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I'm all for lower priced ebooks but to tell the truth the publishing industry just isn't built for it yet and they will need to do some slimming down if its ever going to happen.
eBooks sales are growing at a crazy rate (170% or something like that) compared to the decline in book sales but the problem is that their is a much smaller base that eBooks are growing from compared to paperbacks. Paperbacks are still the lifeblood of a publishers income.
The only reason why unknown authors can get published is because there are James Pattersons that are selling like crazy for prices not far above what a new author would sell for. Every book sale has to account for the risk not only of the book that you are buying but the book that you're not buying because the costs are mixed. It would make sense from a business standpoint to charge $50 for a James Patterson book because you know people want it and $0.50 for a new author because its not known how many people will want it or better yet why even print it at all. I think publishers are afraid to move ebook prices substantially lower than hardback and paperback books because it may dramatically shift consumer attitudes toward ebooks and people will buy them up in droves.
How many people that never bought a book in their life are going to because an eBook is $5? Not many because they could probably get the same book used on amazon for $2 if they wanted to. The issue with the publishing market share between Hardcover, paperback and ebooks is that it is mainly based on cannibalization. The market for books is pretty much defined, there are people that read and people that don't. If you make ebooks much cheaper than paperback and hardcover books, there will not be a flood of new readers; old readers will shift from hardcovers to ebooks (more likely paperback to ebooks as people that buy hardcovers usually are more wedded to the format). That is a drastic drop in the profitability of the books being produced for a publisher. Therefore what a publisher would need to do is stop taking risks with new authors and stick with the homerun hits (established authors) but then that depletes your future revenue projections if an old author retires or moves to a different publisher.
Publishers are going to have to really sit back and find a new way to rationalize their business model. They are still needed for promoting (most new authors are not going to have a couple ten or hundred thousand dollars to go on a promotion tour for their book, unless they plan on murdering someone on youtube it might be difficult for them to get mass appeal). How will the publisher be compensated for its risk on these authors if they aren't getting the same upside? The answer is they need to cut their bloated costs which will take time. It will be interesting to see how the whole thing develops and I foresee a lot of news on major publishers revamping their business structure as eBooks become more prominent (a few of them may end up going under if piracy can not be stymied as new readers and ways to read ebooks are debuted) but ultimately they will have to give consumers what they want at a reasonable price or similar to music and mp3s, people will find it elsewhere
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