I'm obviously a big fan of crowdfunding platforms like Kickstarter, but I've always argued that it's just one of many models that content creators can use to succeed today. In fact, for a long time, I've felt that the biggest thing that was missing from Kickstarter was any sort of ongoing payment system. It's entirely project based, and thus it's not the best tool for ongoing revenue. For many years I've been interested in ideas for more ongoing revenue streams, and even proposed the idea of "subscribing" to a band's output nearly a decade ago. So it's good to see that some folks are exploring some of these ideas in much more detail.

I met Jack Conte a few years ago, after having written about him and his band Pomplamoose a few times. I'd always been impressed by Pomplamoose's ability to really connect with their fans and to build a way to support themselves via that strong connection. But in my brief interactions with Jack, it quickly became clear that he thinks deeply about different ideas for revenue models, and so it's little surprise that he's now built what seems like a pretty cool platform for ongoing support for content creators. It's basically a platform, like Kickstarter, but rather than backing a project, you back the production of certain types of regular content. So, for example, you could promise that you'll pay $5 every time Jack releases a new video (and you can put limits on how much you pay, so he doesn't get away with suddenly releasing 1,000 videos at once). It's called Patreon, and it's got a nice, simple video explaining how it works: I'm sure some will argue that this is just a "paywall," but it's actually the opposite of that. People aren't paying you to get access to the content. The content will be available elsewhere (often for free). They're paying to support your continued production (i.e., supporting future production, rather than paying to access past productions) and they can get extra benefits (added value) as supporters, such as Google Hangouts with the creators. Some of this is quite like a few of the popular subscription options in our Techdirt Insider Shop, though rather than monthly, the amounts are triggered per creation (I'm not sure that would work for a blog like ours that produces a bunch of content every day, but I could see how it would be quite cool for less frequent types of creative endeavors).

Either way, I'm glad to see some new platforms popping up like this. For a little while, it had been getting kind of annoying to see just how many Kickstarter clones were popping up (including a new one from Donald Trump?!?). You never know, of course, if Patreon will catch on, but conceptually the model makes a lot of sense for many types of content creators. In some ways, it seems like a better model for connecting with "true fans" than something like a Kickstarter. While Kickstarter has the appeal of "this is a big event, join us!" it would be nice to see some more ongoing, sustainable model platforms become popular as well.

You've heard the rumblings before. Free doesn't work. Or perhaps it was that free doesn't work for big time franchises. More specifically for video games, you may have heard that when a game goes from paid to free it's a sign that it's a dead game. The mantra persists, despite examples like The Lord of the Rings and Dungeons & Dragons showing the exact opposite can be true, where going free results in a significant uptick in revenue. There is still this fear in the hearts of game producers and, as we all know, fear leads to doubt, doubt leads to anger, and anger leads to the dark side of gaming.

Yet redemption can be had, if there is still good inside a game. The latest example of this is Star Wars: The Old Republic, an MMO that was once fee-based but is now free and has realized massive revenue returns as a result. EA Labels Emperor Frank Gibeau took time away from misunderstanding what DRM is to remark on the success of the new model.

“Since it was induced in November, we’ve added more than 1.7 million new players on the free model to the service,” said Electronic Arts president of labels Frank Gibeau. “And the number of subscriptions has stabilized at just under half a million.”

“The really interesting thing that’s happening inside the service right now is monthly average revenue for the game has more than doubled since we introduced the free-to-play option. And as we look forward, we’re going to continually invest in new content for the service and for players every six weeks or so.”

Oh, look, you give your customers what they want at the prices they want it, build up a massive fan-base, and a years-old game still ends up putting money in EA's pockets. It's a shame they haven't tried a similar strategy with other EA games like SimCity, instead choosing to lock the game up tighter than Han Solo trapped in carbonite with an always-online requirement nobody wants.

Still, it's nice to see that EA isn't above experimenting with better gaming business models, even if they did so in this case with an older game in which they had very little to lose. Here's hoping the company translates this success into a wider philosophy.

Not this again. Back in 2011, we first discussed why it was silly that some people got upset that someone rich and famous would use Kickstarter, as if the platform was only allowed for unknown artists. That was about Colin Hanks, the son of Tom Hanks, financing a documentary via the site. Since that time, the argument has popped up a few more times, including when Amanda Palmer used the site, when Bjork tried to use the site and when the Veronica Mars movie was funded via the site. Most recently, it's been aimed at quirky actor/filmmaker Zach Braff for his Kickstarter project, called Wish I Was Here. Braff set a goal of $2 million, which was raised very quickly.

And that's when some people got angry. Just as before. But it's a small group of people. There are at least 36,000 people (i.e., those who have funded the project so far) who did not get angry. Why? Because they like Braff and want to support him. I'm curious if the people who are attacking Braff for using Kickstarter ever have watched one of his TV shows or seen a movie he was in. Because, in that case, they'd be paying the same sort of thing... but most of that money would be going to a giant corporation, rather than to the actor himself. So what are they complaining about?

In a (slightly over-defensive) interview video, Braff points out that he's always been about connecting and engaging with his fans, and this is just one more way to do that. Frankly, he's more defensive in that video than he needs to be. He's got nothing to be defensive about. He notes, accurately, that he's long been known as someone who engages deeply via social media, especially Twitter and Reddit where Braff has been active for years. He also talks about his own obsession with Kickstarter, and how great it was to get the various updates on projects he'd funded, and how he hoped his fans would enjoy getting updates about the movie making process. And, yes, he's backed a bunch of projects himself, including the Aaron Swartz documentary.

For the life of me, I can't see a single logical argument for why people are upset about this, other than (a) they don't like Braff or (b) they're jealous of him. Neither seems like a particularly compelling reason for why Braff, or any famous person, shouldn't use the platform. The two most common arguments seem to be "he's rich and should fund it himself." But that's stupid. First off, he's probably not quite as rich as you think, and second he's made it clear over and over again that the budget is much higher than the amount he's raising and he's putting in an "ass-ton" (his quote) of his own money as well. Also, if you think that, don't fund him. No sweat off your back. For his fans who like him and want to support him, so what? The second argument is that this means he gets the money instead of some struggling filmmaker. However, as he himself has pointed out, the data suggests something entirely different:

I have something every detractor doesn’t have: the analytics. Most of the backers of my film aren’t people on Kickstarter who had $10 and were deciding where to give it, and then gave it to me instead of someone else. They came to Kickstarter because of me, because of this project. They wouldn’t have been there otherwise. In fact, a lot of people who didn't know about Kickstarter came and wound up giving money to a lot of other projects too. So for people to say, 'That’s ... up; you’re stealing money from documentaries' is just not a sensible argument.

All he's doing is the same thing we've been arguing for years is the business model of the future: connecting with fans and giving them a reason to buy. Braff has done exactly that, and has built up a huge and loyal following who are really excited about this project. As we pointed out when Amanda Palmer raised $1.2 million on Kickstarter or when Louis CK made over $1 million by selling direct off his site, the fans who are buying in aren't disturbed by how much money is being made. For the most part, they seem thrilled to be a part of something amazing.

I think that's the key thing that the detractors simply don't understand. This is about two key things: being part of an experience and a community. It's not about "a movie," but about much more than that. And, even specifically around "the movie," people should be supporting what Braff is doing, because funding it this way means that it's going to be Braff's vision for the movie, rather than a giant Hollywood studio. A few months back, Jonathan Taplin, a filmmaker and defender of the old system, told me during a debate that no real filmmaker would ever use Kickstarter. At the 40 minute mark, he goes on a condescending rant saying sarcastically that "major filmmakers" could never possibly use Kickstarter because "the average" film only raised $10,000. But the average is meaningless for something like this. Furthermore, he goes on and on about (his friend) Martin Scorcese getting to do a movie he wants, and how that would never work via Kickstarter. But we're seeing over and over again the exact opposite. When a star with a big following uses something like Kickstarter, it gives them more ability to make the movie they want without outside interference.

Now we're seeing, quite clearly, that "major filmmakers" can use Kickstarter to do interesting things, and somehow, I get the feeling that it's the same sort of people who insisted they couldn't possibly make it in the first place who are now complaining that they are...

We've talked a great deal about how content creators handle derivative works in the past, be it musicians, TV/film makers, or authors. The responses are predictably varied, with some creators embracing derivatives, some abhorring them, some that draw the line on commercial use, and others that use derivatives to build even further works. The least controversial of the lot is work done by fans, of course. Few creators want to go to war with fans that love their work so much they make fan films, or write fan fiction. But what would happen if a creator not only allowed derivatives of their work, but actually made the conscious decision to build an entire platform for it themselves to encourage the practice?

Well, you'd end up with something like h2g2, otherwise known as the fan-created build of the Earth-version of the Hitchhiker's Guide To The Galaxy. They recently posted on April 28th to celebrate their 14th "birthday", congratulating the community on making the site a wonderful place for Hitchhiker fans to contribute with their own submissions. They also rightly said thanks to the book series' author, Douglas Adams, as it was Adams who started the site from the beginning.

Although h2g2.com might not yet quite be a complete guide to Life, The Universe and Everything it is a thriving online community, where Hitchhiker's fans and many other creative folks can work on The Guide and help fulfill Douglas' vision of a real-life, mostly useful, Earth Edition of his fictional Guide (not, incidentally, a real-life version of the Encyclopedia Galactica).

Today we welcome everyone, active and returning researchers, new researchers, visitors and viewers, to celebrate. Thanks to Douglas Adams, who saw a way to bring his idea of the Hitchhikers Guide to the Galaxy into an actual Guide, the Earth Edition, we have been around for 14 internet years!

Resulting in, or from, the immense popularity of the Hitchiker series, h2g2.com is hugely popular with fans. Whether the books caused the site's popularity more than the site has caused sales from the book is an unknown, but that each has an effect on the other is undeniable. The site's history is interesting and somewhat convoluted, but what is unquestioned is Adams' wish to embrace fans of the books and set them off on building their own guide of Earth. And, while ownership of the site has transitioned several times, from Adams to the BBC and so on, it is back in the hands of die-hard fans that have an allegiance to its community. Hell, the site puts out its own broadsheet newspaper.

All of this thanks to an author who wasn't misguided in seeing derivatives as a threat, but rather as a wonderful way to connect with fans, all the while pointing them back to the original works off which they were based.

We've talked many times about how patents are often used as weapons to kill innovative startups that threaten legacy players. Ryan alerts us to a perfect example of this in practice. 1-800-CONTACTS, the giant online contact lens/glasses space, is trying to kill off an upstart innovative competitor called Ditto. And, no, this is not a case of Ditto copying something that 1-800-CONTACTS invented. The details are astounding. First of all, Ditto's main innovation is doing something that 1-800-CONTACTS does not do (though it has since announced plans to introduce something similar), which is to let buyers of glasses take a quick webcam video of their face, and then be able to see what they would look like in various pairs of glasses. That's pretty cool. The 15 person startup got some funding for this... and then promptly got sued by the bigger company. And 1-800-CONTACTS' actions in this case show that it set out, deliberately, to kill off this innovative startup:

It appears that 1-800-CONTACTS' CEO went onto Ditto's website the very day it launched, presumably to investigate the upstart competitor's new technology. Having seen Ditto's product, 1-800-CONTACTS then went out and purchased a patent from a defunct company that claims to cover selling eyeglasses over a network using a 3D model of a user's face.

But here's the thing: 1-800-CONTACTS does not appear at all interested in licensing the patent to Ditto. Rather, it seems determined to put Ditto out of business. Period. So it's suing Ditto in federal court in Utah, hundreds of miles from Ditto's headquarters in California.

Yes, you read that right. First, the CEO went and saw the site, then sought out and bought a patent that could be used against the company (in this case, US Patent 7,016,824), then brought suit in a very inconvenient jurisdiction and, finally, isn't even entertaining the idea of licensing the patent. And, of course, the patent itself seems highly dubious in quality. Ditto thinks it would win the lawsuit, but spending what little money it has on litigation will almost certainly kill the company anyway. Even if it wins, it will likely lose by using up its money not on innovating, not on delivering a great service to people who want it, but on fighting a bully.

The EFF is asking for help in finding prior art for this patent, via StackExchange's prior art section, in the hopes that the patent can be invalidated quickly. In the meantime, though, shame on 1-800-CONTACTS for being an anti-innovation legal bully. Of course, this isn't the first time we've written about 1-800-CONTACTS doing dubious things against competitors. In the past, it's sued competitors for keyword ads, despite having lost similar cases and despite buying keywords on competitors itself. It seems that the company is willing to use the legal system to crack down on competition whenever it can, which makes it seem like a company worth avoiding when looking for any kind of corrective lens solutions.

The SimCity debacle that exploded all over the web in March has quietly faded into the background. EA's claims that the game was always meant to be a quasi-MMO and that servers were handling a majority of in-game calculations have become a lot less incendiary now that servers are handling the load competently. The outrage has faded, replaced with pockets of disgruntled users, most of whom are upset with advertising-as-DLC and major updates that make the experience worse.

Why did this fade so fast? One reason is the attention span of the web (heavily generalized, and I am including myself in this "web" group). With a million other things begging for attention, the flames sputter out and the pitchforks go dull. But there's more to this than the net's lack of focus. EA itself helped extinguish these fires by doing nothing more than shutting down its outgoing communication. John Walker at Rock, Paper, Shotgun dives into this "non-story" created by EA's PR team's decision to simply drop the discussion.

When RPS first broke the story [that servers weren't handling most of the calculations], only a few other gaming sites picked up on it. It was a big story, unquestionably, so why was it left alone by so many? That breaks down into two parts. Firstly, and most importantly, the story was based on an anonymous source. We of course know who the source is, and verified it until we were very comfortable running the story. But that wasn’t possible for other sites – they had the choice of running the story based on a “rumour” from RPS, or not at all. And that’s understandable – repeating rumours is often the gaming press at its worst, and with no means to verify our story, repeating it could have been risky. It could easily have led to legal threats being thrown all over. Which brings us to the second part – they needed some sort of confirmation, or at the very least a response, from EA to offer ‘balance’.

Not reporting the story couldn’t be immediately dismissed as capitulation, being in the pocket of EA, cowardliness, etc. (Not that it excludes it, of course.) What most sites would have done was immediately fire off an email to EA and Maxis asking for them to provide comment. We, of course, had done the same. And here’s where the power of silence played its first part.

EA and Maxis simply ignored all those emails. Sites may have received a, “We’re waiting for a response,” from their regional PRs, but that was it. And so if you’re running GamePow.com, and you’ve decided you can’t run RPS’s anonymously sourced story without giving EA a response, ta-da – no story on GamePow. And EA knows that.

EA's decision to go silent makes perfect sense. Anything it had said about SimCity's failings had been directly contradicted by players' experiences. Anything that wasn't instantly refuted by modders poking around in the code was couched in spectacularly clueless PR speak that gathered instant derision. At some point, EA wisely decided to cut its losses and simply freeze out the gaming press.

When RPS attempted to get a response from EA on its debunked claim that its servers were doing most the calculations, the freeze set in. On March 12th (the day the story ran), Maxis claimed a response would be arriving "shortly." Another non-response about the pending response arrived the next day. Walker and RPS didn't hear from anyone at Maxis for the next four days.

Then on the 16th March, Maxis’ Senior Director of Worldwide Communications, Erik Reynolds, tweeted me out of the blue.

“No response was my fault not UK PR folks or Maxis. Not a PR tactic, just had to unwind the complex issues and gather right info”

Reynolds then tried to dodge making a statement by claiming EA didn't want to keep repeating the same information it had been handing out since last year's Game Development Conference (where it claimed the internet connection would only be needed to boot the game, at which point players could take their games offline). Walker pointed out that EA's story had actually changed several times since the GDC. At this point, the Maxis spokesman shut down communication, apologizing for the lack of response, but never actually bothering to respond.

EA/Maxis played it smart by simply refusing to comment on the stories. Once the (disastrous) PR efforts were shut down, all gaming sites could do was report their own observations without comment from the game's producers. Love or hate EA (most of us tend towards the latter), it realized something many entities that have tangled with the internet (and lost) haven't: if you don't give writers any ammo, they'll stop shooting.

Silence is a powerful weapon in the industry. The mad truth is, when it comes to gaming controversies, if you ignore it it will go away. This article is a fairly futile attempt to not let it, and to make sure our readers know that EA and Maxis never spoke to us, never responded to any of our questions, and never sent so much as a statement.

The corollary to the Streisand Effect is "the only way to win is not to play." Many entities fail to realize this. EA figured it out. All it had to do is sit back and let the internet entertain itself by pouncing on month's old statements and regurgitating the most recent missteps by the PR team. Many of those in the gaming journalism field still strive for accuracy and balance, but in doing so, they play right into the hands of recalcitrant developers and PR teams.

Silence is by far the most effective means of spreading silence. With a press so frequently under the spell of the belief that one must offer ‘balance’ to report anything, stories will simply go unreported if one side refuses to comment.

This is why some sites have devolved into little more than dumping grounds for press releases. This is all some companies are willing to throw the public's way, a strategy that buries controversy and ensures a "united front" of "journalism" that skews in a favorable direction. Walker says he has written this article to point out how EA froze the press out and got away with it, turning an antagonistic situation into nothing more than internet background noise. It sold over a million copies of an intentionally broken game and is now using its lack of interaction to pave over the ugliness in its recent past. Allowing a company to gloss over its failures with a finger over its lips is unacceptable. Here's Walker's advice to game journalists who are used to seeking comments before going to press.

[Seeking comment] effectively boils down to asking for permission to run a negative story about a company. Journalists need to pull their heads out of their arses and start having the integrity to run stories they know to be valid, and then asking the corporation for comment.

This doesn't mean publishing every wild rumour and running irresponsible articles based on little more than hearsay. What this does mean is that journalists should be confident enough in their own efforts (and research) to run unfavorable pieces without feeling a confirmation from the subject's PR team is needed before the post can be considered valid.

This is just as true with the non-gaming side of journalism. If the subject has refused to comment, state as much and move on. Silence is an effective weapon but it can be turned against those who wield it in hopes of muting criticism.

Note: I started writing this post up prior to the unfortunate news that longterm Deftones bassist Chi Cheng passed away, after spending much of the past four years in a coma following a car accident. Sad news.

One of the points we've tried to make over and over again is that people who are downloading unauthorized copies of music, movies and other content are often huge fans, or have the potential to be huge fans. So it never made sense to us that some content creators treat them like criminals. Every so often, we see someone say something silly like "I don't want fans like that." People say that, but they almost certainly don't mean it, because it would likely mean the loss of a huge percentage of their biggest fans. As we've seen over the years, plenty of enlightened content creators recognize the basic situation and have happily embraced it. We can add Deftones guitarist Stephen Carpenter to that list as he explains eloquently why he's happy about people downloading his music.

"I say hallelujah to them. I say it for only one reason, the truth is people who download your music are your fans, or people who are potentially going to become your fans," he said. "And if you're going to be upset that someone is interested, or becoming interested in your stuff, then what's the point? What are you doing?"

He continued: "If it's all about money then certainly you're going to be offended. But if your intent is to enjoy what you're doing and have others enjoying it, then it should be a no brainer. I welcome all people to download the music. They won't be the first, they won’t be the last, and for anyone to fight that ... it's futile."

He later says he "can't be offended by someone enjoying" his music. He notes that he's watched the internet and downloading from the beginning and he hasn't felt he needed to change at all.

The discussion is from a half hour interview with Loud Guitars. The full interview (about half an hour) is fun to watch, with a lot of discussion on having a positive attitude on all sorts of things, from life to the internet to the music industry to just making music. He also talks about how great the internet is beyond just the downloading issue. He talks about how things like YouTube can help make great musicians famous and kickstart a career and how awesome that is (in fact, he has a "hobby" of searching YouTube for great guitarists to inspire himself to push himself further). Once again, a nice counter-point to those who have been arguing that YouTube is somehow harming artists or that fans should be treated like criminals.

Unless you've been totally under a pop-culture/music rock for the past few months, you've probably heard of Macklemore and his hit song (and video) Thrift Shop. Now at well over 200 million views, the song itself has been at the top of the charts and has sold over 4 million copies. In case you somehow have missed it, or in case you just want to watch it again, here's the video: The song itself was released last year, and built up a lot of buzz throughout the fall, but completely exploded at the beginning of this year. While I became aware of the song a while back, I didn't realize until recently that Macklemore is actually yet another story of a totally independent artist who found success not by signing with a label and having them throw a ton of money into promoting him, but by carving his own independent path (and using YouTube to connect with fans). In many ways, his story reminds me of Alex Day's.

A few weeks ago, Macklemore sat down with Chris Hardwick on the Nerdist podcast and it's great. Beyond some interesting discussions about sudden fame (and then doing laundry in the communal laundry room of your apartment building days after appearing on SNL), he does talk a little about being a successful musician without a label. Chris asks him about the no label part and mentions what a great story it is:

Chris: To see you and Ryan Lewis come out of Seattle just making stuff you like making, with no label, and oh you're at the top of the charts, and all these people are talking about the song... that's just a great story.

Macklemore: Yeah, I appreciate it. It is a very cool story. It's what you always hope for in terms of picking the independent path. It's cool to see that that's been a focal point. It's not just "Thrift Shop"; it's this kind of do-it-yourself attitude behind the music we've made -- that is also within the midst of this thrift shop song. That these two dudes chose to go independently, to turn down the labels. That the music industry is changing. That it's evolving. And to be at any sort of place where we're at the forefront of that, at the moment, is exciting.

Chris: It's so inspiring to so many young people who maybe -- and I think people are more and more used to the fact that they can just make stuff in their bedrooms and it can turn out to be huge. But every time it happens, it's that much more inspiring to a younger generation of people who go... 'there's no excuse any more to not go out and make stuff that you want.'

Macklemore: Absolutely. And that's what we watched people that came before us that have done it independently, whether it's Sub Pop, or whether it's... Mac Miller did it independently. And he had every major label hollering at him with huge seven figure offers and turned it down and still went number one on Billboard. There's examples of it that came before us, that had us say 'I think that it can work -- I'm not sure that it can work." But, at the end of the day, what's most important, and creative control is number one for Ryan and I. It's a no brainer.

Chris I'm sure you've been approached a million times at this point, but you still don't want the infrastructure of a label?

Macklemore: Yeah, there's no reason to do it. With the power of the internet and with the real personal relationship that you can have via social media with your fans... I mean everyone talks about MTV and the music industry, and how MTV doesn't play videos any more -- YouTube has obviously completely replaced that. It doesn't matter that MTV doesn't play videos. It matters that we have YouTube and that has been our greatest resource in terms of connecting, having our identity, creating a brand, showing the world who we are via YouTube. That has been our label. Labels will go in and spend a million dollar or hundreds of thousands of dollars and try to "brand" these artists and they have no idea how to do it. There's no authenticity. They're trying to follow a formula that's dead. And Ryan and I, out of anything, that we're good at making music, but we're great at branding. We're great at figuring out what our target audience is. How we're going to reach them and how we're going to do that in a way that's real and true to who we are as people. Because that's where the substance is. That's where the people actually feel the real connection.

And labels don't have that.

So you sign up for a label. There's not some magic button they're now going to push and it means that people are going to like who you are. Or that they're identify with your vision or your songs. It actually comes from sitting down, staring at a piece of paper for months or years on end, trying to figure out who you are as a person, and hoping that it comes through in the end. But a label's not going to do that for you.

Uh huh. Once again, it makes you wonder what people are thinking when they claim that YouTube is putting artists out of work.

The whole episode is worth listening to as Macklemore has a great perspective on all of this, and it's interesting to hear him discuss the oddity of his sudden increase in fame and how he's dealing with it, without letting it go to his head. But considering how often we've had similar discussions about artists who choose to go independent, I thought some would enjoy that particular snippet especially.

We've pointed out time and time again that there are still roles for the former gatekeepers in various content industries, but those roles are changing, because they now need to be enablers, helping to do things that content creators can't do on their own. We've also pointed out that one thing that "direct to fan" and other offerings have done is give content creators much more leverage in dealing with those traditional gatekeepers. It used to be, if you were a first time author, you didn't have very much leverage at all. You accepted the tiny advance and crappy book deal offered to you, in which the publisher basically took control over your work almost entirely, leaving a tiny royalty for you should you ever earn back the advance. However, the WSJ recently wrote about how self-publsihed ebook author Hugh Howey (who wrote the hugely popular Wool "postapocalyptic thriller" and sold half a million ebook copies) then sold the print rights to the book to Simon & Schuster and the movie rights to Ridley Scott for around $1 million but was able to retain the digital rights to the book for himself.

That is how leverage works. It's also a recognition of where a publisher can actually help. Howey knows that he can sell the digital book himself. He doesn't need any help with digital production, distribution or promotion. However, the physical book is a very different story, so having a big publisher handle printing and distribution for the physical book makes sense -- and given the fact he didn't need the help of a publisher, he was able to negotiate this more equitable deal. He notes that other publishers offered more money for a complete package, but it was easy to walk away, knowing he was making plenty of money on his own directly with the ebooks.

As the WSJ notes, it's all about the shifting balance of power, such that publishers no longer hold all the cards:

It's a sign of how far the balance of power has shifted toward authors in the new digital publishing landscape. Self-published titles made up 25% of the top-selling books on Amazon last year. Four independent authors have sold more than a million Kindle copies of their books, and 23 have sold more than 250,000, according to Amazon.

Publishing houses that once ignored independent authors are now furiously courting them. In the past year, more than 60 independent authors have landed contracts with traditional publishers. Several won seven-figure advances. A handful have negotiated deals that allow them to continue selling e-books on their own, including romance writers Bella Andre and Colleen Hoover, who have each sold more than a million copies of their books.

Simon & Schuster even admits that it wanted all of the rights, but that under these "unusual circumstances" it had no other choice. I get the feeling those "circumstances" will become less and less "unusual" going forward.