In my case, using LeanPub, the way it works is as follows:

1. I choose a point in time to start 'publishing' (in my case with A4D it was after 3 chapters were written, first draft). 2. Users can start buying at this point, at a minimum price I determine (starting at 'free', or 4.99 and up). 3. Any user who buys the book gets DRM-free downloads in any format from LeanPub, and the book is on their permanent shelf on LeanPub, so they can download any newer version forever, free.

As an author, when I push a new update, I have the ability to also send a notification email to all subscribed readers so they know a new version is available—otherwise I can just silently update it (e.g. for smaller bugfixes in the text or slight corrections).