Ebook retailers may be forced to amend apps after Apple rejects external-purchasing-only apps

Major players in the ebook retailing market appear to be facing a challenge to their current online retailing model, following a move by Apple that could net the company up to 30 percent of revenue from app-generated sales.

Ebook retailers with ereading apps for Apple devices such as the iPad and iPhone may be forced to revise their Apple apps following news last week that Apple has rejected a new ereading application from Sony.

International news organisations speculated last week that a decision by Apple to reject a new ereading app from Sony which directed users to an external website to purchase ebooks may mean that other ebook retailers including Amazon and Kobo, which currently have similar apps, would need to revise their apps to allow for an in-app purchasing option.

Apple spokesperson Trudy Muller said in a statement released in response to the Sony story that while Apple 'have not changed our developer terms or guidelines', the company is '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 an in-app purchase'.

The Wall Street Journal also reported last week that developers of magazine and newspaper applications have received notice from Apple that applications which do not give consumers the option of in-app purchasing will be rejected after 31 March.

This development is likely to affect Australian ebook retailers such as Angus & Robertson and Borders as well as international ebook retailers Amazon and Kobo who operate in the Australian market, as they currently direct app users to their websites to purchase ebooks before returning to the ereading application. External purchasing has been adopted by these retailers to avoid sharing revenue with Apple, which currently requires that 30 percent of all in-app sales through the iTunes payment system be shared with the company.

Other publishers of digital content such as The Monthly are likely to be unaffected, however, as they currently offer in-app purchasing to customers.

It is not clear at this stage if the figure of 30 percent may be negotiable if vendors such as Amazon and Kobo agree to include in-app purchasing options in their apps. It is also unclear if retailers will be able to offer ebooks at different price points depending on where the purchase is made.

University of Queensland Press (UQP) digital media coordinator Kirsty Burow told the Weekly Book Newsletter that Apple took issue with the publisher's wish to provide users with free samples of UQP books and then direct them to a website to purchase print format books.

'Unless we gave the whole book away, the only option [for us] was in-app purchasing,' said Burow.

Burow said UQP, which has announced an expansion of its ebook program this week, decided not to continue with negotiations with Apple as in-app purchasing would mean that 'authors would get next to nothing' after 30 percent of sales went to Apple on top of the percentage of sales already going to others involved in creating the app.

'It just wasn't in the best interest of our authors,' said Burow. 'Either you give the book[s] away for free or Apple gets a cut.'

Attempts were made to contact Apple for comment on this story but the company did not respond prior to publication.

Originally published in Bookseller + Publisher