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the cost of digitisation isn't really an issue, it'd be something like $2k for your average book. Digitizing the titles you think will sell from a cost perspective wouldn't phase a publisher. The only owrry they would have is that being infinately distributable, overall sales will drop due to piracy ... or ... they will annoy the treeware distribution channel/don't have a viable distribution channel.
On a business model point of view - there is another business model, piracy! you just can't monitize it and there isn't a good model to bring this back to terms that publishers would see as necessary profits... at this point. I'm not sure it'll be an innovative publisher who will find the right model ... it could well be a new entity from left field that finds the model that will snowball.
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