In particular, the license of the software says that if you sell the books you make with it, you can only do so through Apple's channels. The specific terms are in section 2:

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

While not exactly unprecedented, this is a stunning power grab by Apple. There's no technical reason why you couldn't sell the books you make however you want: iBooks Author supports standard formats like PDF, which is easily read on all kinds of devices. This limitation exists only in the license. It makes the software an elaborate advertisement for Apple's iBookstore, laden with Digital Restrictions Management (DRM) and tied to Apple's proprietary devices. By enticing authors to surrender their rights, they're aiming to increase their profits from the iBookstore.

There were already plenty of reasons not to use iBooks Author. While it may be free in the sense that it doesn't cost anything, many of the license terms will make you a lot less free if you agree to them. You're not allowed to share the software with others, or change it to suit your needs. This novel term just goes to show you that there's really no limit to the restrictions proprietary software will try to put on your computing activities. What's next? Versions of Garage Band or Final Cut Pro that only let you sell work through iTunes? Expect to see more of the same from Apple and others in the future.

Fortunately, free software provides ready alternatives. Sigil is a WYSIWYG ebook editor focused on support for the epub format. LyX is a graphical front end to LaTeX, which is especially suited for scientific and academic writing, and makes standard PDFs. Since they're both free software, they don't require you to surrender any control of your work to anyone else: you can sell your books through any channel, and share and change the software however you like. Given that freedom, there's no reason why anyone needs to feel trapped by the terms Apple is offering to authors.

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