1.  Status quo before digital disruption.  Publishers search for the "tail event" uber-seller authors like JK Rowling or James Patterson. Under this model, extremely profitable paperbacks fund less profitable hardbacks. (But you can't have one without the other, because you don't know which book will sell like crazy).  This is analogous to the movie/DVD business.  Publishers are happily having lunch at Le Bernadin in Midtown NYC, dining on frog legs and truffles.  They pay writers about 10% of the retail price of books, and pocket 40% of the retail price themselves.  Retailers get the rest - or do they?  Barnes & Noble (BKS) and Amazon discount these books further, and enjoy slim margins.

2.  Then eBooks come along, but don't work under new flat $9.99 pricing model.  You can't do the 50/50 split anymore, because that would leave negative margins for publishers, which means no more frog legs.

3.  Amazon figures out a way - give publishers 87/13 split, but only if the books are priced at $9.99 This works for the time being, although publishers bristle at the $9.99 price point.  Now the publishers are even more profitable than before.  However, they lose ability to raise prices.  And everyone knows that the prices of truffles don't drop.

4.  Apple likes their way better - they offer a 70/30 split, which is less, but it give publishers pricing freedom.