The demise of the virtual small book seller?

I recently read about the demise of a company that makes an eBook reader. That company, BeamItDown software, made a product called iFlowReader. The company is going to stop making the reader. Why?

“We cannot survive selling books at a loss and so we are forced to go out of business. We bet everything on Apple and iOS and then Apple killed us by changing the rules in the middle of the game.”

The rule change came when Apple decided it wanted 30 percent from any bookseller that has an app on its devices. Again, from BeamItDown: “Unfortunately, because of the ‘agency model’ that has been adopted by the largest publishers, our gross margin on ebooks after paying the wholesaler is less than 30 percent, which means that we would have to take a loss on all ebooks sold. This is not a sustainable business model.”

Users of the app are in a lurch. Those who bought books through the iFlowReader need to find a way to back them up and read them somewhere. The company is offering solutions as to how that might works on the same link above. Despite the lurch, users will migrate and move on.

Still, the situation at BeamItDown brings up interesting questions about digital property and digital books going forward. Amazon claims that your digital purchases are stored for life on its servers (as do other digital publishers). That’s not the same comfort as tucking a book on a shelf or boxing it up in an attic and retrieving it later. Material goods have the persistence of memory. And you may recall what happened when Amazon yanked back ‘1984’ from Kindle owners two years ago.

With digital goods, what we buy are licenses. Like literary pimps, companies can revoke said licenses if we bust terms and conditions, or if a company decides to change its business practices or, worse, folds. It is no different from the software we buy or subscribe to now. Worse, we need extra software to manage the book data (to control digital rights, to access it “on the cloud” and all the rest). Either way, we don’t get to ‘keep’ the books we buy. “If you need to read, just ask me. I’ll get your books for you.”

As a book consumer, I’m once again drawn to printed books and bookstores again by the action, though I’m probably in the minority. The majority prefer convenience and speed. Companies like Apple and Amazon have made buying content (as well as access to our wallets) a quick, painless experience. So, for many, extra costs don’t factor when Snooki scratches out on paper.

As a writer, I’m concerned about Apple’s 30 percent vig on digital booksellers. If Apple can impose the fee, then other impositions will whittle away at profits and drive book prices up. Eventually, business costs will eat into book publishers’ margins (and ultimately mine). And if Apple can impose this sort of fee, more fees will follow in other places. And i haven’t even mentioned potential restrictions for self-publishers.

BeamItDown put all its chips on Apple devices. Apple changed the rules in favor of iBooks. Apps for Nook, Amazon and others still have yet to change their apps. However, they have broader shoulders then small-business BeamItDown. Besides, Amazon’s sales of Kindle readers and Apple’s sales of iPads aren’t slumping.

Is this goodbye to the small bookstore in the virtual world? Maybe it never really got started.

(Side note: Also worth reading are the comments from the reddit.com post).

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