I am using a free Kindle app for my iTouch. A colleague told me that I could download the app, register my iTouch with Amazon and then could get books downloaded directly to the iTouch. The first book was one recommended by a professional group and written by Henry Jenkins who has been involved in emerging media. It was free. The app was free.
Since then I have downloaded more books for reading to my iTouch. Most were free. I have paid for one or two ( from .25 to 1.99). Amazon is subsidizing the e-books so that more people will buy the Kindle. Maybe it will work. Is this how the book business may end up, much like the music business. I download singles for .99 and yes, it is immediate gratification. It makes sense to me.
Now according to the New York Times article (link is below) e-books need to be priced somewhere in the $15-20 range. The various reasons are listed in the article. The difference can be the amount that the author gets in advances and royalties.
I have not published fiction, but I have some experience with academic book publishing. Authors get nothing upfront and are lucky to get a percentage of the sales. Yet, they must submit all text, graphics, charts, etc., electronically. They must proof the e-version that the publisher sends back and must provide the index, sources, bio’s, intro’s, …. But academic authors do not publish for money (directly, that is), but more for recognition, promotion and for the joy see your work in print.
New York Times article on the price and costs of ebooks: http://www.nytimes.com/2009/05/17/weekinreview/17rich.html