Transitioning to Digital?

This recent article from Slate, by Jack Shafer, highlights some of the growing tension occurring within the publishing world over how to cope with the growing popularity of e-books. On the one hand, the sales of digital material are increasing, even doubling or tripling, with time. However, when we compare the numbers we see jumps from three books a month to six books a month--hardly pension-securing. But still, with the emerging popularity of the Amazon's Kindle and the promise of an even better e-reader, digital releases are a big issue for Berrett-Koehler.

One of the biggest problems, as highlighted by the article, is pricing:

"Amazon and the others insist on selling most e-books for about $9.99, which pleases the publishers when the e-book retail price is close to that of the paper edition...The publishers dislike the rigidity of the e-book price, however, when the hardcover lists for $27.95 and Amazon sells it at a loss for $9.99."

Publishers are afraid that such a discrepancy in pricing will encourage readers to buy the much cheaper e-book, dramatically cutting into their profits. They're also afraid that by pricing every e-book similarly, Amazon is effectively capping the pricing potential for every new book. Just as no one is willing to pay more than $.99 for a song download, people will become accustomed to paying $9.99 for a book download.

Jack Shafer predicts that as publishers fight to increase the prices of e-books, readers will simply turn to the e-legacy of pirating and bootlegging. Why even pay $9.99 when you can safely steal Grisham's latest title from Napster's nerdy cousin site?