Random House, a division of German publishing giant Bertelsmann, has been one of the few publishers that hasn’t jumped on the e-book bandwagon with full abandon. The company currently is not on Apple’s iBookstore but that soon may be changing. The company issued a statement today saying they will change its US e-book sales model, opening the door for its titles to be available to iPad and iPhone customers using Apple’s iBooks app.
Effective March 11, Random House will adopt an “agency model” for electronic book sales here in the US. The new model will now allow Random House to set consumer pricing for its e-books and “will provide retailers with a commission for each sale.” This change in retailer commission is the key in allowing Random House to work with Apple and its iBookstore for the first time.
Apple currently takes a 30% commission of publisher sales whenever an iBook is purchased via the iBookstore and Random House’s current business model didn’t allow for it to pay a retailer like Apple when they distributed an e-book. According to Random House’s statement, “The agency model guarantees a higher margin for retailers than did our previous sales terms. We are making this change both as an investment in the successful digital transition of our existing partners and in order to give us the opportunity to forge new retail relationships.” Other publishers have already adopted an agency model, allowing them to pay Apple whenever a sale in the iBookstore is made.
It is unclear why Random House waited this long to make the changes to their business model, but there has been some speculation it might have something to do with Apple’s upcoming iPad 2 launch this Wednesday. There was no mention of the iPad in Random House’s media statement. The company simply said that once the change was in place they were “looking forward to continuing to work with all our retail partners – both digital and physical ‐‐ on our joint mission to connect our authors with as many readers as possible, in whatever format they prefer.”