The following Guest Post is from Katheryn Rivas:
We’ve all heard the cliches of the publishing industry heaving its final breaths before collapsing on a grave of paper, mail subscriptions, and these odd, now-obsolete technologies called “books.” Of course, the book will be here to stay indefinitely, if only in its reincarnated eBook form. While there have been many eBook platforms, the Kindle and the iPad being the most significant, not all publishers have embraced the new pricing models that Apple requires. Until now, that is.
Back in 2010, five of the six major book publishers Penguin, Simon & Schuster, HarperCollins, Macmillan, and Hatchett had enthusiastically signed on to Apple’s iBookstore, using the agency model, in which publishers set the retail price instead of retailers. Traditionally, book publishers have used the wholesale model, in which publishers sell their books to retailers, who then set their own prices on their books. Using the agency model, publishers decide on book prices, and then retailers, in this case Apple, get 30 percent of the profits. Random House hesitated to join the big five, worried that its profits would drop. On the consumer side, some complain that the agency model that Apple requires can set e-book prices high, and gives no incentive for sellers to offer consumers discounts.
At the same time however, proponents of the agency model have argued that even though consumers are stuck with prices that are higher than they are used to, authors don’t end up getting the short end of the stick, effectively encouraging up-and-coming young talent. And when talent is nurtured, the consuming public gets higher-quality books. The agency model also allows retailers to make profit, which, under the wholesale ebook pricing that Amazon used but eventually abandoned, was only possible if you sold enough units.
Random House noted that with its physical books, it would keep the wholesale model. While some smaller ebook sellers have bemoaned RH’s decision, saying it will make operating at a profit very difficult now that Apple takes all the 30% cut, other small retailers lauded the decision, as evidenced by American Bookseller Association’s strong support of the agency model, saying it provides a “level playing field for all resellers.”
So what does Random House’s decision mean for us iPad users? If you’re an avid iBookstore user like I am, the final publisher of the “big 6” being added to the mix means we’ll have access to 17,000 more titles, many of which were extremely popular books like Steig Larsson’s bestselling trilogy. Before, Random House’s offerings were inconveniently available only through the iPad’s Kindle app. In my book, RH’s titles are a welcome addition to the iPad reading experience.
About the Author: This guest post is contributed by Katheryn Rivas, she regularly writes for online universities. She can be contacted at: firstname.lastname@example.org.