iFlowReader predicts ebook publishers will abandon App Store

An independent ebook 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 ebook 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 ebook 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 ebooks 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 ebooks 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 30 June 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 ebook 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 ebook sellers for clarification on this matter. Mary Ellen Keating, Barnes & Noble's senior vice-president for corporate communications and public affairs, replied via email: "We have made no official comment on this." Similarly, a?spokeswoman for ebook 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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eBook Evolutions: Publishers

Apr. 26 2011 - 1:54 pm | 460 views | 0 recommendations |

Last week I discussed author Gary Ponzo and his success bypassing a hardcover deal and building a readership solely via Kindle and Amazon. As this April 21st Wall Street Journal article points out, he is not the only one going it alone; and the low price of eBooks by new writers on the block is putting pressure on the major publishing houses to lower theirs.

“They’re training their customers away from brand name authors and are instead creating visibility for self-published titles,” one senior publishing executive who asked not to be identified, says of Amazon.

As digital sales surge, publishers are casting a worried eye towards the previously scorned self-published market. Unlike five years ago, when self-published writers rarely saw their works on the same shelf as the industry’s biggest names, the low cost of digital publishing, coupled with Twitter and other social-networking tools, has enabled previously unknown writers to make a splash.

Despite this trend, publishers still have good reasons to be pleased with the growth of eBooks. (Indeed, a little too pleased, according to the Author’s Guild, but I’ll save that for a separate post.)

I recently contacted David G. Hartwell, Senior Editor at Tor Books, one of the leading science fiction and fantasy publishers, to get his take on the growth of eBooks. Tor is one of the few houses that still reads unagented material in its search for new talent. With that in mind, I asked Hartwell whether Tor was creating eBooks of their titles across the board now, or just for their bestselling authors.

He confirmed that the numbers from Kindle and iPad eBooks are there to justify making eBooks of everything they put out in the bookstores. That said, bestselling authors in the industry are making it clear they would like a higher royalty for eBook sales.

“There must be some author somewhere that is demanding higher royalties as a deal-breaker,” he said, “but not that I am aware of at present. Every single agent and author would prefer higher royalties, and we would prefer not. We would especially prefer higher sales.”

Hartwell cited the March 21st issue of Publisher’s Weekly (registration required), which lists the 2010 eBook sales for the very top sellers, in particular the listing of titles that sold more than 10,000 copies: 275 adult eBooks and 83 Children’s/Young Adult eBooks.

Noting the latter category, he said, “they report 83 titles by many fewer than 83 writers that sold more than 10,000 eBook copies for the whole industry, out of thousands published. I suspect one of that group of writers might be expressing such a strong desire [for higher royalties], because the eBook sales appear to be subtracting from their hardcover and mass market sales, and in effect earning them less money toward earn-out which may never happen, or compromising their next advance, or both, (and that is a complex problem requiring many paragraphs of explanation if it is not immediately evident).”

That is the issue very much on the minds of Author’s Guild members (full disclosure, I’m one). And it is a complex issue, indeed, as I will discuss in my next eBook post.

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Publishing News: Week in Review - Ereader complexity, the problems of ebook pricing, and how HTML5 can help publishers

Here are some highlights of what grabbed my attention in publishing news this week. (Note: These stories were published here on Radar throughout the week.)

Screenshot of "War and Peace" from the Kindle iPad appIn a recent post for Gear Diary, Douglas Moran bemoaned the direction technological "advancements" are taking ereader apps and devices. As examples, he compared the original Barnes & Noble eReader (which he liked) to its replacement, the Nook app (which "kinda stinks").

On a personal level, functionality is an ereader obstacle that turns me into an ebook curmudgeon. I recently was gifted a Kindle and I nearly threw it across the room trying to read "War and Peace" (as part of a year-long book club; I'm way behind).

Moran and others noted the simplicity of the Kindle and how its fewer features might make for a more straightforward reading experience. But perhaps the Kindle isn't quite simple enough. In the end, I bought the print version of "War and Peace" and gave up on the device. Trying to toggle around links to read book notes was so clunky as to make that feature completely useless. Why not put the notes at the bottom of the page? Having links is great if 1. they're easy and quick to access, and 2. you can return to your place in the book in some obvious, speedy fashion. Otherwise, just give me the content.

All this led me to questions regarding functionality and user experience in ereading:

Are ereader developers focusing too much on technological possibilities and losing sight of reader behavior?For those of you who embrace ereading: What features on your reader(s) are extraneous or obtrusive to your reading experience?For developers: When working on a new app or an update, how do you incorporate the end-user into development?

Please share your thoughts in this comment area here.

Much discussion (and some dismay) surrounds the current upheaval in the ebook pricing model. As $0.99 ebooks sit "shelved" next to $19.99 ebooks (whose print counterparts might be discounted to $11.99), one of the larger issues surrounding the pricing problem is the perception of value from customers.

Jane Litte at Dear Author argued in a recent post that value is based on the reader's "willingness and ability to pay":

Every reader has a different price they are willing and able to pay for a book. I believe that price represents the value a reader places on a book at the time of purchase. However, value can vary over the course of time from when the reader first becomes aware of the book to after the book is read, increasing and decreasing based on different variables. When readers speak about price, they are talking about the amount that they are willing and able to pay at the particular time that they are expressing the opinion about price. Willingness includes the measurement of time.

I asked Todd Sattersten, author and owner of BizBookLab, to chime in on the pricing issue. In an email interview, he argued that print book pricing actually is the larger contributing problem to the perceived value of ebooks (mainly, ala Amazon) and suggested that serialization might be the right model for ebooks.

Todd Sattersten: There is only one factor that matters right now — what print books cost. Customers compare ebooks to their paper-based ancestors, and they long ago concluded they should be cheaper because everything else in their digital lives is cheaper than their physical lives.

Publishers don't want this to be true and, with the power to control ebook pricing through the agency arrangements, are pricing the vast majority of ebooks like they are print books. I co-wrote a book two years ago called "The 100 Best Business Books of All Time." The hardcover retail price is $25.95. On Amazon, you can buy that version for $16.61 or a remaindered edition for $10.38, while the Kindle edition is $18.99. That creates a short circuit in customers' brains. You don't pay more for things that are more convenient. You pay less.

What's interesting is that Amazon is actively discounting books in the 40% to 50% range, and in many cases putting the price of the print book very close to the price of the ebook. There can't be any margin left at those prices. Amazon, having lost the ability to control ebook pricing, is saying to customers "ebooks and print books are the same." This drives more people to ebooks (who doesn't want to download their book now?), sells more Kindles, and further cements their place in publishing's future — both provider of new and destroyer of old (what bookstore can compete with 49% off?). Also, notice how Amazon is redefining short writings with their Singles program. Fewer words, lower prices and, most importantly, a new (not very good) term to attach to the new value proposition.

See the rest of the interview here.

As technology makes the publishing space more and more geek-oriented, understanding how particular technologies can apply and how existing products or content can be adapted might seem to require a computer science degree.

In a recent interview, Google senior user experience designer Marcin Wichary brought one of those technologies — HTML5 — into perspective, explaining how it applies to publishers.

In design and layout, there's a lot of things that HTML5 now does natively, without you having to hold its hand. Things like multimedia are native to HTML5 — you don't need extensions or plug-ins; they're integrated really well.

We have new devices like the iPad that require new input methods like multitouch or shaking the device. All of this is or will soon be supported by HTML5. So you can imagine delivering an experience through your application or your website or your publication that rivals that of a native application on any of the platforms you want to put it on.

On top of that, it's the web. Al of the things that have been available on the web you also have as well. All the social networking, all the APIs, all the integration with other surfaces — you can just plug it in the way you want.

Wichary also explained how publishers can monetize the opportunities HTML5 brings to the table, and how it might even save money in the long run.

It's very important to recognize that HTML5 fits all the devices you can think of, from the iPhone in your pocket to Google TV to the tablets to small screens and big screens. It's very easy to take the content you already have and through the "magic" of HTML5, refine it so it works very well within a given context. You don't have to do your work over and over again. Of course, all of these different means come with different monetization opportunities, like ads on the web or on mobile devices.

In the interview, Wichary also addressed how publishing workflows might be affected by HTML5 implementation and he outlined specific advantages HTML5 can bring to digital reading. The full interview is available in the following video:

Suggestions are always welcome, so feel free to send along your news scoops and ideas.

Keep up with Radar's latest publishing news and interviews with our publishing RSS feed.

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Rejected by publishers, ebook author turns her DIY success into major book deal

AUSTIN, Minn. - For more than five years, Amanda Hocking spent her days tending to disabled adults, making their meals and cleaning up after them. When she got home, she would crack open a can of Red Bull and start typing away at her novels.

Her effort to make it as a writer was at least as grinding as her day job, with countless rejections from book agents before Hocking stumbled across a promising new business model for aspiring authors: self-publishing and marketing through e-booksellers.

A little more than a year later, Hocking's novel "Switched" sits at No. 41 on USA Today's list of top 150 bestselling books — just a few notches below such major juggernauts as James Patterson and Maeve Binchy. Hocking's books also occupy slots 54, 57, 114 and 149 on the list, and on Thursday, the publishing world finally caught up when the 26-year-old college dropout signed a four-book deal with St. Martin's Press.

Hocking said the first book in a new "Watersong" series was slated for release in fall 2012. She declined to release details of the deal. St. Martin's Press confirmed the deal but would not comment further.

During an interview, the author was coy about discussing publishing deals before finally coming clean about her relationship with St. Martin's. She's only written one of the four books in the 'Watersong' series, and won't say what it's about yet, although it's in the same paranormal romance vein as her other books.

Aimed at young adults, Hocking's books occupy the same territory as the enormously popular "Twilight" books by Stephenie Meyer. Hocking has written about vampires, zombies and trolls — a strategic decision that she says she made after scanning the shelves at Wal-Mart.

"I like vampires and they're popular," Hocking said. "So I thought, 'Why not write about them?'"

She has sold her books on such sites as Amazon's Kindle Store and Barnes & Noble's NOOKbooks at prices ranging from 99 cents to $2.99. Hocking keeps up to 70 per cent of the sales.

She sold a few hundred books last May, and the numbers slowly grew to a few thousand before spiking to more than 100,000 in December. Monthly sales reports Hocking provided to The Associated Press showed more than 333,000 sold in January and another 300,000 in February, enough to back her claim to have sold between $1.4 million to $2 million in e-books.

E-book sales have taken off along with sales of electronic reading devices. The Yankee Group, a Boston research firm, estimates e-book sales will generate $2.3 billion in revenue in the U.S. by 2013, nearly nine times that of 2009.

The vast majority of self-published authors never catch on beyond family and friends, but Hocking isn't the only writer to thrive outside the mainstream. Crime novelist John Locke has four of the top 10 sellers, all of them priced at 99 cents, on the Kindle e-book list. The books were released through Telemachus Press, "a for hire author services company" that charges writers to package and publish their work. Steven H. Jackson, a partner at Telemachus, said Locke's work has sold more 500,000 copies this year, helped by the low cost and word of mouth.

"The important thing is to get your work out," Jackson said. "If you price your books at 99 cents, you get websites that say, 'Hey, good reads for under a dollar.' And then word starts to get out."

Alok Gupta, a University of Minnesota marketing professor, said low pricing is critical to e-book success. Authors who do well tend to price their books around 99 cents and do high volume, he said. They also piggyback on popular topics.

Hocking was making $12,000 a year working at the group home, but she quit last August to focus on writing. She said she spends eight to 12 hours each day writing, most of it after dark.

"Switched," the first book in her Trylle Trilogy, is about a rebellious 17-year-old girl who meets Finn, a mysterious new boy at school. She later learns that she's a Trylle, a human-looking troll who was switched at birth, and Finn was to return her to the other trolls. There, she learns she's a princess.

Stacy Schmitz-Miller, 37, of Wadena, Minn., a fan of romance novels who had read the "Twilight" series, said "Switched" was one of the first books that came up when she searched Amazon's romance category. Since it was only 99 cents, she said, "What the heck," and gave it a try. She went on to read all of Hocking's books in two weeks, swept up in their romance and mystery.

"I think every woman can relate to sort of wanting to feel protected," she said.

Grace Onorato, a young blogger from Delmar, N.Y., called "Switched" predictable but a fun "cheese read."

"It's an addicting, easy to digest book that can be devoured in an afternoon," Onorato wrote in her blog. "It probably won't win any literary awards, but it is definitely still worth reading."

Earlier this year, Terri Tatchell, co-screenwriter of the 2009 science fiction film "District 9," agreed to adapt the books from Hocking's Trylle Trilogy as a screenplay.

Hocking said she hasn't adjusted to having money.

Her big-ticket spending has been limited to a car, a television and clearing some debts for herself and loved ones. She still shares the same house she rents with her best friend, Eric Goldman, for $250 a month although she has her eye on buying another place across town. Goldman now serves as her paid assistant, handling email, tracking her schedule and taking the occasional media inquiry.

"I make him turn stuff down," Hocking said. "I don't like to tell people no."

___

AP National Writer Hillel Italie contributed to this report.

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