Why are some e-book prices higher than hardcover ones?

1.  The Telegraph (UK) - on both UK and U.S. pricing situations
The Telegraph's Shane Richmond asks "What's a fair price for an e-book?"

There's been an uproar over Ken Follett’s Fall of Giants (UK page) and Don’t Blink (UK page) by James Patterson and Howard Roughan, as both are more expensive to buy from Amazon and elsewhere as e-books than in hardcover.

Some blame the author, others the publisher, and Amazon often gets the blame despite its rather public opposition to publishers raising e-book prices, a fight it lost with the Big5, whose new non-competitive pricing policies became a reality with the help of Apple's Agency model (details in this blog's earlier articles linked at the bottom).

Even the Telegraph mentions that Amazon has been in "plenty of rows with publishers recently over its efforts to drive prices down."

In checking Waterstone's in the UK, Richmond found that Lee Child’s Worth Dying For is £8.99 in hardback but £13.58 as an e-book. The same is true of The Fry Chronicles by Stephen Fry, A Journey by Tony Blair and the aforementioned Ken Follett, to name a few.

While e-books carry "Value-Added Tax" in the UK whereas the hardback ones don't, Amazon in the UK (unlike in the U.S.) is free of Big5-publisher and Apple Agency demands and therefore

' Amazon sells the e-books of all of those titles for less than the hardback versions – and both formats are cheaper with Amazon than with Waterstones.  The Lee Child book, for example, is £7.59 from Amazon in hardback and the e-book is £6.64 – less than half the Waterstones price. '

Richmond continues, in connection with the U.S. situation:

' Publishers aren’t keen on having their prices driven down... in this case publishers have used the more favourable terms offered to them by Apple, which wants to establish its iBookstore as a competitor to Amazon, as a lever to force Amazon to re-negotiate.

All publishers can do is slow things down, though.   Customers believe instinctively that e-books should be cheaper than the paper equivalent.  There are no printing costs, packing costs, shipping costs or overheads on shelving.   Whatever the publishers might believe, it won’t be them that decides pricing but the market. '

2.  Laptop Magazine - U.S. pricing situation
Laptop Magazine's Anna Attkisson did their own check in the U.S. where the Big5 and Apple have ensured same-pricing at all online stores for their e-books -- though some stores must 'catch up' with the others -- and here are their findings:

. Fall of Giants by Ken Follet
    $19.99 Kindle (Dutton, an imprint of Penguin Group, a Big5 member)
    $19.39 Hardcover at Amazon
    -------
    $19.99 Nook
    $21.06 Hardcover at B&N
    -------
    $19.99 Kobo
    $19.39 Hardcover at Borders

. Don’t Blink by James Patterson and Howard Roughan (Little, Brown & Company)
    $14.99 Kindle (set by publisher Hachette, one of Big5)
    $14.00 Hardcover (set by Amazon as not part of Agency agreement)
    -------
    $14.99 Nook
    $16.37 Hardcover at B&N
    -------
    $14.99 Kobo
    $13.99 Borders

Background
If you're interested in the background of the e-book pricing wars, the earlier stories posted here include:

  . WashPost: State AG probes Apple, Amazon over e-Book prices. What?
  . Amazon removes Macmillan books
  . Amazon surrenders to Macmillan and Steve Jobs
  . Steve Jobs pulls his puppet strings but says too much
  . Amazon plays hardball to keep lower pricing option

Publishers may be seeing lower revenue with the agency plan
Chris Meadows at Teleread.Com reports Publishers complain that agency pricing leads to lower revenue - (Sept 29, 2010).


Kindle 3's   (UK: Kindle 3's),   DX Graphite

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Check often: Temporarily-free late-listed non-classics or recently published ones
  Guide to finding Free Kindle books and Sources.  Top 100 free bestsellers.
    Also, UK customers should see the UK store's Top 100 free bestsellers.