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Online book war escalates
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January 4, 2001: 2:20 p.m. ET
Barnesandnoble.com takes charge in eBook war by raising royalties
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NEW YORK (CNNfn) - Barnesandnoble.com, the online bookseller, on Thursday said it would expand its role in digital publishing by raising the royalty rate paid to authors.
The Barnesandnoble.com action escalates an electronic book battle between publishers and retailers.
Barnesandnoble.com (BNBN: Research, Estimates) said it will pay authors and agents a 35 percent royalty rate on the list price of electronic books sold through its site, topping the 25 percent offered by the Random House unit of Bertelsmann.
On electronic editions sold through other retailers, Barnesandnoble.com, as the publisher, will split its wholesale revenue 50-50 with authors and agents, matching Random House's payout.
Although the future of books distributed over the Internet and read on computers remains unclear, retailers and publishers are scrambling, and spending liberally, to gain an advantage in a market that some experts suggest could grow beyond the size of the print publishing market in a few years.
Publishers are seeking to sell electronic books directly to readers, eliminating the retailer. On the other hand, BarnesandNoble.com is seeking to cut out the publisher by acquiring rights directly from authors and releasing their electronic books.
Moreover, despite the growth of available content, adoption of the idea has been slow. In November, author Steven King who had earlier success with the digital book "Riding the Bullet," temporarily suspended his online-only serial novel "The Plant" after readers failed to pay him for it.
But companies such as Barnesandnoble.com, rival bookseller Amazon.com and Microsoft, which makes a "reader" software, are banking that consumes will someday enjoy books on handheld book gadgets, personal computers, as well as personal digital assistants and other pocket size devices.
On Thursday, Barnesandnoble.com said it  plans to publish electronic editions of thousands of classic books, for which the copyrights have expired, and books published recently by other companies.
Already, many volumes such as Herman Melville's "Moby Dick" are available for free download on the site.
Most eBooks in the program will be priced from $5.95 to $7.95, and in all instances will be less expensive than the corresponding print editions, the company said. In addition, in all states but New York there is no sales tax on digital content, and there are no shipping and handling charges.
Barnes & Noble Digital also plans to develop original eBook titles from established authors. The first selection is "The Book of Counted Sorrows," by celebrated horror writer Dean Koontz. 
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