Random House Holding Out From iBookstore Amid Fears of Price Wars

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Financial Times reports that Random House, the world's largest book publisher, has yet to sign on to Apple's iBookstore and may not do so before the iPad's April 3rd launch as it weighs fears that Apple's agency model for eBook pricing will result in a price war, eroding publisher profits.
Markus Dohle, Random House chief executive, did not exclude the possibility of reaching a deal before the iPad goes on sale on April 3, but said he was treading carefully, as Apple's pricing regime could erode established publishing practices.
Rather than allowing retailers to set their own pricing for books, Apple is building on its existing App Store model to allow publishers to set retail sales prices, with Apple taking a 30% cut of revenue. Apple has argued that the change will allow publishers to create more sustainable business models than the current system of relying on the willingness of distributors such as Amazon to sell content at little profit or even a loss, and a number of major publishers have accepted Apple's proposed tradeoff in view of their long-term viability. Random House, however, remains unconvinced and is still working with its authors and agents to assess the potential impact of a shift to Apple's agency model.

Article Link: Random House Holding Out From iBookstore Amid Fears of Price Wars
 

mekopolis

macrumors regular
Feb 10, 2008
152
0
well...its their choice...let them sit it out as the other publishing houses make a fortune on the future of the publishing industry
 

grahamwright1

macrumors regular
Feb 10, 2008
120
23
North of the Border
well...its their choice...let them sit it out as the other publishing houses make a fortune on the future of the publishing industry
Agreed - once they see the initial sales volume they will probably be a lot more motivated to make the commitment. Like the music industry, there's a basic change occurring in their business model and ignoring it, or deciding to wait may not be the best approach. Analyze, embrace and adjust your business model to this distribution model!
 

JeffDM

macrumors 6502a
Sep 16, 2006
709
9
I don't understand, publishers have set the list price since forever on paper books and price wars didn't seem to be a problem for some time, if ever.
 

DoNoHarm

macrumors 65816
Oct 8, 2008
1,122
12
Maine
I don't blame the publishing companies... It's a tough business. Should the upas take off and truely revolutionize the industry, they can always jump in later. With such steep price cuts, they have nothing to loose by sitting it out for a while...
 

GigaWire

macrumors 6502
Dec 25, 2001
386
0
OMG it's new what do we do? I know! Just ignore it, it will go away!

Kind of reminds me of the record industry at the dawn of Napster.
 

rdowns

macrumors Penryn
Jul 11, 2003
27,397
12,512
well...its their choice...let them sit it out as the other publishing houses make a fortune on the future of the publishing industry

Right, because a new device is going to suddenly make people read more. :rolleyes:
 

notjustjay

macrumors 603
Sep 19, 2003
6,052
159
Canada, eh?
I don't understand, publishers have set the list price since forever on paper books and that didn't seem to be a problem for some time, if ever.
Yeah, I'm not sure I understand what the issue is.

Apple: "Hey Random House, instead of letting the stores set the prices, YOU can set whatever prices you want, and we'll just take a small cut."

Random House: "But that will lead to price wars and reduce our profit!"

.... huh? :confused:
 

lowbatteries

macrumors regular
Mar 21, 2008
220
3
Right, because a new device is going to suddenly make people read more. :rolleyes:
I certainly listen to more music (and buy much more) since I got an iPod. Never underestimate how fickle consumers are - I may want to read the latest Stephen King book, but never get around to actually going into the bookstore to buy it. With an iPad or Kindle in hand, there's only a few clicks between hearing about the new book and shelling out money for it.
 

gfiz

macrumors 6502
Dec 18, 2009
349
1
Virginia
well...its their choice...let them sit it out as the other publishing houses make a fortune on the future of the publishing industry
lol, you're joking, right? This is exactly what Amazon needed. They're the #1 e-reader format by far, the iPad isn't even marketed as an ereader, it's just one functionality that it does fairly poorly comparatively. Random house will clean house on the Kindle, the other publishers will look at the reduced money they're not only making on the iPad, but now the Kindle as well...and experiment is over. Retailers should choose their selling price, as is the way with 99% of the retail business in the world.
 

str1f3

macrumors 68000
Aug 24, 2008
1,859
0
Wow, these companies don't know what the hell they're doing. Apple is allowing them to set their own price and they still don't know what to do.
 

dscottbuch

macrumors member
Mar 13, 2002
83
6
Makes no difference to Apple in the short run

This is really a non-issue. To reiterate the obvious -
1) Apple sells hardware
2) Amazon, Barnes and Noble, etc. will have readers on the iPad
3) Amazon, Barnes and Noble, etc. sell RH books in electronic form

Therefore RH books will be in the iPad, no matter what happens here so that this will not effect Apple's sales of Hardware.

Apple has no incentive to change their model.
 

gfiz

macrumors 6502
Dec 18, 2009
349
1
Virginia
I remember a new device that made people listen to mobile music more.

yep, portable cassette players were awesome. Oh do you mean purchase more music as a lesser price? Yes, the iPod did that...but you can only listen to one song at a time, and it's arguable that people that weren't already listening to music on the road are listening to it now because of the iPod. Same with books...people aren't going to start reading because of the iPad. If electronic delivery increased reading, it was already accomplished by Sony and Amazon. Now we're just talking about moving deck chairs around.
 

gfiz

macrumors 6502
Dec 18, 2009
349
1
Virginia
This is really a non-issue. To reiterate the obvious -
1) Apple sells hardware
2) Amazon, Barnes and Noble, etc. will have readers on the iPad
3) Amazon, Barnes and Noble, etc. sell RH books in electronic form

Therefore RH books will be in the iPad, no matter what happens here so that this will not effect Apple's sales of Hardware.

Apple has no incentive to change their model.
except for the other publishers to match RH's price offered at amazon, they'll have to take a bath under Apple's pricing strategy...if RH holds tight, guarantee the iBookstore sees major changes, or the publishers are going to be changing their minds on distribution.
 

Consultant

macrumors G5
Jun 27, 2007
13,302
27
Amazon is the one that started the Price Wars, by offering eBooks BELOW COST, which may be illegal (aka Predatory pricing)
 

aardwolf

macrumors 6502
May 30, 2007
358
124
yep, portable cassette players were awesome. Oh do you mean purchase more music as a lesser price? Yes, the iPod did that...but you can only listen to one song at a time, and it's arguable that people that weren't already listening to music on the road are listening to it now because of the iPod. Same with books...people aren't going to start reading because of the iPad. If electronic delivery increased reading, it was already accomplished by Sony and Amazon. Now we're just talking about moving deck chairs around.
I AM going to start reading books because of the iPad.
 

maelstromr

macrumors 6502
Aug 8, 2002
418
190
Charlottesville, VA
yep, portable cassette players were awesome. Oh do you mean purchase more music as a lesser price? Yes, the iPod did that...but you can only listen to one song at a time, and it's arguable that people that weren't already listening to music on the road are listening to it now because of the iPod. Same with books...people aren't going to start reading because of the iPad. If electronic delivery increased reading, it was already accomplished by Sony and Amazon. Now we're just talking about moving deck chairs around.
You clearly do not and were not commuting in a major city before. Cassette/cd players were never ubiquitous among the millions of people day to day i nthe morning and evening commute the way ipods and iphones are. Now the bigger impact was the form in which people listened and bought music, but there is absolutely no question in my mind that the convenience and quality of the ipod/iphone experience have increased the amount I listen to music, in general, and the iPad is well situated to cause a similar shift.
 

ajones46

macrumors 6502
Feb 9, 2009
376
1
Monroe, Michigan
This is really a non-issue. To reiterate the obvious -
1) Apple sells hardware
2) Amazon, Barnes and Noble, etc. will have readers on the iPad
3) Amazon, Barnes and Noble, etc. sell RH books in electronic form

Therefore RH books will be in the iPad, no matter what happens here so that this will not effect Apple's sales of Hardware.

Apple has no incentive to change their model.
I had forgotten about this. How will the iBookstore compete with e-readers like Amazon and B&N? Especially since RH and other companies will set their own price which may or may not be higher than the e-readers... I'm interested to see how this will play out..
 

Small White Car

macrumors G4
Aug 29, 2006
10,923
1,229
Washington DC
So if I understand this right...

Apple is giving the book publishers exactly what the music labels have been begging for all these years, right?

The music people haven't gotten it, but the book people have, and the book people are afraid of it?

Are books that much different from music here? Or is one of these 2 industries being stupid?
 
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