iFlowReader predicts App Store e-reader exodus

An independent e-book seller says Apple’s policies have forced it out of business. iFlowReader is closing up shop and pulling out of the App Store, and the company's founder expects his app's departure to be the first of many among e-book publishers.

“I believe they're all going to abandon the App Store,” iFlowReader co-founder Dennis Morin told Macworld, referring to his bigger competitors in the space, like Amazon’s Kindle, Barnes & Noble’s Nook, and Kobo.

“Apple is now requiring us, as well as all other ebook sellers, to give them 30 percent of the selling price of any ebook that we sell from our iOS app,” Morin said. In a letter to users posted on iFlowReader’s Website, the developers explain that Apple’s policy, combined with the agency model now adopted by most major publishers (which gives sellers a 30 percent share of the proceeds), makes iFlowReader unsustainable.

But whether the major e-book sellers really will follow iFlowReader into the night is anything but clear at this point.

What we do know is that, in February of this year, The New York Times published a story featuring complaints from Sony over an App Store rejection. Sony said it had run afoul of an Apple rule that prohibited iOS apps from selling e-books unless those transactions went through Apple’s in-app purchasing process. That seemed to contradict the evidence: Amazon, Barnes & Noble, Kobo, and others—including iFlowReader—had been selling e-books via their apps for a while now. Had Apple suddenly changed up the rules?

When contacted by Macworld (and other outlets), Cupertino denied that this was new, responding to Sony’s claims with this statement:

We have not changed our developer terms or guidelines. 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.

That seemingly self-contradicting statement also appears to match the company’s policy on subscription sales, issued around the same time. As written, the relevant section of the App Store guidelines is unambiguous:

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.

All Things Digital also reported back in February that Apple had set a deadline for developers, requiring that apps implement the in-app purchase API policy no later than June 30, 2011. Presumably, apps that didn’t comply by that point would be removed from the store.

And yet, aside from iFlowReader, we’ve seen little movement on the part of e-book sellers so far; the major vendors haven’t cried foul about Apple’s rules or updated their apps to adhere to the policy. That would seem to suggest that either they believe (or know) themselves to be exempt from Apple's stated rules—having, perhaps, struck individual deals with the company, along the same lines as periodical publishers—or that they still plan on updating their apps to comply by the end of June.

We reached out to several of the e-book sellers for clarification on this matter. Mary Ellen Keating, Barnes & Noble's senior vice president for corporate communications and public affairs, replied via e-mail: “We have made no official comment on this.” Similarly, a spokeswoman for e-book seller Kobo only told Macworld: “Business as usual, Kobo has no intention of leaving the Apple App Store.” Amazon did not reply to a request for comment.

But iFlowReader is a smaller shop, and doesn’t necessarily have the clout of those majors, or the ability to weather the uncertainty. Even though Apple’s new policies don’t kick in until the end of June, Morin is shuttering the app now. His attempts to reach out to the company and find some sort of common ground have met with little response on Apple’s side.

“Their basic attitude," said Morin, “is ‘we don't have time.’”

And with that, it would appear iFlowReader is out of time as well.

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