[fjtorres]

The big name authors haven't abandoned the BPHs because, as earlier Shatzkin columns have pointed out, they don't operate under the so-called industry standard contract terms. Strictly speaking, they don't even receive royalties. If they do, somebody on their negotiating miscalculated badly.
A typical contract for these authors will be based on an estimate of copies to be sold, total, and an advance is negotiated to amount to 50% of that take. The nominal royalties are such that their books might take a decade or more to "earn out", if ever.

In other words, when those guys speak of "selling a book" they are speaking literally.

So, for them the economic math is 50% upfront versus 70% over time. Risk free. Present value math makes that an easy deal to accept since any good portfolio manager working with millions can easily make up the difference. More, the bulk of their book sales are also upfront, clustered in the three month launch window the BPHs care about most, which is why they can get those deals. They don't need word of mouth or even good reviews; their fans will buy them sight unseen no matter what.
Another Alex Cross or Michael Bennett book is going to sell by the million regardless of the reviews.

The other reasons to self publish, content control most notably, also don't apply to them. Patterson, for one, is the editor of his books. He hires the co-writer, gives them detailed outlines, and edits the wordsmithing to his taste. His publisher can afford to give him massive payouts because all they do is print and distribute his books. He even does his own promotion and TV ads. As far as Patterson goes, there is little difference between Ingram Spark or Lightning Source and his tradpub. So why look for an angel he doesn't know when he has a profitable devil he knows at hand?

Those folks are the 1-percenters of the publishing world and money doesn't mean the same thing it does for midlisters and newcomers. They already made their money. They don't have to "sing for their supper" and an extra million or two isn't going to change their lives. They already own their 300 acre writing shack in Maine.

The real question about name brand authors is what do the BPHs do when their cash cows retire. How much is it going to cost to bring into the fold the next Patterson or King or Roberts?

It used to be trapub as a whole got to see and bid on all the good manuscripts that got printed. That is no longer true. The next Grisham that comes along may not be interested in going tradpub unless there is big money and lots of trailing zeroes on the upfront check.

That is going to impact the bottom line.
The likely spiral (already under way) is ever bigger advances for expected bestsellers, ever smaller advances for everybody else, and a bigger focus on digital-only for the small fry. As long as there's dreamers looking to validation by contact the BPHs won't lack for titles at the low end. The high end, though? That will get pricy for them and, more problematic, unaffordable for the smaller tradpubs.

Long term, I worry about the small and medium tradpubs; the BAENS and Angry Robots...