Apple May Ditch iBooks Sales Model To Appease Justice Department
by Dave LeClair
March 31, 2012
Apple may be willing to make a change to their "agency model" in order to appease the U.S. Justice Department. It also appears that publishers may be on board with the change, mainly because they might not have much of a choice. Traditionally, the sale of books is all about the retailer. They choose the price they wish to sell the book for, and the publisher has no say in the matter. With iBooks, the publisher chooses the price, and Apple sells it for that amount. This system does not make the U.S. Justice Department happy.
Publishers like this model because of its "most favored nations" clause. This keeps them from selling books to retailers for less than Apple, and it prevents retailers from applying deep discounts to their books. Publishers often feel that these discounts devalue their books, and preventing this keeps the perceived value higher, and allows them to make more money.
However, it seems as though that is going to change. Apple, the U.S. Justice Department, and publishers may be close to an agreement which would eliminate the "most favored nations" clause, and completely shake up the way Apple sells through iBooks. This could cause a change to Apple's current 30 percent to 70 percent split with publishers on sales. This could also allow buyers to find e-books from other retailers, such as Amazon and B&N, for lower prices.
Apple uses this split for the sale of applications, so if this adjustment happens, it will be interesting to see if it changes Apple's entire ecosystem and perhaps alters the amount developers are paid across the board.
Source: iMore
