99 Cent Books
I am having trouble convincing myself why digital books will not cost 99 cents within 5 years. All books, on average. Just as the price of music does not in general change on the length or quality.

Here’s a reason why they’ll be as inexpensive as music. The other day Joe Konrath, a genre writer, and avid self-publisher of ebooks, said:
Eighteen days ago, I dropped the price of my ebook, The List, from $2.99 to 99 cents on Amazon. I was selling 40 copies a day prior to that.
Currently, The List is #37 in the Top 100 Bestsellers on the Kindle. It’s selling 620 copies a day on Amazon.
Do the math:
2.99 x 40 = 119.60
.99 x 620 = 613.80
I don’t think publishers are ready for how low book prices will go. It seems insane, dangerous, life threatening, but inevitable.
I predict we’ll be there in 5 years, (before the marginal price drops to zero, but that is another story.)
UPDATE: My math is horrible; I originally had the decimal point wrong. Now fixed.
UPDATE 2: Several readers asked what the figures would be if we factored in Amazon’s cut. Readers MCM and EsmeraldaGreene offered calculations. It is a significant reduction of the difference.
Amazon pays out 35% for ebooks priced below $1.99, and 70% for ebooks that are $1.99 and up.
So the math is:
2.99 x 40 = 119.60; x .70 = $83.72
.99 x 620 = 613.80; x .35 = $214.83
Also, as others have noted, $1 is near to the royalty payment that an author will receive on, say, a paperback trade book. So in terms of sales, whether an author sells 1,000 copies themselves directly, or via a traditional publishing house, they will make the same amount of money.
I am not saying this is good news for authors. 99 cents is not. It is good news for READERS.
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