Saying that a book will 'eventually' earn out doesn't help you meet payroll *today*. To survive as a company, you need to cover X fast enough that you can continue to meet your own day-to-day operating expenses, not to mention have enough left over to finance X for the next book.

Also, your model assumes a level of demand that I'm not willing to accept – that a) there's enough demand for all books that they will all eventually earn out; and b) that you can increase the demand more or less without limit by lowering the price to 'impluse' levels. This doesn't agree with my anecdotal observations. There's a certain market for any book on its initial release, but it's limited based on topic, genre, and how many readers have heard of it; past a given point, you're not going to increase initial demand any further by lowering the price. Once the initial surge is past, sales settle down to a much lower level as new readers discover it. My feeling is to address the cash flow issues I'm talking about, X is going to need to be covered in the initial surge, or a reasonably short period after that; day-to-day expenses aren't going to wait two years for a book to earn out.

I do not for a second believe that the cost of an ebook should be anywhere near $15. That is pure greed and nothing else. Once produced, that ebook can be sold 1 time or a trillion times. There is no inventory to maintain, no physically transporting merchandise, no excess stock, damaged merchandise etc. If they can make money on paperbacks at $6-$8, then that is all an ebook should cost. Likewise, I'd still rather go to the library so i don't have to deal with storing it.

IF they priced ebooks appropriately, I might buy some, rather than go to the library. Perhaps their profits might go up further. For a song and a dance, I'd buy an ebook. I don't want to buy pbooks at any price. Well I suppose my taxes buy them for the library.