Why do e-books cost so much?

But meanwhile, on the other side of the e-book price divide are consumers. Whatever the cost of paper, $10-plus e-books look mighty expensive when they’re undercut by 99-cent Kindle best sellers sold by authors who don’t have a publisher’s overhead.

Publishers have a massive problem with perception of value. When you can’t hold it in your hands and easily pass it along to a friend, $10-plus just feels too expensive to many people.

And because publishers have been selling print books via the wholesale model and e-books via the agency model, this results in the confusing situation of e-books sometimes costing more than their print counterparts. With print, Amazon and other booksellers are allowed to charge whatever they want. With e-books, the publishers set the price and e-booksellers aren’t allowed to discount. So Amazon, for instance, might discount the print books under the e-book price and publishers have little control over that.

Whether publishers want it or not, change may be on the horizon. Three of the publishers named in the Justice Department suit have already settled and have agreed to variable pricing. Lower prices seem inevitable.