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I voted for High Prices.
When online CD retailers have a sale, they are swamped with orders. Yet for years the music industry has said that no one wants to buy their product when it can be obtained for free via piracy. It seems clear to me that the list price of CDs is too high.
I think this is also true with eBooks. The publishers invest their money in copyrighted works, not public domain works. The no-charge pd books can be compared to the pirated downloads of CDs. There are only so many hours in the day, and if people are devoting time to books or music they obtained for free, they will not have the time to devote to enjoying what the industry is selling for big bucks.
Even with the DRM and format confusion, I think that if the publishers charged for an eBook only 25% of the list price of the corresponding hardcopy paper book, they would find that they will make their money in volume.
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