The BAEN situation cannot possibly be clearer:
BAEN sold their ebooks at $5 to the thousands of people who shopped at the online store. Which was fine when ebooks were a hobbyist/enthusiast market.
Once ebooks sold to millions of readers all over, the traffic to their store did not keep up with ebook adoption because the majority of the new ebook shoppers used the stores built into their Nooks, Kobos, and Kindles to buy ebooks instead of going direct to the autbor or publisher websites.
Now, none of these stores are charities or public utilities; they are businesses that charge to distribute product and they are not required to do it for free. Whenever possible (and not forced by a cartel conspiracy) they sit down and negotiate what they will charge for their distribution and promotion services.
BAEN negotiated. They had two options: pay Amazon, Nook, Kobo, Apple, etc a slice of the existing $5 price--thereby cutting their income and that of their authors--or raise prices enough to cover the service fee. That would've been about $1.50, BTW.
Not being stupid businesspeople, BAEN realized that giving their ebooks broader distribution would result in higher ebook sales (the goal of the exercise, of course) and lower pbook sales. So they decided to go to two-tier ebook pricing: one price while the pbook is solely a hardcover and a lower price when the mass market paperback releases, but making sure the ebook is still cheaper than print.
The new prices were thus only in part to offset the ebookstore fees, the rest of the price hike was to make up for reduced pbook sales. And since they knew this would annoy their existing ebook customers, they announced that the higher price at the store would result in higher royalties to the authors. They never said how much of it so it might be a nominal amount or it might be substantial. I haven't seen anybody specify whether it is a 50-50 split or a 90-10 split or what.
Doesn't matter really.
Their old pricing was set back when their ebook sales were meant primarily to boost their print sales. These days ebooks *replace* pbook sales. An adjustment was long expected around here. I remember some of us round these parts wondering how long BAEN could maintain their reader friendly policies once ebooks became mainstream products. Surprisingly, the only changes were the price hike and the bundle sales ending with the release of the print editions.
As far as I'm concerned the latter is the bigger annoyance because I rarely bought their books ala carte, just the bundles and the rare EARC. But where before I popped in once or twice a year to catch up and pre-order up to six months ahead, now I can only pre-order a month or so ahead. Minor annoyance having to drop in every other month and if I should forget...
Realistically, things ebook were very different, last century when they started their ebook store. Change was inevitable.
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