So if my current hardcover sells for $24.99, then as an ebook version, it should cost $21.86.
But it doesn't. It costs $9.99.
So how does that work?
The article also says, "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."
But if the Kindle establishes itself as the dominant player in the ebook market, how long will Amazon be willing to pay publishers less? And if they pay do pay publishers less, you know that the publisher is giong to turn around and ask the authors to take less.
Lots more food for thought here.