"But publishers were concerned that lower prices would decimate their profits. Amazon had been buying many e-books from publishers for about thirteen dollars and selling them for $9.99, taking a loss on each book".

Publishers are fucking stupid, aren't they?

Further evidence: the dollar figures that Auletta gives. For a $26 hardcover, the wholesale price is $13, out of which the publisher pays its costs and earns its profits. The author gets $3.90, production costs are $3.00, and the cost of returns is $5.20, leaving a profit of $0.90.

There's a very important number up there that has been totally ignored by all the discussions I've seen so far on this subject. Even I have focused on the costs of book production, wondering if there's enough savings there to justify a lower price. But I missed something, and so has everyone else: cost of returns.

There are no returns of e-books. That means an additional $5.20 in the publisher's pocket -- giving them a profit of almost SEVEN TIMES as before ($6.10 vs. $0.90).

This doesn't address the other factors in e-book pricing, such as the lack of any kind of resale value. E-books are convenient but seriously inferior products -- they SHOULD cost less than the paperback version.

the publishing industry is a pure parasite, worse than the music industry. almost no editing is done these days, and authors make beans. and at the same time, ten dollars for an ebook is too expensive?

full disclosure: I work for a relevant party, but not on anything remotely related to ebooks, publishers, or any of that.

I, for one, do not welcome our new e-book overlords. I doubt I will seriously read any e-books. I would *much* rather sit in a chair with a book made of paper and leaf through the pages, cribbing notes in the margins, putting my bookmark in a page, and leaving the book in my knapsack so I can read it when I'm camping under the stars.

I suspect that only "best-seller" fiction will be the real market here. Relying on battery-powered buzzing technology to "access" something as sensual as a good book (weight, typography, paperfeel, cover art) will always be second rate.

I predict fewer books will be actually printed, but they will become more special and important. This trend is already happening, cf. McSweeney's works. Ink-on-paper lasts longer, as any archaeologist can tell you, than anything digital.

Like music where the focus has turned back towards the live performance, digital books will be easily traded and disregarded, but the published item may become revered.

@5, on one point, you're definitely wrong. There will not be fewer books printed, there will be many more; and they will not be better, they will be far worse. For every copy of McSweeney's there is a nearly infinite number of cheap crap items being printed. Your prediction reminds me of people saying the computer was going to destroy the paper industry. Instead, the laser printer increased it a hundred-fold.

More book titles were printed last year than in the entire decade of the 1980s. This trend will continue.

This is the most thorough piece I've seen on the publishing industry in identity crisis mode and, as such, it's thoroughly depressing. Book as literature isnt even part of the conversation - book as product is the only way these folks speak. It's a business, I get it, but jeez, I like to think that it was once upon a time a businesss that cared about it's product on some level...

This is why I was in bookselling, not publishing. Conversely, it may be why I'm not in bookselling any more...

Also, for those of you out there always riding Paul for being anti-Amazon - it's awfully hard to feel good about them after you reads this article. They're the techie schoolyard bullies in the playground (and not simply aboout the pricing model, Fnarf).

@7, you're kidding yourself if you think Apple's going to stop the bullying, Michael. Quite the opposite.

You're right. They're all bullies.

They're not bullies. They're crafty devils.

Surrender, Dorothy.

Please shut up, Will. The grownups are talking.