[tylero]

Your initial claims here don't follow: Lower prices certainly do have an affect on author's income. Authors receive a royalty based on a wholesale price, which is (normally) directly related to the price you pay as a consumer.

Publishers' and authors' interests are fundamentally aligned. Volume and pricing affect everyone in this equation. It seems like they should be the ones discovering and ultimately setting the right price/volume ratio, not Amazon.

(I have no idea what you're driving at in your last two sentences.)

[waterlesscloud]

Author royalties are usually based on Suggested Retail Price, not the actual retail price.

My impression is that Amazon is primarily fighting over the right to set actual retail price, like bookstores all across the country have done for ages. The publishers don't want that to happen because they believe Amazon will set them low enough to affect hardback sales.

But actual retail price has no effect on the money most authors make. A discounted book still pays the author a royalty based on full SRP.

At least that's how I understand this whole thing.

[tylero]

Yes, you're quite right that there is an important distinction to make there.

To clarify one point: Authors typically make their royalties on the wholesale price--that is, the actual cash publishers receive from booksellers like B&N and Amazon. For a printed book, that might be 50-60% of the list price ('sticker price').

The actual retail price, wholesale price, and list price are all related. A higher list price does result in a higher wholesale price, which in turn affects the royalty payment.