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Rather obviously, people will pay according to the value they place on it. Some think everything (except their personal labor) should be free. Others consider books a commodity and see no difference between authors. Others are willing to pay extra for first crack at their favorite author's new book.
How authors got paid has changed quite a bit over the years. At one time is mostly in magazines, by the word and actual book sales were extremely small. Once paperback books came about, only the top line authors were published in hardback, everyone else was strictly paperback. Over time, as more and more hardback books were sold, the model changed and authors got their money from first hard back, then paper back, then re-prints and sometimes movie rights. Now, the model is changing again. I've said elsewhere what I think we will end up seeing.
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