How Apple Killed the iFlowReader

by Matt Klassen on May 12, 2011

The tale of upstart BeamItDown Software and its innovative eReader app, iFlowReader, is one of the prototypical American Dream; five young people investing their lives, their money, and the sweat of their brows into making a name for themselves. While the road to success wasn’t smooth, as any Apple app developer surely knows, BeamItDown played by the rules and achieved its dream…that is until Apple stepped in.

As of May 31, 2011, BeamItDown Software and its little eReader app that could will be no more, crushed by the weight of Apple’s seemingly whimsical changes to its already draconian app store policies, changes that will soon force all eReader apps to pay Apple a 30 percent cut, changes that ultimately killed BeamItDown.

While I’m sure BeamItDown isn’t the only software company struggling under the weight of Apple’s unrealistic demands and expectations, it is one of the few not to go quietly into the night, with its members taking the opportunity to fire a salvo of harsh criticism back towards Steve Jobs and Co.

But is Apple to blame here, or is this simply a shrewd business decision made to bolster Apple’s own eBook store in the face of the rising popularity of Amazon’s Kindle?

What is the iFlowReader anyways? Simply put, it’s an innovative and easy-to-use mobile app that allows users to read electronic books in the industry standard ePub format. The eReader app is, or was I suppose, available for use on the iPhone, iPad, and iPod Touch.

So what happened? It was back in February that I first wrote about Apple’s changing policies regarding eReaders in the App Store, a move designed to make money of Apple’s eBook competitors by demanding that the apps stop transferring users to a third-party website, a move that companies were using to avoid Apple’s 30 percent cut. While at the time the changing policy was a minor annoyance to a huge tech company like Sony, today we see it crushing the dreams of one of the smaller competitors.

The problem for companies like BeamItDown is as follows: book publishers operate from a business model that pays the retailer, in this case BeamItDown, a 30 percent commission on sales as an agent of the publisher, so if BeamItDown sells a book for $10, it takes home $3.33.

Now, as anyone operating a business knows, that’s not all profit, as the company still has to factor in operating costs and expenses. I’m sure you can see where all this is going—Apple’s 30 percent fee on the total cost of the book accounts for more than an app like iFlowReader makes in the first place, meaning that BeamItDown is selling each book at a loss, and its hard to stay in business in that environment.

But BeamItDown didn’t take their App Store eviction notice sitting down, offering, in part, these words: We put our faith in Apple and they screwed us…It was the American dream that we all strive for. Sadly, the America that we thought we were working in turned out to be a totalitarian regime and the dictator decided that he wanted all of what we had. Our dream is now over.

Self-interest aside, though, do companies like BeamItDown really have a legitimate complaint against Apple? I’m sure we would all like the world of business to be fair, where everyone played nice and did their best to make sure that their neighbours were successful as well, but unfortunately that’s not how capitalism works, the economic system that has conversely allowed BeamItDown to achieve its success and that has taken it away.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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