Adobe general manager Bill McCoy writes in his
latest blog entry about the current issue of e-book pricing.
While I agree that lower eBook prices are both feasible and would stimulate adoption, which publishers may not have been overly eager to have happen, I believe the key way publishers have hamstrung eBook adoption is by limiting supply. Any new format needs a critical mass of content to succeed, and that's not a paltry 5% of annual new titles. Certainly during the last eBook hype boom (circa 1998-2002) publishers weren't rushing to make all their content available. However, a sea-change is clearly under way.
The microeconomist in you knows that the price of a product in a competitive (!) market depends on supply and demand. In theory, the main determinants of supply will be the market price of the product and the cost of producing it. The more the producer will get for his product, the more he is going to produce. Meanwhile demand depends on one's willingness to purchase at a given price level; generally a greater quantity will be demanded when the price is lower. Unforuntately this standard economic model fails in a situation where a market is dominated by a small number of sellers who can adjust the supply and price of a good at will.
I suspect the high prices of e-books are deliberate. Publishers are afraid that they cannibalize sales of paper books if e-books became ready for mainstream. So they are going to keep their artificially inflated prices, and I am afraid adding supply, as Bill McCoy suggested, won't make a difference here.