Random House Switches to Agency Model For E-book Sales | PW

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The news from Publishers Weekly this evening:

Random House Switches to Agency Model For E-book Sales:

Random House, Inc., the last of the big six houses still using the wholesale model for e-book sales, announced plans to adopt the agency model effective March 1. A Random House spokesperson said that now the house will set the consumer prices of all of its e-books and provide retailers with a commission for each sale.

“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,” according to a Random House spokesperson. “We are 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.”

The Agency Model is based on a 70/30 split, the publisher using the bookseller as an agent to sell their books, and granting them a 30% commission/discount, so quite how Random House can now jump on the bandwagon after so long and suggest they are granting more to booksellers is hard to believe. Note the first line of the quote above. The other big five publishers moved into the Agency agreement because they all felt they were taking a more forceful hand in controlling pricing, something they had conceded for quite some while. This seems nothing more than a capitulation on the part of Random House that they are only now boarding the e-book train late, having watched the steady growth of digital sales with their competitors, and the damaging affect of not having books widely availably on the critical e-books retail platforms.  
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