Random House has finally caved to demand and decided that it’s time they switch pricing models to a system more in line with Apple’s 70/30 split. According to the Wall Street Journal, Random House has switched to the “agency model championed by Apple Inc.” and will immediately begin selling ebooks in the U.S under the new model.
Until today Random House has refused to make the switch to Apple’s preferred agency model, unlike their competition. It’s currently unclear if Random House books will make their way to the iBookstore immediately, as both Random House and Apple representatives refused to comment.
But the recent move is pretty interesting. According to Random House, the pricing change will be put in place today. Some think that this could be a move that’s intended to align with the iPad 2 event tomorrow. Either way, more iBooks in the iBookstore can only be summarized with one word: awesome. I’m tired of not being able to find the books I’m looking for, and instead being forced to surf around the internet to find a digital book.
What is the Agency Model?
Simply put, Apple’s Agency Model highlights that publishers are selling directly to the customer, instead of a vast network. In this scenario, Apple is acting as the retailer, and as such would get a commission of the sale. In this case, 30% of any iBook sale would go directly to Apple, and 70% would go into the hands of each publisher.
What’s the other Model?
Previously, book publishers were using the wholesale model with other digital book companies (Amazon, Borders, etc). In this model, the publishers would sell the book to a company like Amazon at retail price, minus a discount (usually around 50%). Then a company like Amazon would turn around and sell that ebook at any price they see fit.
Apple prefers the Agency Model, clearly. Personally, I couldn’t care less about what model they use. I just want access to a bigger library.