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I personally think that pricing is the big sticking point.
Say every dead author still in copyright had his/her estate sell their e-books for a $1 a piece. I would be in hog heaven, so to speak, spending pretty much all the spare money I have. (I read about 400 pages a day, so I can go through older, shorter books quick)
But instead, most sell their e-books for $9.99-$12.99.
For instance, look at Baen vs Phoenix Pick. Both sell old backlist books, but Baens are $6 or less. Phoenix starts at $6, but is generally $10.
Neither use DRM, but I regularly buy from Baen, but I haven't bought a single book from Phoenix (though I did get a couple of their freebies).
Heck, in a few cases, it's the same author. And interestingly enough, for living authors, the prices at Phoenix Pick tend to be reasonable. Only with the dead ones it's expensive.
In the PC game arena, another great example would be Steam. A lot of people buy games from it over DRM free sources (like Good old Games)? Why, partially because people really really like Steam, but also because they frequently have sales with insane discounts, 50-80%.
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