The E-book 
Opportunity

May says the key near-term question publishers need to consider is what they hope to accomplish with the agency model: "Is it about control or is it about maximizing the price they get for a book?" If the latter, he says, publishers are already able to set wholesale prices, and no research has been done to prove that $9.99 is the upper limit of what consumers will pay for an e-book.

"The question of cannibalization is a tough one," May notes. "Yes, they can delay, and windowing is probably their best opportunity while they still have people looking for print, but if you put out a bestseller in the summer and [a] digital [version] in the fall ... you may have missed that opportunity."

According to Springer's Colon, "Setting book prices is one of the most difficult aspects to selling a book, online or print. The way STM books—and most products, for that matter—are priced is by using comparable products, as well as other factors such as print run, market size and brand perception. An important role, especially in science, is also the high-quality content."

Springer prices e-books based on the physical version, if one exists. Colon notes that with the growth of print-on-demand and print-to-order distribution, the publisher has been able to greatly reduce the price of its physical books, pointing to a possible future where highly efficient digital printing and distribution models will make current pricing concerns (based on consumer expectations of lower book prices in a market dominated by high-overhead physical distribution) irrelevant.

Looking Ahead

Richard Stephenson, chairman and CEO of tablet software provider Yudu, sees a coming together of e-book and tablet functionality, and therefore markets, as the limitations of e-ink displays, such as refresh time and color, are overcome. A single, common standard for content is important, he says, though he believes there is much work to be done in improving the current ePub standards if reader devices are going to meet the sophisticated graphics needs of both book and magazine publishers. "On a scale of one to 10, ePub is currently at sophistication level three, and what is needed is a level-eight standard," he says.