let people read content on an iDevice and screw Apple.

------
thematt
Amazon just closed an entire distribution center in Texas because Texas wanted
to take 6.25% in tax. Apple wants 30%? I doubt this will go un-protested by
Amazon.

------
maigret
The first thing that comes to my mind... This will be a huge sell argument for
Android: "Buy Amazon books 25% cheaper than on Apple phones".

~~~
Bud
Oh, yes, because of course, cell providers whose phones run Android would
never _think_ of charging any kind of data tariff or making money in other
ways.

~~~
tensor
No more or no less than on Apple's platform. In truth, with unlocked devices
like the Nexus series cell providers have little to no say in the matter any
ways.

That is, so long as net neutrality remains. If they start doing packet
introspection and charging based on destination or traffic type, well, that is
going to be bad for all mobile users.

~~~
Bud
I didn't imply, and also didn't mean, that it was more likely than on iOS. I
simply meant, this is going to happen everywhere in the industry.

As for net neutrality, I'm viewing that as a mostly-lost battle at this point,
until proven otherwise.

------
jonknee
Well that's one way to attempt and make your eBook store competitive.

------
gst
Maybe it's time for an HTML5 based Kindle app. From a customer point of view I
wouldn't care as long as the functionality is the same.

However, a main issue with this would be the limit space available via HTML5
databases on the ipad - afaik something like 25 megabytes.

~~~
danielsoneg
That's not a terribly big limitation - ebooks are pretty small files,
generally in the .5-1mb range. Conservatively, let's call it 20 active books
on the app - if you do some decent database management or incorporate some
streaming ability, 25mb should be plenty.

------
fredoliveira
This article is incorrect, as far as I am aware.

Apple has implemented a policy where by everyone who sells something through
their app needs to provide the same set of products and services through In-
app purchases. That means that the kindle app _can maintain_ their current
store but must also implement an in-app purchase alternative, powered by
apple, and thus with Apple's 30% tax applied to it.

~~~
gte910h
>sells something

Something electronically distributed. If you buy a physical book via amazon,
then they do not.

Actually amazon should make a "Screw the apple tax" bumper sticker, sell that
and include various free kindle books with purchase of the bumper sticker.

------
badwetter
Pretty greedy isn't it?

~~~
beoba
For everyone's complaints about Microsoft back in the day, at least they
didn't also control the hardware.

~~~
tomjen3
In addition, Microsoft made great development platforms available for their
programmers, for free.

Apple never really cared about their developers, which is evident in the way
they are treating them.

~~~
moxiemk1
Which development platforms did Microsoft make available for free?

The Express Editions of VS are a relatively recent phenomenon, and are
crippled. Apple's tools are free and fully featured - paying gets you the
ability to publish on their store.

------
pnathan
I'm wondering if the OS X Lion edition is going to have these encumbrances as
well.

~~~
tensor
Unlikely. Although iOS is worrying, I have to assume that Apple understands
that locking down OS X on the desktop in the way iOS is locked down will
severely cut into their user base.

I can tell you that myself and everyone I know would immediately drop the
platform if that were to happen.

------
crjvice
is it me or is 30 a robbery? I feel like Im watching goodfellas and any
italian mafia movie where the mob asks for unfair piece of the business so
they can protect you from unwanted guests...

------
smallegan
Dear Apple, quit being douchebags, I love my iPad, please don't make me go out
and buy a kindle as well which is what I will end up doing if Amazon pulls out
of the App Store.

~~~
bcaulf
The Kindle is soooo much better for reading. Less eye strain, much lighter,
amazing battery life, it's frickin $140, free news subscriptions with Calibre
open source software. The 3rd generation has lots of nice improvements, most
importantly in page turn time and contrast. At least try one if you haven't
already.

~~~
smallegan
I actually fall into the group of people that had a Kindle, sold it once I got
my iPad and could use the Kindle App and keep my entire library. I am pretty
sure that nothing is going to get me to start buying books from the iBooks
App.

------
martincmartin
How will this work for O'Reilly books I purchase in pdf format? How can Apple
stop me from reading it without blocking all non-DRMed pdfs?

~~~
sammcd
I'm pretty sure they are only interested in books purchased on the device. If
you don't purchase it on the device they don't get a cut.

~~~
bryanlarsen
AFAICT, the article is saying that if there's a way to purchase content
externally and move it onto the device, there must also be a way to purchase
it internally with the AppleVAT.

So they're definitely targeting books purchased off device.

------
kmfrk
So, what do HN recommend that Amazon do now? Or at least expect them to do.

    
    
        * Leave the app as-is. (With what specific motive?)
        * Jack up the prices. (Perhaps they'll include a notification when the user is on the relevant purchase page.)
        * Leave the prices as-is and take the 30% hit.
        * Let Apple kill the app.

~~~
tensor
I would like them to let Apple kill the app and focus on other devices and
operating systems. I do not wish this due to a dislike for Apple, but rather
as incentive for Apple to open up the iOS platform.

I find it a shame that there is so much focus on Apple devices due, it seems,
almost exclusively the market buzz around their products. Competing platforms
have similar user numbers, good technology, and far better market options as
far as I am aware. That is a model I would like to see winning out over
Apple's more restrictive platform.

~~~
mgkimsal
"Competing platforms have similar user numbers, good technology"

Citation needed.

------
lionhearted
It's interesting watching rivalries/standoffs develop between companies that
didn't seem likely to happen - who would've thought in 2006 that Amazon and
Apple would be at each other in 2011?

That was before the iPhone or Kindle came out, never mind the iPad.
Interesting to see how these things develop.

------
saturdaysaint
If true, I think the market will make some obvious adjustments. In-app content
will be vastly (%30?) more expensive than "out-of-app" purchases. Apple will
counter with more reasonable rates. The end result will mean nothing has been
lost and that app content will be more accessible. As with similar Apple
initiatives (music, apps, etc.), users may find themselves more eager to pay
for content at the end of the day.

Apple are canny about their relationships with content owners - I'm hesitant
to believe that they'd attempt a flagrant "Apple tax". Many of their most
important products - the iPhone comes to mind - have a relatively small slice
of their market. In this atmosphere, it would be untenable to risk losing
important content sources with exorbitant fees.

------
profquail
Here's the actual source article, which has much more information:

[http://online.wsj.com/article/SB1000142405274870477560457612...](http://online.wsj.com/article/SB10001424052748704775604576120531458250932.html)

------
Tycho
I still think this whole thing only applies to apps that let you shop/browse
internally and then whisk you away to Safari to coplete the payment. And
apple's reason for objecting to this is to protect users from fraudulent
payment gateways. Just one customer who had their credit card ripped off after
making a 'purchase on an iPhone app' would be extremely damaging to the
reputation of the whole iOS ecosystem.

~~~
div
If that was the case, they could require Amazon to use their inapp purchasing
platform without taking a 30% cut.

It seems pretty clear to me that 30% of all Amazon's iOS business would be a
nice addition to anyone's bottom line, and Apple feel like they're in a
position to take it.

~~~
Tycho
I don't think they're actually requiring Amazon to do anything, at least not
until either party actually confirms this situation. Amazon can sell eBooks
from their website to be opened in the Kindle app, just as long as you don't
select the product inside the Kindle app. They could allow Amazon to use
Apple's payment gateway free of charge, but why bother?

It's a simple separation of concerns: if you're going to initiate inapp
purchases that are completed in Safari, then to prove trustworthiness you need
to offer purchases via Apple in parallel; if you're going to avoid Apple then
you lose the privilege of making the purchase seem sanctioned by the iOS
ecosystem.

How big is 30% of Amazon's ebook sales to iDevices really? I'm betting _less_
than what Amazon's presence means as a boost to Apple unit sales. The parallel
purchase option is really a sign of _more_ flexibility from Apple.

------
mooism2
This is clearly legal, as Apple don't have a monopoly.

But also clearly not in my interest as a putative Apple customer. (Alas, I
fear I am not in Apple's target market.)

~~~
jaaron
Clearly legal, because you're a lawyer? Don't be too surprised if this lands
Apple in court eventually. Leveraging their OS to disrupt competitors in other
business markets is the exact sort of behavior that got Microsoft in trouble
with Netscape.

~~~
bryanlarsen
AFAIK, this behaviour is only illegal if you're deemed a monopoly. Certainly
Apple doesn't have a monopoly on smart phones, but it could be argued that
they have a monopoly on app store purchases, since I'm sure that they have a
greater than 70% share (by dollars) of app store purchases.

~~~
gte910h
Naw, there is stuff that can land them in court for restrant of trade issues.

I hope this motivates amazon to support the jailbreaking community and release
a new amazon store, but really how this will pan out is apple will get like 5%
of amazon sales on top of the fees for CC processing.

------
wrs
Yet another demonstration of the folly of purchasing DRMed media. Why subject
your ability to read your books to the possibility of bizarre, irrelevant
problems like this? It's like O'Reilly had a falling-out with Barnes & Noble
and suddenly I can't read a book that's been sitting on my shelf for a year.
Is the convenience really worth it?

------
DanielBMarkham
Of course this is legal or Apple wouldn't be doing it.

But it strikes me as an unnatural state of affairs. This idea that I can make
a computational device, then _own the right for you to put material on that
device_ , is technically correct -- if you think of the iPad as some huge
proprietary version of a CD player.

But if you think of it an extension of your brain -- as a prosthesis which
helps you share commonly understood experiences in common formats, which it is
-- then Apple is basically saying it has control over what you _think_. That
it deserves a cut for any experience you have.

Certainly it's still more of a player than a mind-extension device, but this
line will get more and more blurry. It's already making many uncomfortable. My
belief is that some sort of change in law is required to clear up this
confusion. An iPad is not a record player.

~~~
tybris
> Of course this is legal or Apple wouldn't be doing it.

Right, because corporations never do anything illegal in any country.

Microsoft has been fined hundreds of millions for including a browser with
their OS (not even restricting other browsers). Something Apple and every
other OS manufacturer does as well. The problem is, neither Microsoft, nor
Apple cares about fines of that scale.

~~~
brudgers
One does not need to go all the way to Redmond to find illegal activity, one
can find it in Cupertino as well, e.g. Apple back dating stock options.

------
YooLi
The whole article is complete speculation.

------
Charuru
<http://tctechcrunch.files.wordpress.com/2010/05/img_2196.jpg>

\- Vic Gundotra

------
some1else
Who cares about Amazon, they've got volume. While this one precedence might
instantly bump Apple's revenue, it means that indie developers that deal with
licensed/purchased content without in-app transactions will also have no
choice but comply and take into account Apples 1/3rd.

