<i>MacMillan doesn't "need" $12 to $15 to make money</i><p>Actually, you'd be surprised.<p>The author's cut is a royalty based on the suggested retail price, which for a hardback offering would be 10-15% of $24, or for a first ebook at $15 would be 25-30% of $15.<p>The production cost of an ebook is non-zero; there's a lot of editing, copy-editing, proofreading, typesetting that goes into it, not to mention commissioning cover art (arguably obsolescent) and other marketing activities. Rule of thumb is $7000-$20,000 for a book, which must be recouped somehow. Typical book sales are <i>much</i> lower than most folks imagine -- midlist hardcover SF novels sell 3000-8000 copies at $24 discounted to $16, paperbacks sell 15-30,000 copies at $8 discounted to $6 (but with a hideous level of wastage such that typically 20-50% of the print run will be pulped due to not selling within 90 days).<p>Suppose the $15 ebook somehow sells as many copies as the $16 (after discont) hardcover. The iBook cut is 30%, leaving $10. The author's cut is another 30% of $15, leaving $5 for the publisher. They then have to defray $7-20K of production costs before they're into profit; an expensively produced book that sells for $15 but only moves 4K copies is thus a <i>loss</i>.<p>You want to know the grisly truth? Right now, ebook sales are lucky to make it into three digits. Even Baen, who are Doing It Right, are happy to shift 4000 ebooks at $6 each.<p>And Amazon isn't taking only 30% of the cover price: they're wanting 30% <i>with a cap of $10, and they get to set the retail price</i>, or <i>70% of retail price</i> (current books).<p>Let me say it again: in publishing, about 70% of the revenue stream is soaked up by rent-seeking intermediaries between author/publisher and reader.