Former literary agent Nathan Bransford, on the costs of publishing:
For a new best-selling hardcover, all of the costs associated with print, from the printing to the shipping to the distribution to the warehousing to returns, amount to a mere few dollars per copy, depending on the size of the print run.
The vast majority of a publisher’s costs come from expenses that still exist in an e-book world: Author advances, design, marketing, publicity, office space, and staff.
You can therefore imagine the fear that e-book prices instill in publishing executives’ hearts. They’re only saving a few dollars per copy in the switch to the e-book world, but the prices of books were slashed more than half: from $24.99 to $9.99 and even lower.
I admit that this was news to me. I’d love to see lower prices on ebooks, but it does make me stop and think about what this literary price war might cost us in the long run.