agreed to adopt the agency model for e-book sales, Random House books are beginning to appear in Apple's iBookstore.Only days after announcing that it has
Random House, the largest consumer trade publisher, was the final hold-out of the major publishing companies to agree to the agency model, something that is a requirement in order to have e-books carried by Apple. The agency model means that publishers take a 70% cut of sales with the rest going to the retailer.
Random House was originally reluctant to agree to these terms, fearing they would impact profits. Although its e-books haven't been available via the iBookstore, consumers have been able to buy them elsewhere - via Amazon or Barnes & Noble, for example.
Agency pricing does mean that the publisher gets to set the price for books and it also eliminates any discounting, a move that's beneficial for publishers and retailers arguably. But many customers have complained that agency pricing eliminates competition and keeps e-book prices artificially high.
But for fans of Random House titles (these include Dan Brown's The Da Vinci Code and Barack Obama's Dreams from My Father, for example) who have wanted to use the iBookstore and iBook apps for their iPads and iPhones, the addition is good news. And it's likely good news for Apple as it unveils its iPad 2 today and can boast that its bookstore is now stocked with all six of the major publishers - HarperCollins, Hachette, Penguin, Macmillan, Simon & Schuster, and now Random House.