Did Apple Have to Launch the iBookstore?

I was reading the weekly post on The Monday Note and one part caught my eye. This week's post is about the current anti-trust lawsuit against the Price-Fix 6 (DOJ, not the civil lawsuit), and the author makes the point that

They (the publishers) asked Steve Jobs for the agency model: price set by them and Apple taking its 30% cut. Jobs obliged, he wanted to boost iPad sales and, to do that, needed to attack Amazon’s domination of the ebook market.

I'll leave aside whose idea this was, but that is mainly because I wanted to question the accuracy of that last sentence. I don't think Apple needed their own ebookstore on the iPad.

I'm sure a lot of people assume that iBooks was a necessity, but I'm not so sure. Content isn't hardware, and Apple has launched other devices without guaranteeing the content to run on it. Take the iPhone, for example. It was a spectacular success from day one, even though it didn't even have an app store, much less a reading app.

Apple could have done the same for the iPad. Just based on the hardware (and the Apple logo stuck on it), it would have been at least moderately successful. And while it had only a limited selection of apps on lunch day, you and I both know that everyone was panting to get their app on it (even Amazon).

Do you think they needed the iBookstore?

Now, I will agree that Apple needed a reading app on the iPad when it launched, but that doesn't mean they had to sell the ebooks. Apple could just as easily arranged for a partner to release the app. Failing that, Apple could have released iBooks with no ebookstore attached.

I know I've said this before, but it's still true. Apple could have decided to avoid getting into a contentious market by releasing either an app which supported Adobe DE DRM, or even an app which didn't support DRM at all. That would have kept Apple out of what was turning into a nasty fight for dominance (Amazon vs publishers).

And it would have kept Apple out of this antitrust mess, too. I do have to wonder about Apple; they're usually smart enough to avoid complications like this.

They had to have seen it coming;  I mean, 5 publishers lined up on a single stage on a single day to support a new business model. That simply screams collusion. Even if we didn't know that the publishers had conspired, it certainly looked like they had.

So what do you think the ebook market would have been like if Apple hadn't gotten into it? Amazon would have dominated it, yes, but that's not all.

If Amazon had continued to dominate the market, I think we would have seen more experimentation. Publishers would have been desperate  to fight off Amazon, and that might make them more willing to consider new ideas.  For example, they might not have cut off library ebooks (HarperCollins, Penguin, Random House).

But I think it more likely that they would have considered other business models, like rentals or subscription plans. We're just beginning to see the first non-traditional hit the market now (skoobe), where if Amazon dominated the ebook market we might have seen them 18 months ago.

What would you have liked to see as an alternative to Amazon?

11 thoughts on “Did Apple Have to Launch the iBookstore?

  1. Yes, Apple “had” to do the iBookstore. To have relationships with publishers, to use the eBook staff they acquired from other companies, and to pave the way in the minds of customers for iBooks Author and textbooks. Also, how could they have let, say, Kobo do it for them? Apple is all about getting that 30% vig — and no outside bookstore can afford that.

      1. But Apple has shown they want every last drop of blood they can squeeze out of their serfs…. er, customers and resent it when anybody else makes money off their property.
        It’s the *principle* of the thing!

      2. They turn a device that makes X profit into one that makes X + X1 … + Y + Z profit.

        X – original profit
        X1 (2, 3, etc) – profit from device LOCK-IN for future models
        Y – 30% vig from EVERYBODY
        Z – unforeseen future lock-in profit (iCloud, for example)

  2. Nate, I don’t think you understand Apple business model. It’s not the hardware that makes the real money. It’s Apps and contents like iTunes. So yes they needed their own ebook store to compete with Amazon, which is also targeting the audio and video market. And people like to stay in one trusted platform.

    1. I think you should take a look at Apple’s quarterly financial statements. Apple sold millions of iPads, iPhones, and Macs, with profits in the hundreds of dollars per device. You cannot say the same about apps.

  3. I think there’s probably still some ambivalence about iBooks within Apple. The sort of exposure it gets is negligible compared to the App Store, Music Store etc.

    If iBooks had some serious senior management buy-in we’d be seeing a more concerted attempt to improve the store, raise awareness of iBooks as a viable Kindle competitor, highlight iBooks advantages and cover other platforms (even just OSX). Apple is the best technology marketing company we’ve ever seen. It could do this.

    I wrote more about this here: http://digitalcultureonline.blogspot.com/2012/01/10-things-apple-need-to-fix-with-ibooks.html

  4. Yes, Apple had to do the iBookstore. They didn’t want to be beholden to Amazon on iPads (and iPhones) the way they used to be beholden to Microsoft and Adobe on Macs. Preventing that meant they had to do something to reshape the eBook market and iBooks was the most straightforward option.

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