[Greg Anos]

All of this is fine and good from the publisher side. Let's look at it from the crook side. Furthermore I'm going to grant an unbreakable DRM for your books. No crook cracking and reposting. This is based on the PD work I've done for PG Austrailia.

Dread Pirate Roberts wants to digitize his library. He is ticked off because nobody will sell him a non-DRM copy of his books. So he decides what he will pirate his books. What does he need to run up the Jolly Roger? 1. A computer. OK, he already has that. 2. A scanner. Most cheap consumer printers offer scanners for an extra $20 as part of the package. But put $20 on the bill. 3. OCR software, better than what the printer scanner has. That's run another $100. So the price is $120 as a one time charge, plus labor for each book. How much labor? I have found that for a double proofed book, it takes about 14 hours labor for a 300 page book. One hour for scanning, one hour to OCR conversion of scans, and 12 hours to proof and correct the text.
That's what The Crystal Button (1890) took for PG Australia.

Dread Pirate Roberts may settle for a single pass proofing, which tends to leave about 1 error per 5 pages, (which you see a lot in commercial e-books.)
Cutting the labor down to 8 hours. He may or may not spend another hour putting hyperlinks in. He then makes a rude gesture and uploads the result onto the Darknet. Now any other pirate who wants it can download it.

I have gone to this length to show that the <cost> to create a pirate version, competitive with a commercial version. If a commercial version can't be created as cheaply, then the copyright holder could literally pirate the "pirate" version, and sell that, costing nothing for the conversion.

That's why those of us who've done P.D. work just don't buy the "high" costs for e-books. We've done conversions from paper to HTML, and know wherefore we speak. Now this is for non-image heavy fiction, but those are the prices we are complaining about.

From the reader view point, why be a crook for $5? Not worth it. Make it $25 or more, and people start hoisting up the Jolly Roger. Make it unavailable at any price, and you've got buccaneers all over the place. Hollywood figured this out back in the 1990's. They used to sell VHS move at 60-80 dollars a crack, because people were going to pirate them. And at those prices, people did! Nobody but rental houses bought them, people rented then and pirated them. That's how the Blockbusters in the world got started. Low volume and low profit. Then the trialled selling a movie at under $20. They were swamped by the inidividual demand for the former pirates for the movie and made bundles. Thereafter, Hollywood went the cheap model and the video revenues now exceed the theatrical revenues. And Hollywood was dragged kicking and screaming every inch of the way to all this revenue.

Either a publisher can strip down and compete at those prices, or they'll eventually fail. They pick. They'll never succeed in making a superhighway by paving over existing cow trails, as we say in Texas.