OK, I’m just not buying that it should cost the same amount for an e-book as it does for a hardcover book.

David Baldacci, the best-selling thriller author, learned what some of his fans think when “First Family,” his latest novel, went on sale last month. Amazon initially charged a little over $15 for a version for its Kindle reading device, and readers revolted.
[…]
Publishers are caught between authors who want to be paid high advances and consumers who believe they should pay less for a digital edition, largely because the publishers save on printing and shipping costs. But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.

It turns out that Amazon has been underwriting the cost of the hardcovers, charging $9.99 but paying the publishers more so that it can sell more Kindles:

For the moment, say some publishers, Amazon is effectively subsidizing the $9.99 price tag for new book titles in digital form by paying publishers the same $13 it pays them for a new hardcover title with a list price of $26. It’s a classic “loss leader” situation. Although Amazon won’t comment on the arrangement, the online bookseller is using low-price e-books as a lure to persuade consumers to pay $359 to buy a Kindle, or $489 for the new, larger Kindle DX.

Then it didn’t make sense for them to release the free IPhone/iTouch app because there is no incentive for me to buy a Kindle when I can read books on my iTouch. The savings in books would not justify spending $359 on a Kindle. If I want to save money on books, I can go to the public library.
I think the prices they are charging on the mass produced books should help offset the loss in revenue from the hardcover books.
I’m buying more books from Amazon because I can get a hardcover for a lot less than in the stores. I never buy hardcover books so they are at least getting my 10 bucks when they were getting nothing before (I would have just gone to the public library to check it out). In the long run they are probably selling more books this way.
BTW, the readers won, Baldacci’s “First Family” for $9.99. But look how they are making up for it in other ways.

OK, I’m just not buying that it should cost the same amount for an e-book as it does for a hardcover book.

David Baldacci, the best-selling thriller author, learned what some of his fans think when “First Family,” his latest novel, went on sale last month. Amazon initially charged a little over $15 for a version for its Kindle reading device, and readers revolted.
[…]
Publishers are caught between authors who want to be paid high advances and consumers who believe they should pay less for a digital edition, largely because the publishers save on printing and shipping costs. But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.

It turns out that Amazon has been underwriting the cost of the hardcovers, charging $9.99 but paying the publishers more so that it can sell more Kindles:

For the moment, say some publishers, Amazon is effectively subsidizing the $9.99 price tag for new book titles in digital form by paying publishers the same $13 it pays them for a new hardcover title with a list price of $26. It’s a classic “loss leader” situation. Although Amazon won’t comment on the arrangement, the online bookseller is using low-price e-books as a lure to persuade consumers to pay $359 to buy a Kindle, or $489 for the new, larger Kindle DX.

Then it didn’t make sense for them to release the free IPhone/iTouch app because there is no incentive for me to buy a Kindle when I can read books on my iTouch. The savings in books would not justify spending $359 on a Kindle. If I want to save money on books, I can go to the public library.
I think the prices they are charging on the mass produced books should help offset the loss in revenue from the hardcover books.

I’m buying more books from Amazon because I can get a hardcover for a lot less than in the stores. I never buy hardcover books so they are at least getting my 10 bucks when they were getting nothing before (I would have just gone to the public library to check it out). In the long run they are probably selling more books this way.
BTW, the readers won, Baldacci’s “First Family” for $9.99. But look how they are making up for it in other ways.