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iFlowReader Blames Closure On Apple

David Gilbert


Logo - iFlowReader

An ebook app has been forced to close because Apple “made it completely impossible for anyone but Apple to make a profit selling contemporary ebooks on any iOS device.”

The iFlowReader app will no longer be supported from 31 May next because the people behind it believe they have been left with no other option. The ebook app launched in December last year with an investment of a $1 million and offered readers a unique auto-scrolling feature. Following Apple’s introduction of a new fee structure earlier this year, the company says it can no longer make a profit. This is the first major casualty of the new structure or “agency model” as Apple calls it. The new model makes the publishers the defacto retailers and they get a 30 percent commission of any book sold. On top of that Apple takes a 30 percent cut leaving the ebook stores with just 40 percent, which iFlowReader says “is all of our gross margin and then some.”


With the agency model, all sales agents (ebook stores) have to charge the same price as set by the publisher. Prior to the agency model being introduced, various deals were available from publishers with up to a 50 percent discounts available, however now everyone gets the same deal. The six largest book publishers have now adopted the agency model and as a result of the latest adoption – by Random House – its entire catalogue (17,000 books) disappeared from iFlowReader’s store on 28 Febraury and the following day appeared in Apple’s own iBooks catalogue. iFlowReader is clearly annoyed with Apple, stating on its website: “We put our faith in Apple and they screwed us.”

When the new fee model was introduced earlier this year, it was seen as only a matter of time before something like this happened. For those using iFlowRader and worried about safeguarding the books they’ve bought, instructions are available from the source link below.

Source: iFlowReader


May 11, 2011, 7:01 pm

Their explanation on their webpage makes an interesting read.

So iFlow are merely resellers (they don't produce or even ship anything) who just made an app - using the APIs and devices that Apple spent billions to create and market - yet they still say they get 30% commission from the publishers.

However when it's Apple asking for the 30% (and with the option that lets usersbuy content outside the app with no commission) we're supposed to think that is now wrong?

Am I missing something or do iFlow just think we're idiots?


May 11, 2011, 7:42 pm

erm, from other sites and the souce link on the article, the agency model adopted by publishers means that the reseller gets a 30% commison for each sale, the retailer would be iFlowreader, and the publisher gets 70%, then thanks to apples new policy iflowreader has to pay apple 30% of the sale price, now as the iflowreader also has operation costs, it means that each sale it makes all of its profit (the 30% of the book price) goes striaght to Apple, and as they have operational costs for each sale, they curently lose money on each sale. If it was as your article suggest
"The new model makes the publishers the defacto retailers and they get a 30 percent commission of any book sold. On top of that Apple takes a 30 percent cut leaving the ebook stores with just 40 percent, "
I doubt that iflowreader would be complaining if they were getting 40% of the purchase price.


May 12, 2011, 4:43 pm

You appear to be missing quite a lot - a little more reading on the matter will probably enlighten you as to why exactly the app developer is upset.


May 12, 2011, 4:47 pm

I think it's a little less awful than your maths suggests - my understanding is that the developers have to pay Apple 30% of their commission, rather than 30% of the sale price. So, it's not wiping out the developer's income entirely - just making a massive assault on their margins. The fact that the developers aren't allowed to compete on price within Apple's ecosystem would also make life fairly difficult for them.


May 12, 2011, 6:34 pm

Spunjji, not according to Apple http://www.apple.com/pr/library/2011/02/15appstore.html
They keep 30% of the total price when they are used to process the payment.
The big test for this will come when Amazon is forced to do the same, which should be around the end of June I believe. The terms Apple are currently trying to force through make any book selling and book reading (for drm books) impossible on iOS for anyone other than Apple.


May 14, 2011, 1:35 am

So ok iFlowreader has operation costs, but why do you think that Apple don't have any operation costs? What about, maintaining the actual Appstore, developer packages, iOS updates, maintaining massive iOS devices community?
I believe that it is fair that the two resellers iFlow and Apple are getting equal share of the profits here.


May 15, 2011, 1:48 am

Everlast66- think you may have missed the point, iFlow and apple aren't getting equal shares of the profits, iFlow get 30% of the purchase price for selling the book, however apple now demand 30% of the purchase price from the app developer ie iFlow. So the 30% iFlow got for selling gets immediately passed to Apple, iFlow get nothing, and the book publisher gets 70%. hence with operational costs every book iFlow sell costs them money

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