Apple Would Be Crazy to Block Use of Outside Content

The Sony Reader (s sne) app for iPhone has been rejected by Apple(s aapl), according to the New York Times (s nyt). The app would have allowed users to purchase and read e-books from the Sony Reader Store, which currently also provides content for Sony’s Reader hardware, and the Sony Reader Android app (s goog). According to the Times, Apple rejected the app because from now on, all in-app purchases would have to go through Apple. We’ve reached out to Apple for comment, and will update if any response is forthcoming.

While Amazon(s amzn), Kobo and Zinio currently offer apps which allow users to make purchases outside of the App Store, and then use that content within those apps, the Times report indicates that this, too, could no longer be possible under Apple’s new app requirements.

It’s this second restriction that, if true, would really make waves. Apple already doesn’t allow apps to sell content without either using its in-app purchasing system (for which the company takes a 30 percent cut on all transactions) or sending users to an external website to complete the transaction on their own with a separate (non-iTunes) payment method.

The exact reason behind the rejection isn’t clear from the Times article. At one point, the reason behind the rejection is listed as follows:

Apple told Sony that from now on, all in-app purchases would have to go through Apple, said Steve Haber, president of Sony’s digital reading division.

If Sony’s app was rejected simply for violating this rule, as Haber seems to suggest, then there’s nothing to get upset about. But Times writers Claire Cain Miller and Miguel Helft don’t leave it at that. Instead, they offer the following:

The company has told some applications developers, including Sony, that they can no longer sell content, like e-books, within their apps, or let customers have access to purchases they have made outside the App Store. [Emphasis added]

Apple disallowing the use of content purchased outside the App Store would mean the highly successful Kindle iPad and iPhone apps would have to be removed, as would Netflix(s nflx), Hulu Plus and many others. Or such content could move to an in-app purchasing model, giving Apple a 30 percent cut of all revenue from content purchases.

Earlier this month, a report surfaced claiming Apple wasn’t allowing magazine publishers to offer print subscribers free digital editions under the new in-app subscription model the iPhone maker is rumored to be introducing tomorrow alongside Rupert Murdoch’s dedicated iPad newspaper, The Daily. Such a move does suggest Apple intends to do more to ensure it’s reaping the benefits of the App Store economy in every possible instance.

But would Apple really go so far as to wall off paid content from all outside sources after allowing it for so long? There’s no doubt the success of iOS has contributed to the success of the Kindle store, Netflix and others, but the relationship hasn’t been one-way. Apple benefits at least as much from having content to offer users, and making sure that users can carry that content from one platform to the next.

Apple can force record companies to acquiesce to its terms in the iTunes store because the ultimate beneficiary is the consumer, and any objections by labels can fairly easily be spun as greedy in terms of popular opinion. There’s no way Apple blocking access to Kindle books, Zinio magazines and Netflix accounts can avoid looking like a slap in the face to consumers, no matter how much you spin it. No, this is simply a case of Sony not playing by the rules by trying to provide access to its own store through the app, and then running crying to the press when it ran up against a wall.

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