At South by Southwest, I attended "Publishing Models Transforming the Book", a panel moderated by Rachel Deahl of Publishers Weekly. The panel was made up of executives from Wowio, the Atavist, Penguin and Creative Conduit.
The price of eBooks was discussed briefly, with Molly Barton of Penguin offering the generally accepted claim that "paper, printing, binding and distribution represents only 10% of the cost of a physical book". The implication: eBooks should be priced in line with physical books.
With three digital-first publishers on the panel, I was surprised that no one brought up the fundamental difference between physical and digital books: digital books have less value. You can't really lend them or give them away. You can't move them from one platform to another. You don't really even own them.
I was also surprised that no one countered that lower prices could generate significantly higher total revenue for at least some books. There's little established data for what eBooks "should" cost, and those who have tried testing a range of prices have reported finding some revenue-maximization sweet spots.
Instead, most of the discussion centered on whether lower price points and free offers devalued content. I think that's another missed opportunity.
I've made this argument before, so I thought I'd try framing it a different way: what if publishers considered DRM a term? I mean this sincerely: if a retailer approached a publisher asking for exclusive rights to a book, most publishers (and many other retailers) would balk. Those who went along would seek more favorable terms.
It's as simple as this: DRM restricts markets. If you don't like exclusive deals, why would you favor DRM?