Random House caves on agency e-book pricing, may join iBooks soon
Monster publishing house Random House has finally given in over the so-called “agency model” e-book pricing and will begin implementing the pricing changes on Tuesday, March 1. The agency model is a shift away from the traditional wholesale model, though the publisher plans to stick to the old way when it comes to physical books. The move will not only shift the pricing power back to the publisher, but will also open the door for joining Apple’s iBooks as well.
Under the wholesale model, publishers like Random House would sell a certain number of books to a reseller (such as Amazon) for a set price, then the reseller would set its own price on each book. This works out well for the sale of physical books that have to be shipped, but not so much for e-books, where are infinite copies. The agency model, by comparison, allows publishers to set their own prices for e-books and give 30 percent of the sale price to the reseller.