Reports of Apple Kindle App Death Are Premature


There have been some weird news reports this week about how Apple now wants a 30 percent cut of any goods sold from within an app, or that developers have to sell their goods through iTunes with Apple taking 30 percent, and that this greed would prompt online app store developers such as Amazon/Kindle and Hulu and Netflix to nix their apps from your iPhone and iPad.

Poppycock. No, worse — tomfoolery. Insane in the membrane. Not even a bad business mind could conjure up such a absurd idea — tell your vendors they only can sell their wares in your store and to cough up 30 percent of revenue. Great idea!

Except not only are the media interpretations of Apple's ecommerce policies ludicrous from a strictly doing-business POV, they're probably illegal. Apple may be many things good and bad, but being bad at business is demonstrably not one of them.

So who in their right mind would believe something so patently and colossally ridiculous? 
Apparently a lot of reporters in both the mainstream media and the tech media who obviously have no clue about how business works.

I'll try to get the facts straight on this whole app contretemps — and why "the media" leapt lemming-like to such stupid conclusions — after the jump.

What's The Hubbub, Bub?

The whole brouhaha broke last week when Apple rejected Sony's e-book Reader app. Why did Apple reject Reader? Because the Sony app sold books from within the app, which is a Bozo no-no. Simply, Apple logically wants to vet what is sold under its imprimatur.

I'll let influential publishing newsletter Publishers Lunch, people who know publishing, pick up the story:

Sony's Steve Haber gave the [New York Times] the impression that "Apple told Sony that from now on, all in-app purchases would have to go through Apple." As best we can tell, the two NYT reporters then came to the broader conclusion — without any additional evidence in their filed story — that Apple "has told some applications developers, including Sony, that they can no longer sell content, like e-books, within their apps, or let customers have access to purchases they have made outside the App Store."

But Apple has never allowed third-party e-bookstores to sell e-books through in-app purchases that are not part of Apple's own purchasing program, providing Apple with their 30 percent share. Existing approved reading apps from the likes of Kindle, Nook, Kobo and Google do indeed let customers access outside purchases, but they all send customers to the web browser to make those purchases. None of them provide for in-app purchases, and it's not clear why Sony thought they could achieve something that all of the other major reading apps had avoided.

So nothing has changed except Sony got its publishing panties in a wad for no reason. Your Kindle, Nook, Kobo and Google e-book apps are all safe and sound, Apple isn't changing any policy, Apple's not getting extra greedy, Apple's not punishing Sony — nothing, absolutely nothing, has changed.

Subscription Restriction?

But the story refuses to die because the day after Valentine's Day Apple announced its publication subscription policy, in which Apple says two salient things:

1. "Subscriptions purchased from within the App Store will be sold using the same App Store billing system that has been used to buy billions of apps...Apple processes all payments, keeping the same 30 percent share that it does today..."

2. "[I]f 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."

It's number two that's confusing folks and angering some in the magazine publishing world who logically want to avoid coughing up 30 percent of its subscription revenues to Apple. (Personally, I'm with Apple. Imagine Macy's gives a tailor all the tools and patterns and says "Make a dress just for us that only we can sell," then the dress maker tries to sell the dress from the trunk of his car to avoid giving Macy's its cut.)

Now, this has nothing to do with Apple deserving that high a percentage from subscriptions it facilitates through an app, especially considering Google announced its Google One Passsubscription plan under which it clips only 10 percent off the top. Personally, magazines are the last remaining reading material I enjoy more in physical form. But I digress.

Combined with the confusion over the Sony Reader kerfuffle, now people thought Apple was demanding Amazon and Barnes & Noble, et al, along with other content subscription services such as Hulu and Netflix had to sell their wares inside their respective apps so Apple could get its 30 percent.

Except this announcement, as you can read, applies only to content subscriptions. Hulu and Netflix are already content subscription services, so, again, nothing has changed — at least as far as you, the subscriber, is concerned.

Good grief.

Wormy Apple?

Some folks think all of this ridiculous reporting has some legitimacy because Apple hasn't spoken up to clarify. Apple likely thinks a response could backfire by legitimizing the misconceptions. It's like being forced to claim "I'm not a child molester," because of a spiteful neighbor's gossip, and having your defense become the perceived truth. (See The Children's Hour.)

But none of this hand-wringing and "Apple is the Big Brother it decried in its 1984 Super Bowl commercial" is true (at least as far as the prevailing interpretation of these events are concerned) — this is truly a tempest in a teapot.

But why has the reporting on this been more knee-jerk and less discerning than usual? Perhaps a perception worm has turned — not that "the lamestream media" is as singular-acting or -minded as some portray it, but is "the media" now turning on Apple? Tired of playing sheep to Steve Jobs media-savvy shepherd, are reporters now willing to believe nearly anything negative about what is now the biggest, baddest and most ubiquitous brand in technology? Has Apple become the new Microsoft, the company we love to hate? Apple has become Big Brother — grab your pitchforks and torches and let's go get 'em!

Perhaps a topic for future musings.

In the meantime, I can't believe I've expended this much energy on this nonsense. I was going to write about how NFC is going to change our mobile life, but that'll now have to wait until next week.

Until then, I have a Kindle book on my iPad I want to get back to.

(Thanks to my buddy and long-time publishing consultant Mike Shatzkin for helping clarify all this.)

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