For close to a year, Apple and Random House Publishing have been at a stand-still about joining forces to provide Random House titles on Apple’s iBookstore.
The dispute stems from Apple’s insistence of working on an “agency model” pricing system, which allows publishers to set the pricing for titles while retailers take 30 percent of the profits.
In an apparent change of heart however, Random House announced Monday that it will begin selling its titles online under the agency model and doing away with its traditional wholesale pricing. The publisher said it was changing directions in order to help “forge new retail relationships”. Most believe that specifically means with Apple, although it hasn’t been made official.
Random House is one of the few global publishers left off Apple’s virtual bookshelves. It avoided succumbing to the agency model which compensates publishers less by result of the guaranteed profit retailers take in. With the wholesale method in place, retailers usually gained nothing from the deal or worse yet, took a loss.
While some of its titles can be found through various bookstore apps, Random House apparently sees the value in increasing its availability, and that can certainly be achieved by joining up with Apple – especially (and totally coincidentally, wink wink) with the looming launch of the iPad 2 on Wednesday.
With the increasing popularity of e-books, it seems to be in both companies’ best interests to work out a deal. Apple is seeking to catch Amazon and its wildly popular Kindle device in the e-reader market, meanwhile Random House doesn’t want to be left in the dust in the fast-paced digital world.