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Originally Posted by rlauzon
Here's where you are (partially) wrong. You are right in that you cannot eliminate the retail channel. But the costs of retail are greatly reduced for eBooks.
Retail costs for a physical product are for shelf space, stocking fees, taxes for stock on hand, etc. Most of those costs disappear for eBooks, and the rest of those costs are greatly reduced. So instead of taking a $3.50 cut, a retailer takes $1 for an eBook.
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I agree that marginal retail costs for ebook are significantly less than pbooks if only in storage and retail space. The problem is that, for now, because the market size is slight, the amortized fixed costs are much higher on the per item basis. Ebook stores sell fewer copies than pbook stores. Granted, they could lower the price and hope to make it up on volume, but the current total market size versus the total purchasing market size would have to be a great deal larger to recoup the loss.
As ebooks mature and the market grows, I would expect to see $3.99 or $5.99 ebook "paperbacks" a la iTunes. Even so, you would need to have a large reading market, and I'm just not that confident that in the future the percentage of people who read for pleasure will stay even at its current rate.
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Originally Posted by rlauzon
Since copying of an eBook is effectively free, an author can offer it through many retail channels at once. There is no shortage of copies like there is in the pBook world.
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Not undercutting your dealer is not an issue of supply, it's an issue of business survival. Trust me, you do
not want to undercut the people who are selling your product for you or they will simply stop carrying your line. It's one of the ultimate no-nos in business. The only way you can ever do it without burning your bridges is by "fencing" your deal so that casual customers are unaware or ineligible. And that can offend customers. Ah life!
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Originally Posted by rlauzon
Also related to this is the selling of eBooks today at greater than hardcover prices.
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I agree, but I can also understand some of where the publishers come on this. If a book is not selling very well, the publisher may not want to bother with releasing a "paperback" priced version, if only because of the cost of a new ISBN number.
One of the downsides of ebooks is that, unlike pbooks where unsold copies are "remaindered in place" - i.e. sold for a fraction of their list price in order to save the cost of shipping them back - it's actually more expensive it terms of time and labour to reduce the price of an existing ebook. And since there is no anticipated savings on shipping or remaindered copies, there's little incentive to decrease the price.
Personally, I wish the publishers would get smart and adjust their ebook prices in line with whatever their current market price is for the same title. I know I'd buy more books if that were the case because I hate feeling ripped when buying a book.