Websites are classic tools used by consumers together with companies such as Amazon to cut out the middleman distributoes - or at least to drastically reduce the distribution chain. A distribution chain that, in the physical world goes manufacturer-> wholesaler-> distributor-> retailer-> customer tends, on-line to be reduced to manufacturer-> retailer-> customer if not manufacturer-> customer The idea is that since Google & co allow anyone to search anywhere the stocking and distribtion features of the traditional chain can be cut away and the savings passed on to the consumer (and some also to the retailer or manufacturer).
Ebooks are sold exclusively by websites (at least I've never ever heard of a physical shop where you can buy an ebook). So naively one might expect ebooks to likewise be distributed by a chain that is at worst author-> publisher-> retailer-> customer and more frequently author-> publisher-> customer or perhaps author-> retailer-> customer
However, while the second one is the Baen/Webscription model, it is not, apparently the standard for other ebook retailers. As we learned from the Fictionwise/Overdrive brouhaha publishers such as Harper Collins employ distributors so that the typical chain for a Harper Collins ebook looks like author-> publisher-> distributor-> retailer-> customer
Naively I assumed that this was due to the well-know fact that Harper Collins are clueless morons. However it appears that HC are not alone in the lack of clue department (and no I'm not refering to their major publishing house rivals). These twoTeleread posts show that actually leading ebook retailers WANT a distribution middleman too:
Publisher Lida Quillen was hoping to upload a nonDRMed Mobipocket copy of The Solomon Scandals for Mobipocket to distribute to Diesel eBooks. Diesel’s hardworking owner, Scott Redford, plans to promote Scandals on his home page, just as Books on Board, another independent e-bookstore, has been on its own site. But guess what. Mobi’s distribution arm apparently won’t do business with Twilight unless Scandals and other books appear with DRM.
Forget, for a moment, the DRM insistence of Mobipocket (which is nucking futs) and look at this. Twilight Times, a minor publishing house, is forced to use a distribution channel to get its books in front of major "independent" e-bookstores. Why? From the posts it seems like Twilight (and the author) have been in direct negotiation with these e-bookstores to get them to sell the book so what possible value does the distributor add to the process?
Ahh yes. Typically, as we recall from Fictionwise/Overdrive, it handles the DRMing because publishers and e-bookstores are too stupid to do this themselves. And in classic middleman style it then requires this optional step so that even if you don't want to add DRM you have to.
If you want a reason why Baen makes money at this ebook lark selling books at $5 a pop and other publishers have problems, even with prices over $15 then this could be why.