Amazon just shared their objectives in their dispute with Hatchette. It comes down to price of e-books, which has been largely speculated. They cite numbers and profit margins and stuff nerds pay attention to. As a self-proclaimed non-nerd, I don’t trust these “numbers.”
My anti-number analysis follows: Amazon wants to treat Hatchette like any other publishing schlub out there (me and bunch of dudes I know). He/She/It gets most of the e-book profits, and if he/she/it doesn’t charge a ridiculous price for the e-book, everybody wins.
The nerd-number analysis goes like this: Amazon wants to charge 10 bucks for an e-book. Hatchette wants to charge 15 bucks. Amazon nerds crunched the numbers and found a 74% increase in e-book sales at the lower price, which amounts to a 16% total revenue increase overall. Amazon takes 30% from each sale. Publisher takes 70%. Amazon recommends that the publisher split the 70% they get 50-50 with the author (35% each of sale), but ultimately it’s up to the publisher. My guess is that Hatchette and other big pubs probably don’t do the 50-50 split because they need to make a profit to run their operation.