Fast forward several years and each of the major bookstore chains offered their own ebook reader (Nook, Kobo) and tablets started offering ebook experiences--either through Amazon/Barnes and Noble/Kobo apps or the tablet creator's own ebook reader (iBooks). The market explodes in terms of the number of devices people now read on, and publishers start treating ebooks as an accepted way of offering content--with that comes the high costs in terms of marketing, promotion, post-production costs (do they do anything special for ebooks), that kind of thing.
In other words, Amazon had a niche market that few people competed in. Hence, price ended up being artificially low (same as the online music market in the 90s). Once people realized they could turn it into another distribution channel, competitors exploded and the price of the good adjusted to a more normalized market value.
In economics, a monopoly can go one of two ways. It can either push prices to an extreme high in order to maximize profit, or it can push prices to a low in order to lock competitors out of the market and incentive the purchase of other goods (Kindles in Amazon's case). Once the monopoly broke, the price of the good normalized--which for us means it increased.
Amazon then was forced to raise there prices if they wanted to get the same books that Apple got. So yes as the market has grown and there are more choices the prices have gone up. The publishing industry conspired with each other to get hire prices.
The price fixing talk did not start with Amazon. It started because when Apple joined the market the publishers where not going to give them the same deal that Amazon had forced on them. So I think Apple wanting to get a piece of the market worked with the publishers and they all set the same pricing. Now it happened so quickly that people think they fixed the price which I agree they did. Instead of each one working with apple to come up with there own pricing.
This whole price fixing thing came about when Amazon had 95% of the market share and was able to dictate the prices, since they where the only ones selling e-books in large amounts. Now that apple is in the market along with other people Amazon share is at about 55% so they have lost that ability to control the market.
I do think Apple and the book companies came together to set a hire price and force Amazon to follow suit or risk not having all the books that Apple would have.
I do not understand why the books have to cost that much. I agree with NathanKP in that they are just files and the cost to the publisher is almost nothing at all. I know they are wanting to make a profit but I think when you charge more then a paper book something is wrong.
Go all e-books with a lot less paper books and call yourself the greenest in the business. I find that a lot of companies are scared of change and I am not sure why. I see change as a great thing that can propel the world in to new and better technology.