Why does digital media cost so much?

[Deozaan]

Okay, so here's something I don't understand. In the early days, for an author to get a readership, hundreds of thousands (if not millions?) of dollars would need to be spent on equipment and paper and binding and shipping and all that stuff to get books into bookstores. It was a similar situation with video and music.

The "problem" with this distribution method was that the publishers got most of the money while the author/artist got diddly squat. Even though that sucks for the author, it actually made sense, since the publisher was the one who fronted practically all the costs involved in getting the author's works across the world.

But in this day and age of digital media, where publishing costs have been reduced to negligible amounts, why is it that authors still only get a pittance and digital downloads still cost nearly the same (if not the same) as the physical products? Why are eBooks for the Kindle $10? Why are music albums on iTunes $10?

Why isn't there a ubiquitous "self-publishing" platform out there that sells things for really cheap and only takes a small portion for the platform and gives most of the revenue to the artist?

Why doesn't someone create a new Amazon.com-like site that sells digital media for at most $5 (an album or book or video) but more often for $1-$3 with 75%+ of the revenue going to the artist?

There are enough open formats available to make the cost extremely low so that something like this could be profitable. You could use .ogg for audio/video formats. Not sure what you would use for eBooks. But even for distributing you could just use a distributed peer 2 peer network (torrent) to keep server costs to a minimum.

So why hasn't anybody done this yet? Or if they have, why did it fail to catch on? There's really no reason for digital copies to cost so much. I know a lot of music artists and authors have experimented with releasing digital downloads for free or pay-what-you-want or really cheap, but they're all doing it independently. Why isn't there a centralized platform for anybody to do this on?

Why isn't there a digizon.com (digital + amazon) where people just know to go to in order to get their digital media on the cheap?

[app103]

You mean like lulu?

[Deozaan]

No. That's still too expensive. $14 for a digital book? That's more than most Kindle books.

I'd also like this theoretical platform to handle DRM the right way. Lulu seems to have optional DRM (which is good), but the DRM that is there still seems the wrong approach.

A publisher or author of an eBook, not the retailer, determines the level of restrictions applied to an eBook. This includes how many times an eBook can be downloaded for a single purchase, and the number of devices (computers, eBook readers, etc.) to which the eBook can be transferred.

I'm not saying I know what the right approach to DRM would be (is there one?) but this way just seems wrong to me. If someone buys a license to read the content, they shouldn't have an arbitrary limit to the number of times they can download it or else they'll just end up pirating it anyway.

[Paul Keith]

As app showed, there are such sites.

My guess is that it's more of a case of high risk low rewards.

Individual authors marketing their own individual books can get by this but for the most part, a central repository with no publisher (industry) support will have difficulty gathering customers and taking off.

Even sites like Lulu as well known as they are, they're not as exposed as even some A-list blogs.

Then there's the illusion of value. Paper meets price is still worth it just for the simple case of "paper". Plus e-books meets low price at least from my own perspective has less value than pirated books for the simple reason that if you're going cheap, why not go free?

...and then there's two other intangible forces.

1. Easy publishing also means easy marketing of your own books equals you are better served self-marketing your book in the internet via a blog or a social network and repositories have less authority than your own blogs.

2. E-book readers aren't that cheap yet and they aren't as widespread.

These things tend to happen with revolutionary aspects. They kill if not maim the previous technology and it's often a paradigm shift rather than a media upgrade.

[Deozaan]

My guess is that it's more of a case of high risk low rewards.

Individual authors marketing their own individual books can get by this but for the most part, a central repository with no publisher (industry) support will have difficulty gathering customers and taking off.

But that's the point. Lots of "indie" authors are self-publishing digital books on obscure websites/blogs that practically nobody knows about. That's why a central platform is needed, IMO.

Even sites like Lulu as well known as they are, they're not as exposed as even some A-list blogs.

Yeah, I'd never heard of Lulu before. Hulu on the other hand. . .

Plus e-books meets low price at least from my own perspective has less value than pirated books for the simple reason that if you're going cheap, why not go free?

In my opinion, when things get <= $5 range, that's when they become impulse buys. It's extremely easy for me to justify spending what I could find under my couch cushions or in my car's drinking trays, and I consider myself to be a bit of a tightwad, generally. Speaking specifically about books, authors typically only make something like $0.25 per book sold. So if they started selling books for $1 and made $0.75 per book sold, that's a 300% increase in revenue from their books, and potentially a lot more books being sold since the price is 1/15th the cost of the dead-tree edition (assuming $15 paperback price). I think this would also result in more people buying a cheap eBook for their friend instead of loaning the expensive dead-tree one or getting it from the library.

I'm honestly trying to see how this is bad for anybody. The author gets paid more, the distributor gets paid enough to cover costs and make a profit (since digital costs are virtually nil once the product is finalized) and the customer gets their own copy of the book for a great price. Even the platform could keep some of the traditional publishing methods, like giving the author an advance and keeping 100% of the money from sold books until reaching a profit, at which point going to the 75%+ revenue to the author and whatever remaining to the platform company.

The only drawback I can see is there wouldn't be a multimillion dollar advertising campaign for books (or music or videos), but as you said, in this digital age, people can advertise on their own blog (linking to the platform to buy) or on Twitter or Facebook and probably get more ROI than from spending millions on an ad during the superbowl or on TV in general or even in spending some money getting into Google AdSense. And with the centralized platform, more people are likely to find you since there can be recommendations and categorizations and things like that.

2. E-book readers aren't that cheap yet and they aren't as widespread.

You don't need a dedicated eBook device to read eBooks. Netbooks are cheap. Cell phones are cheap. PCs are cheap. Practically everybody has a device capable of reading an eBook. Maybe I'm using bad terminology and eBook refers to a specific format, but what I mean when I say eBook is really just an electronic (i.e. digital) book. If the platform had an application for Windows, Mac, Linux, iPhone, Android, etc. then you've probably got 100% of your customers covered. That's assuming the format of the eMedia (since this isn't just about books, remember) isn't already readable by the devices already.

[Paul Keith]

I'm honestly trying to see how this is bad for anybody. The author gets paid more, the distributor gets paid enough to cover costs and make a profit (since digital costs are virtually nil once the product is finalized) and the customer gets their own copy of the book for a great price. Even the platform could keep some of the traditional publishing methods, like giving the author an advance and keeping 100% of the money from sold books until reaching a profit, at which point going to the 75%+ revenue to the author and whatever remaining to the platform company.

See that's the thing. It's not bad which is why sites like Lulu try but then it's not the logic of the thing that's keeping the whole thing risky. It's the recognition and the assurance if you will that something like this will work following the logical pattern.

With cost for example, you need someone who will sell books for 1$ and make it big. On the other hand, if it does sell big, most people will most likely flock towards the blog maker and not the repository.

Right now people feel like it's too many lightning hitting the same place to work.

Here's where services like Google and Facebook are born. Good ideas that no one seems willing to grab and run away with. Even Amazon fumbled the whole concept with their expertise.

The e-book reader idea is easier to answer.

For someone who regularly buys e-books already, it's almost an impulse to pay for cheap e-books even if you don't have a reader because the technology is already there.

...but that's like saying the Tablet PC has always been there prior to the IPad or the smartphone has existed prior to the Iphone.

The type of critical mass needed to explode an e-book market lies mostly in the acceptance for e-book readers because until then the e-book doesn't feel like a commodity to many people.

I mean it should from the technical sense but it's really not. There's a social aspect needed for it to be accepted.

That's where the revolution or revolutionary acceptance stage comes in. Forums have always existed but people needed mostly Photobucket + Forums to make social networks flourish. Blogs may be cheap or easy but it takes something like Twitter before most people take the plunge.

These seem like "dodging" the issue but only because there are such ideas that bottomline can only trickle to "if you're sure of it, build it and get rich from a good idea you were right about all along"

That said, maybe the satisfactory answer is one where it comes from the version of those who own sites like Lulu.com. In this case, it's more advantageous to get the answer from the horse's mouth on why their e-books cost that way or why an author/publisher/etc. etc. sells it a certain way at a certain price. (Not saying no one here will come to better educate the situation but you seem like you're really passionate about the whole thing and throwing a wider net may get you the more authoritative answers)

Forgot this:

But that's the point. Lots of "indie" authors are self-publishing digital books on obscure websites/blogs that practically nobody knows about. That's why a central platform is needed, IMO.

Well, that's also part of the problem. They are obscure.

You're not really sure of their quality in general. You don't even know if they will flock to your equally obscure service.

It comes down to marketing.

However as the authors become better at marketing, it becomes more profitable and logical to funnel readers back to their blogs for extra ad income and branding.

In order for a central platform to really capture these authors and still guarantee quality of the books they are selling, it's going to take a whole lot of luck, site marketing, customer encouragement, etc. etc.

...but then that means you're competing not only against Lulu but social network sites like GoodReads who have tons of authors and tons of networking opportunities for authors to funnel themselves back to their e-books.

A central repository then needs to be really really good and right now there's no assured model and therefore fewer and lesser known central repositories.

[app103]

No. That's still too expensive. $14 for a digital book? That's more than most Kindle books.

That is 100% under the control of the author. Lulu does not set the prices for digital goods...the creator does. The creator could even decide to make it available for free if they want. And whatever price they do set, they get 80%, and lulu only takes 20%.

2 kind of famous free books available on lulu:

Giving It Away by Bob Young (written by the co-founder of RedHat and founder of lulu)
Matt Basham's CCNA textbook (written by a professor that was sick of the high cost of textbooks and wrote a free one for his students, first edition was uploaded back in 2004)

And there is no DRM in any of the files on lulu, as far as I know (unless it was added recently) It's just normal PDF files, like you would create if you were making a book to sell or give away on your own site.

For their printed books, there is a minimum price because of raw materials, but that price is pretty low. Anything above that is what the author decided to charge.

I think what you are really asking for is a site where most of the authors aren't greedy or don't think their work is worth very much.

[Deozaan]

No. That's still too expensive. $14 for a digital book? That's more than most Kindle books.

That is 100% under the control of the author. Lulu does not set the prices for digital goods...the creator does. The creator could even decide to make it available for free if they want. And whatever price they do set, they get 80%, and lulu only takes 20%.

[. . .]

I think what you are really asking for is a site where most of the authors aren't greedy or don't think their work is worth very much.

Not exactly. I based my opinion of Lulu from this:

[attach=#]

$14 for an eBook (just $1 less than the dead-tree edition) and DRM are clearly mentioned.

[app103]

at $1.49 base price, I believe that isn't the PDF version that an author can make available for free. It could be the one for iphone that gets sold through the lulu itunes shop.

Maybe you should browse through this section, checking out categories of interest, before you make up your mind about the site. Some of them are the kinds of prices you want, while others are mega expensive. (like I said, it's up to the author)

http://www.lulu.com/browse/ebooks/5

[Renegade]

I've bought PDF books from Wrox/Apress, and they were password protected with my email address, which seemed fair. I could print it and use it freely otherwise. Anyways, just one example of a kind of "DRM" that isn't really so nasty.

For the OP - prices are constantly being driven up by advertising companies. Google is the single largest reason for higher digital costs.

[Innuendo]

Why does digital media cost so much?

Greed.

End of thread.

[Paul Keith]

The problem with greed is that often consumers are greedy too in that they want cheap but high quality books that would put less food on the author's plate than if they just asked for donations directly. 

[Renegade]

Problem with donations is that they are very low in general.

[Paul Keith]

A 1$ price with e-books though is even lower.

People don't want to read long texts in blogs already, can you imagine a person thinking...oh 1$ dollar e-book it's just one dollar let's get a bunch of people to buy it.

Not really unless the blog itself was high quality and a high quality blog could already encourage users to donate. In this case as with the above posts, a 1$ dollar e-book requires too much to even consider paying for and it would be a whole lot better to provide a free e-book with a donation link as then someone might find value in what you already provided and not what you plan to provide.

P.S. - To also include Deozaan's reply, this doesn't improve the higher the cost of the e-book. A person is not going to buy a 5$ dollar e-book nor a 20$ e-book unless they themselves were partaking in buying e-books in general. Even for a central repository, you're basically trading "paper" book vs. self-published e-book with no guarantee of quality.

[Renegade]

It could work. I've never put out any ebooks like that, so I don't know how it would work out. My gut tells me that putting a page every 15 pages or so that asked for a small donation would likely increase donations enough to make it worthwhile.

[Paul Keith]

I can't say for the general community but it could even be less than that.

People generally remember a free e-book connected to a blog more than they remember a cheap e-book connected to a central repository.

...but with that said, an e-book is even better if it's connected to a newsletter to me. (Feels more authentic)...than a download link.

Generally speaking it just comes off to me that selling and not just publishing is itself becoming a revolution.

If you're a self-publisher, you no longer want people to pay you after they acquired the item especially with digital items. Now the better marketing schemes are those where the author makes you want to pay prior to acquiring an e-book and so by the time you acquired the book, the donation link is merely a formality in case people acquired your e-book elsewhere but most of the payers are coming from direct "already thinking of paying" customers.

I forgot the term but it goes something like "nowadays it's not about attracting people but keeping their attention on what you're selling." I would think this goes especially for e-books where if you can get people to download a free e-book and donate, you can sell a 1$ e-book and then you can sell a 10$ e-book better than if you have a central repository where you always sell 1$ e-book in the hopes of being found. (although sites like lulu help too but that's where the trade-off of having a donation link comes - if they acquire it on your blog, I think it turns your readers away but if it's spread out over the internet, people are more tolerant and will click on the donate link)

[Paul Keith]

Btw here's a mashable link for those wondering what central repositories there are:

http://mashable.com/2009/03/01/publish-book/

I would say aside from Lulu, CreateSpace is the only one I know of but I don't know how well off they are after the e-book price hike from Kindle books.

[Deozaan]

I think this thread is getting a bit sidetracked from what I intended, and that some of you are missing the point of my inquiry.

The problem with greed is that often consumers are greedy too in that they want cheap but high quality books that would put less food on the author's plate than if they just asked for donations directly. 

I specifically mentioned that this centralized platform would give higher royalties to the creator(s) due to leaving out (or rather, minimalizing) the middleman and all the dead-tree publishing costs. It costs less to produce, so you can still charge customers less while paying the author/artist/band more.

I'm not really interested in a platform where anybody can self-publish, but even if they could, it does not guarantee anybody would want to pay for whatever crap somebody puts on there. It's still a business. In order to make money you'd have to provide something of value people are willing to give up their money for. Crappy music and books will not get bought (much) and excellent books and music will. Survival of the fittest.

you're basically trading "paper" book vs. self-published e-book with no guarantee of quality.

First of all, anybody who thinks that just because a book is published by a big publisher it has a quality guarantee is wrong. It's not hard to find spelling, grammar, or other typesetting errors in books. And that doesn't even go into details of whether the content is high quality, since that's more a matter of opinion. You can also look at other closed systems (like Apple's App/iTune's Store) to see that just because has to pass a "screening test" doesn't mean everybody is going to want it.

I don't know about anyone else, but I don't buy a book or music just because I see an advertisement that makes it look cool. I generally buy books and music due to word of mouth recommendations or from artists/authors I already know and love.

In my entire life I can only think of one music album I got based on an advertisement and guess why? Because during the advertisement they played the music, so I already knew I liked it (or at last what I heard of it).

But maybe now I'm participating in the digression here. My point of this thread is that the technology we have in this digital age is enough to reduce costs of production to negligible amounts. So why are the traditional rates being charged? I understand why it started that way, since that's what it costs to actually produce the goods and make a good profit. But why are authors and artists still selling themselves short to publishing houses or music labels who take most of the money for themselves while charging customers what is now an exorbitant amount (considering cost of production) for digital media?

Authors/artists would make more, customers would pay less, and the middleman (digital platform) would still make a nice skimming off the top for providing the service of connecting media creators with media consumers.

It's a win/win/win for everybody!

Sure, the traditional music labels and publishing houses are probably greedy and don't want to adapt to the new reality (we have seen that with RIAA and MPAA) but I guess what I'm saying is, how come nobody has come up with a better model and the media creators (authors/music artists/etc.) dumped the greedy guys in favor of what would really get them more money and probably more exposure, since more people would probably be buying the cheaper goods.

Am I just asking too soon, and is it just a matter of time? Or is there something else holding everything back? Why aren't the big-name NYT best-selling authors doing something like this? Especially since they already have the fame to successfully migrate to the new system, bringing their fans along with them.

[JavaJones]

Better models/systems exist, but inertia still hasn't caught up, and it's looking like what we might get is simply a new set of media conglomerates who fix prices among themselves in the digital world, just as we had the RIAA, MPAA, and their members (Sony, BMG, Universal, etc.) doing so through to today in the traditional distribution channels. They all still exert significant influence too, but even as they wane new giants like Apple and Amazon are springing up, both massively top-down commercially driven businesses, not "for the masses by the masses" systems. I think even as the mass media delivery and access systems change, perhaps the underlying mentality of top-down, advertising-driven, publisher-focused approaches will take longer to catch up to the technology. Artists are afraid not to make money off their product, and the old systems and large-scale publishers still do a good job of convincing them that they're needed. The new replacements will do the same (Amazon, etc.).

Why doesn't everyone go independent? Few want to be the first ones to jump in, and there's too much fragmentation still for any clear winner. Who wants to sign up to the "self publisher" that ends up going under? So out of fear of choosing the wrong option, many choose none. Also I doubt that whichever "self publisher" succeeds and rises above the rest will really be much different than what we have now; it may even be Amazon or Apple or another current rising superpower that ends up being "the one".

Kind of a depressing outlook I know. There's massive potential in technology, but our relationships to it, and to the content built on/in it, doesn't change at nearly the same rate. We as a culture, society as a whole, doesn't embrace what it enables you to do until long after the fact. Look back at the history of recorded music, TV, even the printing press (you mean monks who hand copy will be out of a job!? GASP!) and much more. It has happened this way time and again, I doubt this time will be much different, though the potential is there for wonderful revolution/evolution.

- Oshyan

[Paul Keith]

I specifically mentioned that this centralized platform would give higher royalties to the creator(s) due to leaving out (or rather, minimalizing) the middleman and all the dead-tree publishing costs. It costs less to produce, so you can still charge customers less while paying the author/artist/band more.

Oh sorry Deozaan. This reply wasn't so much saying you didn't provide an argument as much as replying to Innuendo saying "nope, not end of thread".

First of all, anybody who thinks that just because a book is published by a big publisher it has a quality guarantee is wrong. It's not hard to find spelling, grammar, or other typesetting errors in books. And that doesn't even go into details of whether the content is high quality, since that's more a matter of opinion. You can also look at other closed systems (like Apple's App/iTune's Store) to see that just because has to pass a "screening test" doesn't mean everybody is going to want it.

They may be wrong but that's what the majority feels like.

I'm not so much pointing out that there's a perfect quality guarantee as much as pointing out "it's no different from many people going gaga over Apple's products".

It's an emotional judgement call rather than a logical one.

But maybe now I'm participating in the digression here. My point of this thread is that the technology we have in this digital age is enough to reduce costs of production to negligible amounts. So why are the traditional rates being charged? I understand why it started that way, since that's what it costs to actually produce the goods and make a good profit. But why are authors and artists still selling themselves short to publishing houses or music labels who take most of the money for themselves while charging customers what is now an exorbitant amount (considering cost of production) for digital media?

That's the thing. They're not.

...but really the issue is best answered by those individual authors.

There are actually lots of e-books being sold over the internet.

Am I just asking too soon, and is it just a matter of time?

Yep. That's it in my opinion/

Too soon is relative though.

It's like asking why no one would make a Booster Gold movie or a Shazam movie or a Night Thrasher movie or a Maximum Carnage movie or a Question movie.

You can speed it up by actually making the movie yourself or you can get what you want but still not at the price you want like with lulu.com's e-books.

Or is there something else holding everything back? Why aren't the big-name NYT best-selling authors doing something like this? Especially since they already have the fame to successfully migrate to the new system, bringing their fans along with them.

Actually guys like Neil Gaiman have done such things. From wikipedia:

To celebrate the 7th anniversary of the blog, the novel American Gods was provided free of charge online for a month.

It's all about marketing and timing so as not to devalue their own books.

...but it's again a macro-issue with lots of tentacles holding such concepts like central repositories, cheap e-book reasons, lack of someone taking the opportunity to prove everyone wrong while getting richer...

@JavaJones

Kind of a depressing outlook I know. There's massive potential in technology, but our relationships to it, and to the content built on/in it, doesn't change at nearly the same rate. We as a culture, society as a whole, doesn't embrace what it enables you to do until long after the fact. Look back at the history of recorded music, TV, even the printing press (you mean monks who hand copy will be out of a job!? GASP!) and much more. It has happened this way time and again, I doubt this time will be much different, though the potential is there for wonderful revolution/evolution.

I wouldn't call that a depressing outlook. That's why I don't like words like inertia to describe these things.

It's like saying Apple was just waiting for inertia to release their products.

Part of that is true but part of that is the optimistic outlook of "acceptance".

It's what allows every generation to create their identity and it's what allows companies to seemingly rise over monopolistic-like entities who were not as good at delivering a quality product.

If every large company was always flexible to change, they could potentially maintain a much harder to penetrate through monopoly and with that monopoly comes the convenience to reduce the quality of their products. (although this is not saying Apple is completely grassroots but that slow process is what allows for openings in the market and opportunities for lesser companies to become more well known.)

[JavaJones]

Apple is part of the problem. They're playing ball more and more with old media publishers, especially in the book realm as they had to do more to woo the book publishers given Amazon was already entrenched (this is as opposed to when they entered the online music industry, which basically had no strong legal competitors, so they could basically set the prices and terms themselves). So now Apple is playing the side of the old media publishers and letting them set prices, which in turn is forcing Amazon's hand (Amazon had previously imposed fairly strict limits on ebook pricing). Thus price rises for all players in the industry.

I don't mean to say Apple is *the* problem though. They're really just an example of any big media company looking to maximize profits (and control in the service of those profits). Amazon had a very "new media" mindset, but have been forced to change, perhaps inevitably. Google likewise (see their treatment of news, or Youtube) and who knows where those lawsuits and negotiations will end up. It sure aint easy to change the system...

- Oshyan

[Paul Keith]

Yeah, I was about to disagree with you there until I read the latter half of your post.

In the end it's still optimistic though because the people who are part of the problems are also often those who unseat and change the landscape and that brief hole of change is something to be optimistic about because it gives room for someone who really wants to offer something "an opportunity" rather than constantly having to battle through inertia.

[app103]

I specifically mentioned that this centralized platform would give higher royalties to the creator(s) due to leaving out (or rather, minimalizing) the middleman and all the dead-tree publishing costs.

Lulu does that.

It costs less to produce, so you can still charge customers less while paying the author/artist/band more.

But what if the author/artist/band sets the price higher themselves, as in the case with many books on lulu? What do you think the reason they do that is?

Am I just asking too soon, and is it just a matter of time? Or is there something else holding everything back? Why aren't the big-name NYT best-selling authors doing something like this? Especially since they already have the fame to successfully migrate to the new system, bringing their fans along with them.

One reason why they won't is contractual obligations.
Another reason why they won't is because there are a lot of people that want their books that prefer dead trees and don't want digital. If you publish in digital only,you throw away most of your customer base.
Another reason why they won't is places like Amazon and B&N. Going through one of these self-publishing services makes it more difficult to get your books where most people shop.

One reason why they would is to charge the consumer the same amount and as a result make more than they did before. Why charge less when the consumer has already shown they are willing to pay more?

[JavaJones]

There is also the complex art/science/whatever of pricing and valuing things. There is much evidence to suggest that lowering prices only works to incentivize purchasing and improve perceived value of your product *to a point*, after which it actually starts to make your product look bad and reduce its perceived value. People wonder "Why is it so cheap when it's always been expensive?" and maybe think "It must be poor quality.", etc. In some cases *increasing* the price will actually increase sales. "Rational actors" my ass...

- Oshyan

[steeladept]

Speaking specifically about books, authors typically only make something like $0.25 per book sold. So if they started selling books for $1 and made $0.75 per book sold, that's a 300% increase in revenue from their books, and potentially a lot more books being sold since the price is 1/15th the cost of the dead-tree edition (assuming $15 paperback price).

I think the one thing missed here, and throughout this thread, is how this valuation comes about.  Writers don't publish their books (in general), they rarely market them, and they even more rarely work out sales for them.  In short, writers don't bear the burden of risk like the publishers do, so they don't get the spoils of success like publishers do.  Moreover, most writers are offered that 25 cents per book sold as a lump sum advance plus royalties.  In other words, the publisher is reasonably certain a minimum number are going to sell and they provide that as a lump sum up front.  Then the writer gets ongoing royalties based on the number of copies sold.  Where is the risk in that?  Now I realize this only applies to established writers, but it is those same established writers who's books you are (presumably) looking for, otherwise you would see them on the indie sites and not question this.  Moreover these same indie writers are looking for that big lump sum up front (+ royalties) to indicate they made it big.  It means they can concentrate more on the writing and less on the marketing and it also means they have less worries.  Why would they move to something like you are mentioning even if it does pay more - it is more work as well.

From the publisher's perspective, things get even more harried.  After all, customers are asking for digital version.  This is a good thing because it is cheaper to produce and distribute.  On the down side, marketing is much more fractured so it is more expensive, though this is offset by the fact that all avenues are cheaper due to the impact of the internet - so call that a wash.  Then there is the whole control issue.  Digital media is SO MUCH easier to copy and it becomes cost effective (printing is not nearly so cost effective because the materials cost nearly as much as buying a book).  Then there is the fact that because it is digital, there really is no such thing as economies of scale.  After all, to get more people to buy requires bigger, better, faster servers - there is not really anything that make it cheaper at the 100,000 copies vs. the 99,000 copies.  Often this is where manufacturers make their money - it is actually cheaper to buy it legally then to make a copy.  So now to offset this, you have to consider DRM so a) you don't loose money and b) so content providers will consider using you to publish.  So now you need to be a DRM expert and know what is broken and what isn't, how it is broken, how it is maintained, etc. This comes with it's own costs that - again, really don't have any significant economies of scale.  Moreover, when it is broken (and if it is electronic it WILL be broken), you need to know what your next move is and have the money available to make that move when it becomes necessary.

So in short, the answer why digital media costs so much is the costs went down, but the risks went up so the cost stayed the same.  

A better question is how can you create a business proposition that does transfer the extra risk to you, but does lower the WORK and WORRY on the writer while lowering costs for all involved?  That is what would be needed to be adopted, as once the content is there, the people will come.  As the saying goes, "Content is King".  Now, extrapolate that from books to all content - music, programs, whatever.