Apple iBookstore: Understanding Payment Requirements

It’s a royalty agreement, folks.

The other day, I received an unusual email on my Flying M Productions email account. Flying M Productions is my little publishing company, the one I use to publish Maria’s Guides and other books. Its website isn’t much to look at; just a lot of promotional material for the items it publishes and sells. There’s no support for any book there; all support for Maria’s Guides can be found on the Maria’s Guides website.

The Question

Here’s the message, in its entirety; I’ve only omitted the sender name:

I am looking for understanding of this financial requirement for ibooks author:
(Apple does not pay partners until they meet payment requirements and earning thresholds in each territory. You should consider this before applying to work directly with Apple as you may receive payments faster by working with an Apple-approved aggregator.)
Apple was not able to explain this and said I had to contact you.
Please explain.

This is obviously a lie — or a big misunderstanding — I seriously doubt whether Apple even knows of the existence of Flying M Productions — especially since I’ve been waiting over a month for it to approve two titles for the iBookstore. The idea that Apple would refer someone to me about one of their policies is truly laughable. The idea that a tiny publisher with just four titles in 20 years would provide support for the most valuable company in the world is a real joke.

And that explains why I didn’t reply.

What’s This About?

But I wanted to know what she was talking about so I did a little search. I wanted to see whether the text she’d included in parentheses was actually present in any Apple agreement. I picked “payment requirements” and “Apple-approved aggregator” as my search phrases.

First I searched the most recent version of the 37-page Ebook Agency/Commissionaire Distribution Agreement that I’m required to sign to create books for sale on the iBookstore. No joy.

Then I searched the license agreement for the current version of iBooks Author. No joy.

Then I went online, and followed a bunch of links on the Apple and iTunesConnect websites. I eventually wound up on the requirements page for the Paid Books Account. And there, in the third bullet under the heading “Financial Requirements,” was the full text she’d put in parentheses in her email message.

Apple’s Stand on This

Before I go on, you need to understand two things:

  • Apple does not want everyone capable of typing a sentence and turning it into an epub or iBooks Author document to publish on the iBookstore. Think I’m kidding? Why else would they require ISBNs for every title sold on the iBookstore? That’s just another hurdle for authors/publishers to jump. Why does Apple take this stand? Because Apple (1) doesn’t want to publish crap and (2) doesn’t want to hold the hands of hundreds or thousands of author/publisher wannabes to walk them through the publication process.
  • “Apple-approved aggregators” exist primarily as a support mechanism for Apple. If an author/publisher is too clueless to publish on the iBookstore, Apple wants a way to graciously hand them off to someone else. Thus, they approve aggregators who apparently don’t mind holding hands with clueless authors/publishers in exchange for a fee.

The Requirements page linked to above is another hurdle for authors/publisher to jump. It lists requirements to further weed out the folks they don’t want to deal with. Hell, you have to have a relatively new Mac to publish on the iBookstore — if that doesn’t weed out a bunch of people, nothing will.

What are the Payment Requirements?

But what the person who contacted Flying M Productions was concerned with was the “payment requirements.” Of all the requirements, this is the least onerous. All this means is that Apple won’t pay royalties until you’ve reached certain minimum sales amounts. Why? Well, Apple doesn’t want to deal with thousands of tiny payments every month. Instead, it holds your royalties on account until you’ve earned enough for them to make it worthwhile to pay.

This, by the way, is common. Google has always done this with Adsense. Amazon.com does it for the Kindle Direct Publishing program.

While this may seem to suggest that you need to reach a threshold for each individual territory to get payment for that territory, that’s not what I’m seeing. In fact, I was just paid today for February’s sales. My royalty earnings on sales in each of six territories ranged from a low of $38.73 to a high of $659.40, and I was paid for the total amount earned.

Paragraph 5(c) of the Ebook Agency/Commissionaire Distribution Agreement states (in part):

After deducting Apple’s commission from eBook Proceeds, Apple shall either remit to Publisher, or issue a credit in Publisher’s favor, subject to Apple’s standard business practices, including minimum monthly remittance amount thresholds determined by Apple (e.g., $150), the remaining balance by electronic funds transfer (“EFT”) no later than forty-five (45) days following the close of the previous monthly sales period.

This tells me that you need to earn a certain amount of royalties before Apple will pay you and they’re required to pay within 45 days of the close of the period. That’s why I didn’t get my February earnings until April 5 — which is still a hell of a lot better than I get from my traditional print publisher contracts.

The $150 is an example. In looking at my past statements, for periods when I only had one title listed in the iBookstore, I was paid $28 one month and $31 another. Clearly Apple is not waiting for me to earn $150 before it pays me.

How Apple-Approved Aggregators Fit In

In re-reading this Requirements page, I’m thinking that Apple is using this scary sounding “requirement” as a way to encourage authors/publishers to use aggregators. But will aggregators pay more quickly? I can’t see how. Unless Apple uses different thresholds for different publishers? Or aggregators are willing to make payments for very small amounts? Or aggregators are willing to pay before the 45-day period has gone by?

Either way, it’s nothing to get all hot and bothered about.

But I do agree with Apple: if you can’t meet their requirements, use an aggregator.

An Objective Comparison of Ebook Distributors

What I’ve noted so far.

I published, through Flying M Productions, my first ebook in October 2011 and have since published two others. (Learn about all of these titles here.) I went mainstream on all of the ebook distributions, choosing Amazon Kindle (custom mobi), Apple iBookstore (epub), and Barnes & Noble NOOK (epub). With about five months of sales and reseller experience, I thought it was about time to share my observations of these three platforms.

For each criteria, I provided a grade and notes to back it up. Remember, this is based on my experience with just these three books. For the iBookstore, I do not include my experience with iBooks Author-generated books in the table; that’s discussed briefly at the end of this post.

Criteria Kindle Store iBookstore NOOK Store
Ease of Publishing A
It’s very easy to get into the Kindle Direct Publishing program and publish books.
C
Apple’s iTunes Connect program requires a lot of paperwork and acceptance of agreements that are often updated. Its interface for publishing is surprisingly unintuitive (for Apple). It requires a unique ISBN for every book sold.
B
Getting into the B&N Pubit program is relatively easy, although there is an approval process that takes some time. Its online book submission process is easy.
Publisher Support D
Publisher support is nearly non-existent. It’s difficult to send questions. Most questions are answered with a “canned” response. Often, I’m told my question needs more research, but an answer never comes.
D
Publisher support is handled primarily through a menu-driven help system that’s poorly designed. It can take more than a week to get an question answered and it’s usually with a “canned” response.
n/a
I have no experience with B&N’s support system.
Ease of Creating Acceptable Documents B
I convert from epub to Kindle using the Kindle Previewer app. This usually goes smoothly the first time around, but it does require that conversion.
C
Apple is extremely particular about formatting and unusual characters in ebook files. For example, it doesn’t like uppercase filename extensions or spaces in file names. This often requires a lot of digging around in epub format files to fix problems. To be fair, I could probably improve my templates to prevent some of the problems I encounter.
B
BN.com accepts just about any epub I send, as long as it isn’t any larger than 20 MB (which I think is too restrictive.)
Appearance of Ebook C
The Kindle format inconsistently formats bulleted lists and font sizes and completely ignores some formatting. As a result, my books are not usually formatted as I’d like to see them.
A
My iBookstore books usually look very good. Apple is true to all epub formatting.
B
My NOOK books usually look very good, although I sometimes notice instances where formatting is ignored.
Speed of Review Process A
Amazon consistently makes my books available for sale within 24 hours of posting.
D
There is no consistency in the speed of Apple’s review process. I had one book appear within an hour of posting while I waited a week or more for others.
B
B&N consistently makes my books available for sale within 48 hours of posting.
Sales A
In most instances, Amazon sells the most books.
B
Apple sells reasonably well — unless a book has an unusual amount of appeal to Mac users, in which case, it sells best.
D
B&N’s sales are sluggish and rather disappointing.
Royalties D
Amazon offers the worst publishing deal. To get 70% royalties, you must price the book between $2.99 and $9.99. The 70% commission rate is only available for books sold to certain countries. All sales to other countries earn just 35%.You must also pay “delivery fee” based on the size of your book file for all books sold at the 70% commission rate. Amazon enforces price matching, so if your book is available for a lower price elsewhere, Amazon will arbitrarily lower the price of your book in the Kindle Store. And don’t even think of getting into the KDP Select Program; that’s something else I need to blog about soon.
A
Apple offers the best publishing deal: 70% flat rate on all books. No hidden costs, no exceptions to the 70% rate.
A
B&N also offers a good publishing deal: 70% flat rate on all books.
Sales & Royalty Reporting C
Amazon’s reporting system is inconsistent and confusing, although it does have up-to-the-minute sales figures. Amazon’s staff does not reply promptly (or at all) to sales/royalty report questions. Reports seem to indicate book sales at unauthorized prices, making me wonder whether Amazon is ripping me off.
A
Apple’s reporting system is updated daily. Reports can be viewed its iTunes Connect website as well as in an extremely well designed iOS app.
B
B&N’s reporting system is minimal but accurate.
Final Grade B
The only reason Amazon gets such a good grade is because it sells a lot of books. Its royalty structure sucks, but I can still earn more there for most titles than anywhere else.
B
Apple’s fair royalty rate and reporting help it score well, but its disappointing sales figures and inconsistent review process keep it from getting a better grade.
C
B&N is a nice platform, but low sales keep it from getting a better grade. In all honesty, if it weren’t for the fact that publishing there was so easy, I probably would’t bother.

Of course, it remains to be seen how well my iBooks 2 interactive (enhanced) books do on the iBookstore, since Apple is taking so damn long to approve them.

Do you have any experience with any of these publishing platforms? If so, what have you observed? Share your thoughts in the Comments for this post.

The iBooks Author Gamble

Taking a chance and not liking what I see so far.

iBooks IconIn late February and early March, I spent about 2 weeks porting my existing 242-page iBooks Author book to iBooks Author software for publication as an iBooks 2-compatible interactive (or “enhanced”) ebook.

Moving over the text wasn’t a huge deal — mostly copy and paste, followed by the application of styles I’d created or modified for my custom iBooks Author template. But rather than simply copy and paste the 100+ screenshots that are part of the print, epub, and Kindle format books, I decided to rely on videos to tell the story. So I spent most of that time recording a total of 3 hours of original video content based on the numbered step-by-step instructions in the book. I also used the Gallery widget and created an illustrated Glossary.

The final book turned out to be 150 pages and 1.3 GB in size. And it looked awesome (if I do say so myself) — the perfect example of how a iBooks Author could be used to create how-to content.

The Waiting Begins

Final Count
It took 55 days for this book to be approved by Apple.

I submitted the files to Apple via iTunes Connect on Sunday and began waiting for approval.

Monday, Tuesday, Wednesday, Thursday — I spent the week waiting. It’s now Friday and I’m still waiting.

In iTunes Connect, the book’s status remains:

Book In Review. This book is currently being reviewed for quality assurance.

A New Week brings New Developments

Final Count
It took 75 days for this book to be approved by Apple.

I’d already committed to converting my Making Movies book to iBooks Author format. Because the video for that book already existed — I used video clips taken from the example movie — the creation process was much quicker. I figure I put a total of 10 hours into the conversion process. I submitted it today.

And that’s when I discovered two things:

  • Apple no longer allows submissions of books created with iBooks Author 1.0 (or 1.0.1). It requires the latest version, released the other day, iBooks Author 1.1, which includes support for the new iPad. My iBooks Author book was created with the previous version. Is that what’s holding up approval?
  • A warning appeared on screen when I attempted to upload my 233 MB book, telling me that Apple recommends that books be no larger than 200 MB because some users might have trouble downloading a larger book file. My iBooks Author book was considerably larger than this. Is that what’s holding up approval?

Of course, there’s no way of knowing. Apple’s iTunes Connect/iBookstore support is absolutely dismal. If you ask a question, you’re lucky to get a response in less than a week — if you get any response at all. And that response is likely to be “canned” — in other words, boilerplate text possibly chosen at random by the support person who handled your request.

Rejection Could Be Painful

And nagging away at the back of my mind is a blog post by Seth Godin where he reported that his book had been rejected from the iBookstore because it contained links to printed books on Amazon.com.

While my book doesn’t contain any offensive links — at least I don’t think it does — what if Apple decides to reject it because it’s too big? In the wrong format? They don’t like my videos?

All I can think of is the hours and hours of work I put into that edition, possibly wasted on the whim of some reviewer at Apple.

Apple Needs to Get Serious

Today I read a blog post on TUAW about the antitrust lawsuit the U.S. Department of Justice is apparently mounting against Apple. In it was this line:

Apple says that it wants to sell as many ebooks as possible, which is totally believable since the company is still a relative bit player in the ebook market.

From where I sit, I don’t see Apple being very serious about this at all. If Apple were serious, it would have a much better process in place to review and approve iBookstore submissions. After all, you can’t “sell as many ebooks as possible” if dozens or hundreds of them are stalled in the approval process day after day for a week or more. It wouldn’t be rejecting ebooks because it doesn’t like the links they include. And it certainly wouldn’t generate frustration and dissatisfaction among content creators — the people actually creating the books they supposedly want to sell.

Call Me an Idiot

I’ll beat a few of you to the punchline by admitting that I look like an idiot.

Back in January, when everyone was voicing outrage over the iBooks Author EULA, I wrote a blog post that told people they were basically worrying about nothing. In response to concerns about the approval process, I said:

I see Apple’s approval process as a GOOD thing. Right now, there’s nothing stopping anyone from publishing any crap they want as an ebook and distributing through services like Amazon Kindle. This is a far cry from publishing as we’ve known it, where only authors and works approved and edited by an experienced, professional publishing company team would be published. Apple’s review process helps weed out the crap and make its library of content more valuable to iBookstore shoppers. While some folks might be fearful that Apple will not approve their work, I’m not — and you shouldn’t be either. People who can turn out quality work should have nothing to worry about as far as the approval process goes.

Now there is some concern over Apple using this power to censor content. For example, perhaps they refuse to publish a book that says negative things about Apple or its founders. (Remember how they pulled all of a certain publisher’s books out of the Apple Store after they published an unflattering biography of Steve Jobs some years back?) I’m not terribly worried about that, but I do admit that it is a possibility. Obviously, if there are documented examples of Apple not approving something that should be approved, I’d be willing to revisit this point. For now, however, I don’t think it’s an issue.

Yes, I’m an idiot.

I didn’t realize that Apple’s approval process had the potential to be slow and unfair.

I naively assumed that Apple was concerned with quality — after all, isn’t that what’s holding up my book: a quality review? And quality didn’t worry me because I know I can create quality work.

But what if it’s some other criteria that Apple’s reviewers are concerned with? Something other than links to Amazon.com? File size, file format. Or, worse yet, something I can’t fix? And how will I know? When will I know?

Every day that book isn’t in the iBookstore is a day that I — and my partner, Apple — don’t sell any copies.

What to Do?

What’s the right answer? The right approach?

Well, I can tell you one thing for sure: I’m not going to waste another second of my time assembling yet another title in iBooks Author and submitting it to the void via iTunes Connect.

Instead, I’ll wait — as if I have any other option — and see approach. And I’ll use this experience to guide me for future submissions created with iBooks Author.

Got any iBook Author/iBookstore stories you want to share? Comment on this post.

March 19. 2012 Update: It has now been more than two weeks since I submitted my first iBooks Author-created book for approval to the iBookstore. I am still waiting for approval. This is not a good sign, folks. If you’ve already gone through the approval process, please take a moment to tell us how long it took. And if you’re waiting, please let us know how long you’ve been waiting. I’ll update this when (or if?) my book is approved.

March 28, 2012 Update: I finally heard from Apple about the first book I submitted. It had a number of trademark-related issues that needed to be resolved. I wrote about them here.

May 1, 2012 Update: While I was traveling, my iBooks Author book was finally approved. I believe the final count of days until approval was about 55. I removed the count up timer. My Making Movies book has still not been approved. I feel completely idiotic that I actually believed my books would be reviewed within a week.

May 23, 2012 Update: My Making Movies book was finally approved. I believe the final count of days until approved was 75. The last 3 weeks was spent nagging Apple to explain why it was holding back the book for metadata issues without putting a “ticket” on it.