Baen/Webscriptions are profitable at $6.00/per book with no DRM, and before anyone says that's because it's the publisher selling directly, they have several other publishers now selling through Webscriptions at the same price point which means it must be working or the number of publishers would have decreased rather than increased.
So we can tell that at a minimum - selling DRM-free eBooks at $6.00 each (at least for books currently in mmpb) is a viable business model.
That works out to about 3/4 the cost of a conventional SFF mmpb.
It certainly looks like we've found somewhere to start.
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