Well, I guess their monopoly didn’t exactly work since Barnes and Noble with their Nook among others also charge the same low ebook prices and do well.
They figured out that if you sell at a lower and reasonable price you make up the difference in sales volume, something I learned in econ 101. This is why many hardbound best sellers are only on the shelves at full price for a short time before they are deeply discounted and yet they still make money on them. With ebooks, their production costs are a small part of the cost of hardcover books. Apple and the publishers are making a bid to up their cut of the pie while incurring few additional costs.
How much does it cost to have a book printed in large quantities? Let’s say I think I have the new great novel (or just 500 pages of my FR ranting) and I decide to publish it myself. How much would it cost to have 10,000 (or 100,000) 500 page hardcover books printed? How about paperbacks? I’ll deliver the print ready files in whatever format needed and I’ll bring the trucks to the loading docks. I’ll even wait until it fits into a normal printing schedule so it’s not a rush job. I just want to know how much the raw printed copies cost in mass production (not print on demand) quantities.
Except that everything I've read says that Amazon was losing money on their ebook sales. It was a loss leader for them. So if they were pressuring publishing companies to sell them books at a loss, and then selling those books at a loss, they were a deflationary pressure.
I agree it seems goofy that ebooks should cost more than paperbacks. On the other hand I'm starting to really appreciate not having to find more shelf space!
Everything I've read from people involved in publishing makes me think Amazon wants to replace the big publishers. Is that bad? Maybe, maybe not, but as both a reader and an aspiring writer, I want lots of publishing houses.