From Teleread, a message from the non-deceased iFlowReader app:
The crux of the matter is that Apple is now requiring us, as well as all other ebook sellers, to give them 30% of the selling price of any ebook that we sell from our iOS app. Unfortunately, because of the “agency model” that has been adopted by the largest publishers, our gross margin on ebooks after paying the wholesaler is less than 30%, which means that we would have to take a loss on all ebooks sold. This is not a sustainable business model.
For further background and context, Apple changed their policy about selling products through apps. This means that any app that sells a product through it
must pay tribute must give Apple a 30% cut of the payment. As such, it reduces the number of competitors in the Apple based eBook market to the major players who are selling through either the iBookstore or the Safari portal or those that can afford that margin. And, if you read the whole message at Teleread, it was done in a rather unsavory way.
In any case, it’s an interesting story in the evolving eBook market. It does beg questions about retailers changing the rules about what eBooks they carry and if they withdrew any from their sites. What do you think?