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One Solution for Amazon's In-App Purchase Dilemma

The NY Times reported earlier today that Apple is "tightening its control of the App Store."  Apple spokesperson Trudy Muller was quoted as follows:

We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.

Hey, it's Apple's platform, so it seems reasonable that they can set the guidelines.  If Amazon decides they don't want to give Apple a cut of every Kindle ebook sale they can always abandon the platform, right?

That would be foolish, so I don't anticipate that happening.  What can Amazon do?

How about making the out-of-app purchase option more compelling than the in-app purchase option?  Believe me, I hate the clumsy close-your-Kindle-app-open-Safari process I endure every time I buy an Amazon ebook on my iPad, but is this an opportunity to take that awkward process and make it irresistable?

Think membership program.  What sort of a Kindle membership program could Amazon create where you earn points only when you buy out-of-app, direct from Amazon, without Apple getting a cut?  Comply with the rules and offer in-app purchases, of course, but make the out-of-app option irresistable.  What do you think, Mr. Bezos?...


Aaron Pressman

It's impossible for Amazon, Sony or anyone other than Apple to sell ebooks in-app in iOS because of agency pricing. Publishers set the prices and collect 70%. If Apple takes 30%, there is nothing left. Apple is playing semantic games and using PR spin to try to cover for their decision to boot all ebook competitors off iOS.

Richard Day

Joe, a very interesting idea. I don't enjoy the Safari-and-back circuit on my iPad, but that is less annoying than using ADE and the awful Sony store before I abandoned Sony. iBooks simply does not offer a wide enough range of titles I want to buy and Kobo is only a little better. I would think that both Amazon and Kobo should be thinking hard about this. Mike Tamblyn?

Aaron, agency pricing is employed by some publishers, not all, and only in some (geographic) markets. In addition, Amazon has always been willing to sacrifice profit for market share.

Rick Watson

It's a good idea Joe, but unfortunately not possible.

1 - Too cumbersome to manage. Have you ever tried to setup an in-app purchase and get it approved?

2 - Apple has a limit of 3000 for the number of "products" you can offer in-app. Kindle has millions of titles.

I have more details here:

It's almost beyond me that more people aren't talking about this.

@Aaron: 30% is a high price, especially when publishers are already worried about the transition from physical to digital . It would only lead to increased prices.

@Richard Day: Part of the reason the selection is bad is that Apple doesn't have rights to anything meaningful. The other part is managing in-app purchases is somewhat of a bear.

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