iBooks Author 1.0.1 EULA: you own the content, we want 30% of .ibooks files

Apple today pushed out an incremental (1.0.1) update to it's controversial iBooks Author software for creating EPUB 3-based iBooks for the iPad. I say based because Apple extended the open EPUB 3 format by adding proprietary extensions (for embedding Keynote files and 3D object, for example) turning it into a proprietary format. But that's not what got people upset.

The iBooks Author 1.0 EULA carried some hefty restrictions around distributing for-profit works created with the tool -- namely that they could only be distributed through the iTunes Store, and were thus subject to Apple's 30 percent commission.

Here's the Important Note from 1.0 EULA:

IMPORTANT NOTE: If you charge a fee for any book or other work you generate using this software (a “Work”), you may only sell or distribute such Work through Apple (e.g., through the iBookstore) and such distribution will be subject to a separate agreement with Apple.

Here's the same section from the 1.0.1 EULA (differences in bold):

IMPORTANT NOTE: If you want to charge a fee for a work that includes files in the .ibooks format generated using iBooks Author, you may only sell or distribute such work through Apple, and such distribution will be subject to a separate agreement with Apple. This restriction does not apply to the content of such works when distributed in a form that does not include files in the .ibooks format.

That new sentence at the end says that Apple gets to participate in any revenue generated from work created with iBooks Author that is output in the .ibooks format, but that it doesn't own the content itself.

Therefore you can use IBA to author your masterpiece then port said content to another, non-proprietary output format and retain all the profits. I had assumed this from the beginning, but many had read into the 1.0 EULA that Apple was claiming ownership to the content itself -- which is clearly not the case.

Here's the more controversial Section 2B of the EULA ("Distribute of your Work") from IBA 1.0 that drew the most ire:

B. Distribution of your Work. As a condition of this License and provided you are in compliance with its terms, your Work may be distributed as follows:

(i) if your Work is provided for free (at no charge), you may distribute the Work by any available means; (ii) if your Work is provided for a fee (including as part of any subscription-based product or service), you may only distribute the Work through Apple and such distribution is subject to the following limitations and conditions: (a) you will be required to enter into a separate written agreement with Apple (or an Apple affiliate or subsidiary) before any commercial distribution of your Work may take place; and (b) Apple may determine for any reason and in its sole discretion not to select your Work for distribution.

Here's 1.0.1 Section 2B of the EULA (differences in bold):

B. Distribution of Works Generated Using the iBooks Author Software. As a condition of this License and provided you are in compliance with its terms, works generated using iBooks Author may be distributed as follows:

(i) if the work is provided for free (at no charge), you may distribute it by any means; (ii) if the work is provided for a fee (including as part of any subscription-based product or service) and includes files in the .ibooks format generated using iBooks Author, the work may only be distributed through Apple, and such distribution will be subject to a separate written agreement with Apple (or an Apple affiliate or subsidiary); provided, however, that this restriction will not apply to the content of the work when distributed in a form that does not include files in the .ibooks format generated using iBooks Author. You retain all your rights in the content of your works, and you may distribute such content by any means when it does not include files in the .ibooks format generated by iBooks Author. Apple will not be responsible for any costs, expenses, damages, losses (including without limitation lost business opportunities or lost profits) or other liabilities you may incur as a result of your use of this Apple Software, including without limitation the fact that your work may not be selected for distribution by Apple.

Apple's pretty clear here. You can use iBooks Author to create commercial content and you will retain all rights to it. However, you cannot sell an .ibooks file created with iBooks Author with anyone other than Apple.

Seems fair to me.