The Financial Times has reported that a good number of executive eyebrows have been raised at publishing juggernaut Random House's head office over Apple's share of the pie for content served up via their iBookstore.
Random House is reportedly none too pleased with Apple's use of an "agency model" in its pricing practices. Under an agency model, a company serving up a publisher's content has a right to snag a cut of the publishing company's coin on a per-item basis. In this instance, Apple's cut of the profits sings to the tune of 30% of the total purchase price of every E-book sold via the iBookstore.
Where have we seen Apple engage in this sort of behavior before? Why, in the App Store, of course. They've been enjoying a 70-30 profit split with application developers since the store's launch in 2008.
So far HarperCollins, Penguin, Hachette, Simon & Shuster, and MacMillan have hopped on the iBookstore bandwagon, and will have a slection of their publications available for consumption when the iPad hits the streets. With great authors like Ian McEwan and Sophie Kinsella under their imprint, we can only hope that Random House will follow suit.
