Monday, February 7, 2011

Apple and the Kindle App

There's a lot of talk on the Internet about Apple's decision to require publishers to pay Apple 30% for any purchases made from inside an app, including e-books. (Example: if you buy an e-book on the Kindle app, the publisher of the book has to pay Apple 30%.)

HOWEVER, what is not being repeated is that customers can still use the Kindle app to read content they purchased elsewhere (Amazon, Barnes & Noble, etc.), in which case Apple does not charge the publishers 30% of the purchase. (Read the "Correction" at the bottom of the article.)

If my understanding of this policy is correct, what's the problem? Apple is trying to make a profit like everyone else. Why shouldn't they charge if a purchase is made within their system? Apple still allows a reader to purchase e-books elsewhere and then access them on the iPad at no charge. The publisher, in this case, doesn't have to pay the 30% to Apple and the customers gets the benefit of reading his e-book on the iPad. Seems like a win-win to me.

Manufacturers of all products have to pay fees to anyone who distributes their products. In this case, the manufacturer is a publisher and the products are e-books. If the publisher wants to sell an e-book through more distribution channels (such as Apple), they will have to pay a fee for that channel.

As a reader, what does this mean for me? It's the same as any other product I buy. If I buy a product directly from the manufacturer, it will generally costs me less as the manufacturer doesn't have to pay the "middle man" or distributor. In the case of an e-book. I'll pay less if I can cut out the "middle man" or distributor.

Therefore, if you want to buy your e-book directly from inside an app, you'll have to pay more for that e-book. Otherwise, you'll need to go directly to a distributor (such as Amazon, B&N, Sony or even the authors themselves).

Just remember, the service of distributors is locating all these great books! If you don't know about them, you can't read them!

So whichever way you go, remember, everyone needs to make a profit to stay in business. No profit - no business. No business - no product (and no jobs!). That's the American way.

What are your thoughts?

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