Is Gerry Conway Wrong About Amazon+Comixology?

Amazon 2716613_f520[1]ignited a storm of protest when they rolled out a new update yesterday for the Comixology app for iOS. This update did little more than remove the in-app store, forcing comic fans to leave the app to buy new content.

This has many people quite upset, including Gerry Conway. This comics icon guest-posted an editorial earlier today over on comicbook.com where he argues that Amazon removed the store on purpose. According to Mr. Conway, Amazon wanted "to advance their proprietary hardware platform, the Kindle, at the expense of Apple’s platform, the iPad and iPhone".

Mr Conway makes a number of arguments in his post, most of which I disagree with, and so I thought I would take a few minutes today to respond.

Sidenote: I am not going to address Mr Conway's points about attracting the casual reader or how this might fragment the market into publisher specific apps. I think they're worth your time, and I would like to know what you think.

Let's start with the big one:

Amazon did this. It did it for one reason, and one reason only: to advance their proprietary hardware platform, the Kindle, at the expense of Apple’s platform, the iPad and iPhone. They have deliberately degraded the iPad and iPhone Comixology app so that users of the Kindle will have a better reading and purchasing experience. That’s all this is about. They’ve destroyed the future of digital comics to give an advantage to their hardware platform — and, in passing, to leverage their control of digital comics distribution to do to comic book stores what they’ve already done to brick-and-mortar book stores.

To start with, he's wrong about Amazon killing bookstores; indie bookstores appear to be going through a resurgence (ask anyone). Even Salon.com, a site which is infamous for its loathing of Amazon, recently conceded the argument.

But that's a relatively minor point; let's skip to the big one. Mr Conway would have you believe that Amazon hurt the Comixology app in order to bolster the Kindle platform. That argument falls apart on any number of points.

For one thing, the Comixology Android app still has an integrated store. If Amazon's aim was to harm digital comics then their accuracy is only 50-50.

His argument also fails when you square it up against the Kindle apps for PC, Android, and OSX. Amazon has long treated the Kindle apps as being equally important as the Kindle hardware, giving the apps regular updates so they gain the same features as the Kindle ereaders and Kindle Fire Android tablets. Also, you can buy Kindle ebooks from inside the apps.

In fact, in some ways the Kindle iPad app is actually better than the Kindle hardware. Even Mr Conway said as much:

In a later tweet Mr Conway goes on to argue that:

I would say that the foundation for this point falls apart when we consider the fact that we can buy ebooks in the Kindle Android app and the Kindle for PC app (also the Comixology Android app). In fact, it is only the iOS apps that lack the option to buy ebooks from inside the app, and that should make you ask exactly why the iOS app is singled out.

Amazon doesn't want to pay the Jobsgeld (hat tip to Chris Meadows for inventing the term). Apple took a 30%  cut of any sales made in the Comixology app, leaving only 70% to be split between Comixology and the creators.

This brings me to the next point where I disagree with Mr Conway:

Apple charges 30% for in-app purchases of eBooks, music, video, games. Amazon charges 30% for digital distribution of eBooks, music, video, games. Same deal. Period.

What Mr Conway neglects to point out is that Amazon pays Kindle authors 70% (less certain fees), whereas Apple was paying Comixology 70%, only half of which (35%) was passed on to creators.

I don't know about you, but it looks to me like Amazon is giving creators a larger share than what comic book creators got under the old Comixology+Apple deal. And now that Amazon has cut Apple out of the deal, comic book creators are going to get a 50% share, which is clearly better than what they had before.

As you can probably tell by now, Mr Conway and I do not see eye to eye on very many points, the least of which is the analogy which he uses to justify Apple taking a cut:

What Amazon is doing is finessing Apple’s deal with developers by providing an app for free, yet not paying Apple’s fee for the privilege. In effect, Amazon is a store owner in a mall who isn’t paying rent to the mall owner.

In this analogy the "mall" would be the iPad, at which point the analogy falls apart.

You see, Apple doesn't own the mall; I do. I bought my iPad. Apple may have built the mall, but I own it now and I do not see a reason why Apple should get a cut of sales of content I buy from other vendors.

Sure, if I buy content via Apple they deserve a cut. After all, they are processing the payment, delivering the content, and providing support. But when I buy content from the Kindle Store, Apple is not facilitating the transaction. So why should they get a cut, I ask you?

Now, I'm sure someone is going to point out that Apple was processing the payments for Comixology. I don't know if that is true, but I do know that mere payment processing doesn't merit a 30% cut. Paypal charges around 5%, and Gumroad takes an even smaller cut, so even if Apple deserved a share it should be a heck of a lot smaller than 30%.

This post is getting rather long, so I am going to wrap it up with one final point.

Mr Conway argues that Amazon harmed the Comixology app in order to bolster the Kindle hardware.  Given that Amazon doesn't generate a profit on their hardware, they have little reason to try to force comic readers from one device to another.

Bezos said Amazon does not make money on the devices themselves, but the company does hope they will usher users toward Amazon's main business: creating and delivering digital content, like Kindle e-books, movies, TV shows, and music.

"We think we're better aligned with our customers if we make money when people use our devices, not when they buy them," he said. (source)

Amazon makes their money from selling content, which  is why the Kindle apps are given as much attention as the Kindle hardware. With that in mind, it makes little sense for Amazon to damage a successful app in favor of its hardware.

Amazon wants to make money. That is their sole obsession, and if they thought they could make more money by paying off Apple then they would be paying the Jobsgeld.

28 thoughts on “Is Gerry Conway Wrong About Amazon+Comixology?

  1. No, I’d have to say that Mr. Conway has his head stuffed up his reality distortion fielded fundament.

  2. Why is Amazon’s proprietary platform bad but Apple’s proprietary platform good?
    I’m going out on a limb and suggest it might be because Mr Conway is an Apple user instead of a Kindle user. ;)

    I do find it odd that he objects to Amazon taking money out of Apple’s dragon’s hoard of cash to give money to the comics creators. It’s not as if Apple needs the money, whereas the creators can definitely put it to righteous use.

  3. The argument can be made (and has been made http://daringfireball.net/2014/03/ecosystem_chess_game ) that iOS is more profitable and visible for content sellers, despite the lower market share.

    I think it’s equally important to point out, the ComiXology app for Android no longer uses Google Wallet for payments.

    How all this impacts ComiXology sells will be interesting, as well as how it contrasts to how it was before the Amazon buyout.

    1. Realistically, why would an Amazon unit use somebody else’s payment system when they are actively promoting theirs to all comers? The business term is “eat your own dogfood”.
      Especially when using Amazon payments will save them money.
      Regardless of whose ox gets gored, it all comes down to money and this move was so obvious even Publishers Weekly saw it coming.

      1. For the same reasons Beats Music and Microsoft are using iOS’ in-app purchases: easier access for customers and it’s the only in-app payment allowed.

        Now, your next question might be why should Apple control what the devs use for in-app payments. That can be answered from the 1990s Microsoft. One of the most puzzling things the Windows team started seen was reports of software errors they couldn’t reproduce. What they ended up discovering was that, most of the time, it was a badly written driver was causing the problem. But most end users ultimately said “this is a Windows problem”.

        A more recent example happened with a Motorola Windows phone. Someone had discovered that internally, it was only a micro-sd card that had the WinPhone OS and decided to upgrade it from the measly card it had to a 16gb one. This started to cause problems and he complained to Microsoft. The investigation yielded that the cause was the new micro-sd card, which was rated 10. The recommended rating is 4. And again, it was a “Windows’ problem”.

        While this particular situation is unlikely to happen, what is likely to happen is more delicate. We’re talking about end users’ money. If one of the alternative payment systems goes rogue, the end users will say “it’s Apple’s fault”, even if the end users were the ones who made the bad choices. Nate is quite capable of undercovering a rogue application, but can we expect every user to be that diligent?

        And then you have regulatory issues like the FCC ruling regarding in-app purchases. Sure, responsible app developers (most of them) will follow the guidelines, but a minority will ignore it, either because the app development is inactive, or out of malice. This will be the issue Google will find themselves into.

        Am I saying “Apple knows best”? No, what I’m saying is that they are (rightly) paranoid about bad players in the game.

      1. Actually mid-70s was the US original. In Britain we were way behind. Marvel didn’t even start publishing UK editions until about then (all in black and white) and we started from the beginning with each series, so often got story-lines years or even decades later.

        1. So you’ve been spared the BRAND NEW DAY and SUPERIOR SPIDER-MESS?
          Not all bad. When the time comes, switch to the ULTIMATE COMICS versions.

  4. Google has failed me, so what does Jobsgeld mean? We’re talking about Apple and I see Steve Jobs’ name in the word, but the overall meaning is lost on me.

      1. In this case the (very witty) term is meant to imply a tax imposed by the strong upon the weak; extortion.
        When Comixology was a standalone company, removing in-app purchases ran the risk of lost sales (which they might or not be able to afford) and of getting kicked off the AppStore for competing with Apple, which they couldn’t afford.
        With access to Amazon’s backing they can weather both consequences; they are no longer at the mercy of Job’s viking raiders.

        (It also helps that Apple no longer controls 90% of the tablet market. :) )

        1. Yes, how Apple *dares* to take the same cut as everyone else in the industry (https://support.google.com/googleplay/android-developer/answer/112622?hl=en , http://allthingsd.com/20120410/amazon-extends-the-power-of-1-click-purchasing-to-mobile-apps/ , http://thenextweb.com/microsoft/2012/07/20/microsoft-details-the-windows-8-app-store-flexible-cuts-prices-up-to-999-and-try-before-you-buy/ )? [end sarcasm]

          You’re making it sound like Apple is the only one who actually takes a cut on IAP, when this is standard practice in the industry. Heck, even _Paypal_ gets a cut from the payments ( https://www.paypal.com/us/webapps/mpp/merchant-fees ), and if we take into account that many IAP are priced in the $0.99 range, they are charging *more*.

          Even saying that Apple is the only one limiting to their own payment gateway is false, when Amazon is moving their IAP to Amazon Coins, and Google is making the push to limit IAP to their own systems ( http://appleinsider.com/articles/12/03/08/google_threatening_android_app_makers_who_use_alternative_payment_services ). Where’s the outrage here? Oh yeah, they’re not Apple.

          As for Apple not controlling the 90% of the tablet share market, it’s barely relevant. iOS has a higher use, and better capitalization than Android. More information in the Daring Fireball link I posted above.

          1. One point you seem to have missed is that Google is not getting a cut of Kindle Store sales or Comixology sales in the related Android apps; Amazon handles their own payment processing. Google at least makes it optional; Apple does not.

            And are you really defending Apple’s actions with the argument that everyone else is just as bad? That’s not a strong argument.

          2. And since you brought up standard practices, let me also add that there are a lot of major media companies that refuse to pay Apple a cut of their revenues, including Nook, Kobo, Netflix, and a lot more. Even Google Play Books doesn’t pay the 30% vig to Apple.

            Comixology was in fact one of the exceptions to the standard practice among media companies.

          3. > One point you seem to have missed is that Google is not getting a cut of Kindle Store sales or Comixology sales in the related Android apps; Amazon handles their own payment processing.

            But in this case, they are not using Google’s payment solution to make the payment, therefore, they’re not obligated to *pay* Google anything. If you do have an app in the Google Play Store, you’re forced to use Google’s payment solution ( http://www.reuters.com/article/2012/03/08/us-google-idUSBRE8271CJ20120308 ), and therefore paying Google their cut. Which, incidentally, ComiXology no longer does ( http://www.droid-life.com/2014/04/28/comixology-update-for-android-removes-google-payments/ ).

            > Google at least makes it optional; Apple does not.

            I’ll get at this point later.

            > And since you brought up standard practices, let me also add that there are a lot of major media companies that refuse to pay Apple a cut of their revenues, including Nook, Kobo, Netflix, and a lot more. Even Google Play Books doesn’t pay the 30% vig to Apple.

            Yet they pay it somewhere else. If you are a merchant, selling “products” on the internet, you need a payment solution. No matter who you choose, you have to pay a fraction of what you’ve been payed. Paypal, for example, charges around 3% + $0.30 per transaction.

            Returning to this point:

            > Google at least makes it optional; Apple does not.

            We’re talking past each other. Let’s split the argument:

            1. No matter what payment solution you use, you need to pay their share. We can agree with that. If the dev use Google’s Play Store, the dev should pay Google their share, likewise with Amazon’s AppStore and with Apple AppStore.

            2. Should Apple allow alternative payment solutions for apps in their AppStore? This is where it gets tricky. Technically, it’s posible to offer such a solution. There are several ways to tackle this problem. Legally is where it becomes a problem.

            The FCC’s ruling on IAP can gives us a clue of where it can be headed. In this case, an end user who *did not read the manual*, sued Apple and won. In the eventuality of a law suit brought by an end user scammed by a third party payment solution, Apple would ultimately be responsible for the bad actions of a third entity (in this case, a rogue company offering a payment solution), no matter what precautions Apple might take. Google has a similar lawsuit against them ( http://mashable.com/2014/03/11/google-sued-apps/ ).

            The other alternative is to open their iOS for alternative app stores. Aside from the problem above with bad players, we’ll see malware and the “Windows Problem” I mentioned above.

            Had this ruling gone in Apple’s favor, it would have *bolstered* the case for alternative payment solutions. It would have given end users the responsibility of being careful with what they do online, therefore giving app store companies more leeway and developers a stronger case for more alternatives.

            Apple _is_ being paranoid. There is no other way to put it. They are erring too much on the side of caution.

          4. On the ComiXology app: http://www.droid-life.com/2014/04/28/comixology-update-for-android-removes-google-payments/ . In other words, until this weekend, ComiXology did pay Google their share. That is no longer the case.

            And it’s interesting that you cut the sentence _before_ the one you quoted:

            > But in this case, they are not using Google’s payment solution to make the payment, therefore, they’re not obligated to *pay* Google anything.

            I was mistaken on the Play Store guidelines ( http://venturebeat.com/2012/03/09/google-wallet-android-in-app-payments/ ). This part of my argument still stands: since Amazon is not using Google’s payment system, they don’t need to pay Google anything.

  5. It doesn’t really matter WHY they removed the in-app purchases. What matters is that the change dramatically harms the app, negatively impacts the user experience, and will almost certainly harm sales. Probably far more than the 30% they were paying to Apple. From a “what’s best for the user” standpoint, I’m not sure any argument exists to warrant the removal.

    1. Actually, it does matter why Amazon did it; Conway’s explanation is bogus. It also matters that the better customer experience came at a hefty financial penalty to creators and to Comixology.

      Apple deserves the complaints far more than Amazon; they’re the ones insisting on a nearly equal share without doing anything to earn it.

    2. Funny thing, Robert: since Apple started enforcing the Jobsgeld, the Kindle hasn’t had in-app purchases on iDevices, but the iBooks store has. If having in-app purchases available on iDevices really made that big of a difference, wouldn’t iBooks be a lot more of a serious competitor to Kindle than it is?

  6. When Amazon bought Comixology, they got the following:
    A brand,
    an app
    content,
    content creators ,
    and …
    customers.
    That’s a whole segment of customers that need to see what “else” Amazon is offering. Not necessarily a bad thing.

  7. I have to say that I thought his main two arguments was that (1) with comics, its the instant gratification that if the main driver of new comic sales. Now that you can’t buy the comics instantly with the iPad app he thinks its going to depress sales of his and other comic authors products. and (2) this is going to hurt independents more than the big boys because they will have to invest in apps to drive traffic to their products, or rely more on amazon, which ties back into point (1), harder to make an instant sale.

    That’s what his main arguments boil down to.

    And its too early to tell if creators will see a bump up in their royalty fees.

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