I had a couple of questions about e-book economics. So let me give my experience. I self-published a Porsche Buying & Selling guide. It is on sale as a paperback for £14.99. There were 250 pages, 100+ black and white illustrations, lots of line graphics and many words. The book went out of print around 2000. A reprint would have cost £3,000. I couldn't afford it.
A person I met suggested we turn it into a PDF e-book and sell it over the Internet. That's what happened. We then had about 216 individual Porsche model buying guides of up to 20 A4 pages with colour illustrations. We decided to price them at £5.00 each. They effectively cost us nothing. I wrote them, designed them, got the pictures and laid out the pages. My partner converted an existing web site.
We didn't have to print them, store them, transport them or pay any staff. £10.00 seemed too much, £2.00 too little and Porsche wannabee buyers could afford a fiver. When we did Ferraris we said Ferrari owners are richer and can afford £8.00.
These prices were off our own website. When I put them up on Amazon Lightning Source required a discount and 35% was used. LightningSource paid us monthly in dollars and we would get $70 to $250/month. After converting to sterling this would become £20 - £100/month. We made more money off our own site sales which were £200-£600/month from a set of books that now total 63.
We have moved to a different website and our costs include that site, credit card fees and the shopping trolley application (Cart) we use. But our pricing method is still basically 'what customers will bear and think is reasonable'.
There are only so many sportscar buyers in the world and dropping the price to, say, £2.00 wouldn't increase sales (my opinion) enough to justify the price drop. Equally raising prices to £10 or £20 would probably lose sales and not net us more money.
I think e-books are, as products, second rate in some respects. If customers print them then the result - on A4 copier paper with a ink-jet printer - is not that great. On the screen the pictures look pretty good. On copier paper they'll look poorish.
Customers could buy a £15-20 paper book and get a lot of the same information with better quality reproduction of pictures and a nice cover. PDF files don't have the same sense of ownership.
So we're not selling ownership. We're selling - hopefully - good, usable reference information that's accurate and reasonably priced and does a better job for a sportscar buyer of, say, a Ferrari 328 than a £35.00 coffee table Ferrari 8-cylinder car book.
I've tried selling porn e-books this way on Amazon. Sales have been disappointing. The problem is the Amazon search term. A Jaguar XJS buyer inputs 'Jaguar XJS' into Amazon to find books on the topic. There aren't many and ours is on the list.
A porn book buyer would put a search term into Amazon and get 10,000 hits and our book will be number 7,656.
The moral (in terms of e-books!) is that their title should be searchable and stand out by being in a small subject area.
I hope these points are of interest and welcome comments.