Something very fishy is going on at Apple. It looks like they’re taking in-app purchasing very seriously, and are enforcing what has been rumored for months: eBookstores can no longer link to their respective stores in Safari in any way, even for account sign-ups. Kobo was forced to change over, as did NOOKkids; Google Books has gone entirely MIA from iOS. Plus, the Wall Street Journal has removed all links and in-app sales options. If book sales are not through Apple, they can’t offer anything in-app. Obviously this has negative implications for consumers, annoys developers and content partners, and for what? Why is Apple creating and enforcing these rules?
Let’s assume there’s two reasons; one is that Apple doesn’t want anyone making money off content except them, and they want a cut if anyone is. The other is that Apple is disappointed with their own content sales, namely iBooks, and has decided the answer is to punish the more successful parties. The two are not mutually exclusive, but let’s start with how Apple could prop up iBooks without breaking the competition’s proverbial knees.
When I buy a book from Amazon, B&N, or Kobo, I can open that book on multiple devices, since they have a presence on several major smartphone, tablet, and desktop systems. If I buy in iBooks, I can….read it on an iOS device. That’s it. If Apple wants a bigger slice of the eBook pie, they need to expand iBook’s boundaries.
There’s a few ways they could that. For starters, Apple clearly knows how to negotiate with publishers, and they could try fighting for more DRM-free titles. But that’s a bit unrealistic. More realistically, they could adopt Adobe Digital Editions DRM instead of their own proprietary system. Why do that? Because several eBook devices, from Sony to Kobo to the NOOK, support ADE. There have been many marketing surveys that indicate tablet users also own eBook readers, so why not sell them books that work with both? It also would let Apple position iTunes as even more of a content hub, which falls in line with their goals nicely, and it would probably gather them a handful of eBook reader owners who don’t yet own tablets.
No matter how Apple handled it, getting iBooks into more hands than just iOS is the fastest path to improving sales and gaining more readers.
Let’s Make A Deal
Amazon is very big on striking exclusive deals with authors and their estates. Even if Amazon is getting there first, the Apple name means something, and they could certainly attract a big name or two to iBooks. Imagine if Apple struck an exclusive deal to sell, say, the next James Patterson book for the first 30 days?
Or push more enhanced eBooks. Do a tie-in with a major movie adaptation of a book, or something similar. That’s an easy way to make iBooks sound flashy and fun, which is bound to capture more attention!
These have huge potential, are easy to do, and are a lock that Apple would at least drive sales of the exclusive title or enhanced book, plus a few more as people shopped around. Apple themselves killed loss-leading and other price-based promotions with the agency model, but these are a way to drive visitors to the iBookstore and downloads of the iBooks app.
Hire the Mad Men
When’s the last time you saw an iBooks ad? Apple shows iBooks in the montage of software, but a quick 30 second spot would raise a lot of awareness. Right now it’s just sort of there, but as the red-headed stepchild of the iTunes ecosystem. It doesn’t get the same attention or love from Apple that the other content gets. Movies and music have multiple areas, from Apple TV to iPods, and the App Store gets lots and lots of commercial love. iBooks feels very much like an afterthought, a “Oh yeah, we should deal with this”. Apple has claimed they want to be a digital newsstand, but they aren’t putting forth the effort.
All it would take is a good ad campaign to remind people iBooks exists, and sales would likely move up from curiosity if nothing else. And once consumers have a few titles in a store, they’re more likely to build a library. But they still need to be reminded to shop there first!
Totally Off Course
Of course, there’s always the chance that eBooks are a casualty and not the target. Apple might simply be seriously annoyed that other companies, any other company, is making money on Apple’s ecosystem. But unlike apps, where developers build in the 30% cost to Apple, content is a lot less flexible. Hulu and Netflix don’t have the margins to offer up 30% to Apple. And the Agency Model as designed by Apple leaves no margin room for any retailer to give a 30% cut to Apple and still make any money. [The Agency Model is very simple: 70% to the publisher, 30% to the retailer. If the retailer owes 30% to Apple, that's their entire cut from the sale of the book.] Apple had to have known that throwing down this gauntlet would probably not lead to revenue, but just to contortions from their various software partners as they attempted to limbo in under the new rules.
In many ways Apple is behaving like a childhood friend of mine. When we played at her house, it was her rules. When she came to my house, she was the guest, and so we played by her rules. Apple wants everything to be theirs. If they can’t make money directly by selling content, they want to share in the profits of other content providers. It almost seems like Apple realized the outcome was going to be much like my childhood friendship; as soon as I grew up enough to voice displeasure, the friendship ended. If Apple pushes too hard, all the eBooks and magazines and streaming movies making the iPad a smash hit are going to be forced out. So Apple came up with this half-assed solution, which leaves everyone scratching their heads and no one happy.
What’s your take on why Apple is doing this? Do you use iBooks? Share your experiences and conjecture below!