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Business Insider: ‘Apple not building an “iTunes for e-books”‘
August 1, 2009 | 5:18 am
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By Chris Meadows
This just in from Business Insider: According to an e-book industry source, Apple is not going to launch its own e-book service to go with its rumored new tablet device.
Although the Insider only cites one anonymous source, the reasoning in the article is sound (albeit not exactly news to long-time TeleRead regulars): Apple does not need to launch its own e-book service. There are several good ones available on the iPhone already, including Amazon’s own Kindle Reader, as well as hundreds of stand-alone “appbook” titles. Apple is already getting all the advertising benefit of having e-books available for its devices without needing to take the risk of entering an uncertain market itself.
Even if Apple does not go into the e-book market itself, however, it certainly could benefit from a reorganization of the e-book section of its store. It is hard to find any particular book within that mess without specifically looking for it.
Apple should follow the example of well-organized e-book vendors like Fictionwise and organize its selection of appbooks by genre, author, and title to make it easier for users to find what they need. It would be helpful to publishers in selling their wares, and to Apple in getting its 30% cut of the purchase price. Hopefully Apple will see that it does not need to be an e-book vendor in order to act like one.
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Comments:
I would love to see Apple become an actual ebook vendor, if they did it on the same terms as their music and apps – taking 30% of the retail price. The 65% that Mobipocket/Amazon take is just not reasonable.
Of course, at the moment Amazon seem to be automatically discounting all ebooks. For most ebooks above $10 they discount by about 40%, changing the distribution of the money for each book from 65%:35% to slightly more reasonable 42%:58%. But there’s no guarantee that Amazon will do this in every case, or keep doing it into the future. It also causes problem for any publishers with authors on a fixed percentage of the RRP. Which may explain why big publishers are going to net income terms.
I always thought that the iTunes music store came into being because Apple got tired of waiting for someone else to put something like it into being. “We make the computers, we make the players, why don’t you knuckleheads figure out a way to sell stuff to put on them?” When the knuckleheads failed to come up with a plan, Apple showed how it could be done.
I think the same thing is going on here. Apple doesn’t want to become an ebook retailer, thinking that someone else — Amazon, Barnes & Noble, or a player yet to emerge — should figure out a way of selling the books that will be readable on Apple’s platform, or Microsoft’s, or anyone else’s. Maybe if no one steps up, Apple will take a lead, but given Steve Jobs’ position on the future of ebooks, it might not be a fight he’s willing to step into. Who knows?
Just a historical note: prior to the iTunes music store, the available sites selling popular music used DRM schemes incompatible with the iPod. It’s true that the iTunes store was also a huge improvement in usability, selection and DRM terms, but I don’t think inadequacies in those or other areas prompted Apple to open the iTunes store. They didn’t want customers to abandon the iPod hardware.
Existing ebook vendors like Amazon and Barnes & Noble/Fictionwise already offer free iPhone/iPod Touch apps.
Aaron: Think you’ve got it backwards. The iPod was selling very well indeed, while the online music stores were utterly terrible and doing one misstep after another. (PressPlay and MusicNet both made PC World’s list of 25 Worst Tech Products of All Time.) The chances of the incompatible stores causing a drop in iPod sales were basically nil. (Remember, at the time, not only could you not use tracks from the stores on any *other* portable music players – Janus/PlaysForSure didn’t come out until late 2004, iTMS mid-2003 – some of them didn’t even let you burn tracks to audio CD, others limited the number of tracks you could burn, still others forced you to pay again to burn audio tracks. It was a trainwreck.)
It might be overstating the case to say that Apple was worried that the existing online music services (which were none too successful, except for the illegal ones) were a threat to the iPod. But the advent of iTMS (and a Windows port of iTunes) made a *huge* difference in iPod sales.
So the earlier point about Apple losing patience with the existing services is fairly close to the mark.
The existing situation with ebook stores isn’t a whole lot better than the pre-Apple music stores. Usability is uneven (e.g. some require a separate web signon), DRM and format are still fragmented, pricing is all over the map. So if Apple *did* want to get into this market, there’s some opportunity to improve matters.
The main thing I wish they’d do is provide a genre/author/series setup similar to the genre/artist/album browsing for music. The app-book store is a disaster right now. (Fictionwise and others do a better job, but they’re still not as usable to me – and each does it a bit differently).
However, I doubt that Apple feels much business need to get into this; it probably wouldn’t make nearly as much difference to iPhone/iTouch adoption as the music store did for iPods back in 2003. The new devices are a lot less tied to any single use than the original iPod.
Stephen: Oh, yeah, no question the iTMS did give a big boost to iPod sales; from the very beginning, its purpose was to drive iPod sales, not make a significant profit itself. But being pushed into it because the existing online music stores were a threat to iPod sales? Not in the slightest. The existing online music stores weren’t a threat to anybody, least of all the illegal services.
I don’t think there’s really a big disagreement here. Maybe I shouldn’t have used the word abandon in my initial post. Apple wanted to draw customers to the iPod over any possible competitors. The point is that Apple started the iTunes store with the primary goal of furthering iPod sales, not making a lot of profits on music or generally improving the world of online music sales.
Whether crummy online music stores or great online music stores existed, Apple wanted its own iPod-specific store. Steve Jobs was not waiting around for someone else to do it, he was not tired of letting other people try. If you go back and read the famous 2003 Rolling Stone interview with Steve Jobs, for example, you’ll see that Apple was pushing the labels to agree to the iTunes store in 2001, before the iPod even came to market and way before it was “selling very well.”
So what does this history tell you about what Apple will do or not do in the ebook space? Are Kindle/Fictionwise/Barnes & Noble/Scrollmotion/Google Books comparable to Pressplay, Musicnet or Rhapsody as they existed back in the 2001-2003 period?
Also, Travis, FWIW, there were existing online music stores for portable players other than the iPod operating in 2003 and before. At least 2 examples come to mind. Sony Connect was selling tunes in ATRAC format. Yikes! And PressPlay let you pay extra to download specific tracks to a portable player in 2002.