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I forget, all my figures above assume that the status quo is maintained.
They do not take into account the fact that ereaders are going to continue to fall in price -- just saw a video today about a new generation of android powered e-ink readers which will be much cheaper to produce. The executive in the interview said that a survey showed 60% of Americans would buy an ereader once they got below $100. I think that figure is too high, but still.
We're looking at <$100 readers in what, a year? Sub-$50 no-name knock-off readers in two years. Cheapo android tablets. Cheaper and cheaper smart phones.
We're looking at a future not too far from now where everyone is going to have a cheap device that serves as a reader...but if people find that it is too much hassle to deal with DRM, prices far exceeding the customers' perceived value, etc., they will flock to unauthorized copies. Like it or not, that is what they will do.
Customers have proven that they feel 99 cents is a fair price for a music single, which means about $10 for an album...although few people buy albums anymore because we all long ago learned that the music labels use one or two good songs to push a mediocre album...when given a choice, people mostly buy singles now.
What is the perceived value of a book? I think the $2.99-6 range for a novel is more than fair, would not hesitate to buy non-DRMd books for that. That is not the price for an "I have to have this book" price, but the "hey, that looks interesting, I'll give it a shot" book price.
Indy authors have quickly learned that 99 cents is a great "sampler" price, and while they only make 35% royalties from Amazon, the volume increase generally works for them.
I think many customers would be very enthusiastic about this price range.
I really hope the publishing industry learns from the music industry before they get Napstered to death.
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