Random House, one of the worlds largest publishing houses, is balking at a deal with Apple for distribution on the iPad and Apple’s iBooks Store for fear of a price war, according to a report from The Financial Times of London. The company’s CEO, Markus Dohle, told the newspaper that the business model being offered by Apple represented change, and that the company needed additional time to consult with both shareholders and authors.
At the same time, however, Hartmut Ostrowski, CEO of Random’s parent company Bertelsmann said recently at a press conference that the iPad, the Sony Reader, and similar devices were here to stay. He also acknowledged at that time that such devices were influencing the media industry, “like nothing else.”
As one of the biggest publishers in the world — the largest by sales — Random House’s catalog of books represents a big piece of the print world that Apple likely wants to have available through the iPad. It is being speculated that the company is stalling as a negotiating tactic to wring a better deal from Apple than the 70/30 split that Apple is insisted on with its other, new publishing partners.
CEO Markus Dohle specifically didn’t rule out a deal before the April 3rd launch of the iPad, but told The Times that he was treading carefully.
The situation could come down to who needs who more. With all of Random’s major competitors already signed up for the iPad, if the device leads to a big increase in the number of ebooks sold, Random could lose market share to those competitors. If the iPad does not lead to a renaissance for the publishing industry, the company’s current position could look prescient in hindsight.