I see lots of articles like this, talking about consumer confusion over ebook pricing. The lead-in goes something like…aw, I’ll just quote it.
Publishers are making a killing on e-books because they cost nothing to produce, distribute and sell and are almost 100% pure profit. At least, that’s what many consumers think.
Another statistic often quoted in this article and similar pieces is that ebook production costs “10% less” than traditional books. Turns out ink and paper aren’t that expensive, etc. (Unstated: 10% less than what? Hardcover? Mass-market paperback?)
But to consider consumer attitudes, as the top-quoted article does, you need to take into account one other important factor: ebooks are licensed, not sold. This (often in combination with DRM) causes all kinds of problems, for instance the Hunger Games Problem. Buying and licensing are different things, and they’re not directly comparable. It would be like trying to determine whether a brick-and-mortar bookstore has fair pricing by examining how libraries work.
Holding a mere license to something, limited to a particular platform, without the ability to transfer, pass from father-to-son, share [beyond artificially limited horizons like '14 days'], or buy or sell at a garage sale makes ebooks a fundamentally different kind of beast. Some of the differences are subtle, but consumers are bumping in to them when they try and fail to do reasonable things with a book they “bought” (or at least exchanged money for). The inevitable demise of never-been-workable DRM schemes will help somewhat but won’t solve the fundamental problem.
So in the context of the DOJ case against Apple and several publishers, I see lots of people asking the question of wether cheaper ebooks are a good thing for the industry. I don’t think anyone will know for years, but as we move toward a fully licensed world, lower prices reflecting lower utility might be inevitable. Ebooks for many older titles are still unavailable or far more expensive than picking up an old, second-hand paper book–that is to say–too expensive. So prices may have nowhere to go but down. The big question: will publishers make it up on volume?