I bought my first ebook reader, an Amazon Kindle, last Christmas after enjoying using the Kindle software on my iPad and grabbing the odd shorter session on my mobile phone. Not only did I love how the Kindle software keeps the pages synchronised between the devices you read on, so you can always pick up where you left off, I also loved how competitively priced the books were. After the initial outlay on the device, I could be anywhere and instantly purchase the book of my choice at a significant discount over its printed cousin.

Anyone looking to buy an Amazon Kindle, or one of its competitors like the Sony Reader range, may scan the top hundred on the Kindle Store and conclude that, yes indeed, ebooks make for some pretty affordable reading. Popular titles like 'The Girl with the Dragon Tattoo' (and the rest of the Stieg Larsson trilogy) are much cheaper than RRP and in fact, at the time of writing, there is nothing in the top ten over £3!

However, delve a little deeper and you'll find recent changes to the way Publishers deal with the likes of Amazon have driven prices of books right up. The ones you'll see in the Kindle Top 10 are often there simply because they are cheap and then others are loss leaders to draw you in. But others, big titles that used to cost less have gone up significantly. For example, Stephen Fry's second autobiography, The Fry Chronicals, released late last year used to cost around £6.99 in Ebook form, but it is now £12.99, over £2 more than the hardback edition! His first biography, 'Moab is my Washpot' has been consistantly higher in the charts than the new one and its price of £2.84 must explain that in part. It's not hard to find other similar examples. Tony Blair's book, 'A Journey' went up in price dramatically at the same time. It now retails for £10.79, which is admittedly a bit cheaper than the hardback version, but it's out in paperback now and that's £3 cheaper.

So what happened? Well, there were many who were inclined to blame Amazon. "Get us hooked on the Kindle and the Kindle Store and then when there are enough of us, push the prices up!" - was the accusation. Well, actually it had nothing to do with Amazon, and the reason for the change was the publishers. Angered at what they saw as a cheapening of their product and an unacceptable erosion of their profits they decided to switch to selling their products to retailers (like Amazon, WaterStones and so on) via agency middlemen. As all the publishers sold through the same agencies, this put the selling power back in their hands and they were able to set the price. It's all the result of a very public spat in the states where Amazon were setting all major new hardback releases at $9.99. Now Amazon is essentially only processing payments for the publisher, it can no longer set the price. If you'd like to read a bit more about the 'Agency Model' and what it means, there is a very useful FAQ on 'I Love My Kindle' - just click here to read.

So can the publishers really justify this often significant price rise and can the ebook market really sustain prices above their printed relations?

Well, the public's initial reaction was of anger and disgust at the perceived greed of these 'faceless' corporations trying to grab more money than they were due. The protests took the form of angry readers flocking to the Amazon Kindle website to write one star reviews on the books that had gone up in price. For a time, Stephen Fry's book, which was a big seller and very well received by critics and public alike, only had a few stars on its Amazon page! Review after review marking it down following the price hike.

Personally, although I'm not sure I'd have wanted to bring the authors into it like that (very few of them make significant money, the rest live on very modest means to write these books), I can see Joe Public's point. After all, an ebook has no physical presense and is available in infinite supply. There are no printing or (significant) distribution costs. No overheads bar some computers to host the copies on and once an ebook is finished with, it's not like it can be (easily) lent to others, sold on or passed to a charity shop. It certainly does look like only greed has set these prices, not logic. The fact that sparked anger in me most was, if you read the small print, you never really own the text that you're buying. You have essentially purchased a license to read the text.

In writing this, I'm almost tempted to return back to the safety of physical books! (perhaps that's what the publishers want!)

But surely there has to be more to it than an arbitary raise in prices just because the CEO of some snooty publishing firm needs a new Bentley!?

Well, actually there is another side. First and foremost, in the UK at least, ebooks are subject to VAT (a tax currently set at 20%) while physical books are not. Okay, this was there before the price rises and it wouldn't make any difference to the publisher, that money goes to Central Government, but there really is no good reason for ebooks to be subject when printed are not. If ebooks were made VAT exempt, then that 20% discount might leave prices a bit closer to a place where reader and publisher alike could be happy.

So although VAT could ease the situation, it wasn't the cause or motivation for the publishers. So what was? Well, the fact is that printing and distribution form only a fraction of the price of producing a book. Obviously the book needs to be written. A year of the authors time maybe, often much longer. Once the book is written, it goes to the Editors and may undergo several edits before the writing gets to the kind of polish many readers can take for granted. This often involves teams of very highly skilled people working for months at a time. After that you have all the marketing, publicity and other business processes that go with releasing any product into the big wide world. The print and distribution may only be as little as 10% of the total cost.

So at the moment the ebook world is stuck in a bit of a dichotomy. On the one hand we have publishers spending very similar money investing in ebooks as they do their traditional printed word, but selling to a customer on the other hand, who has already spent a chunk of money on the reading device and therefore expects to see a saving on the actual words that appear on it, not least because they can't resell it or lend it afterwards.

It's going to take some time for this to all balance out. The music industry really didn't like it when MP3 players came along and tried to push them to the sidelines. The result was a massive shift towards online music piracy and a whole generation of consumers who think music should be free. Only now are bands starting to properly innovate and make money from touring and merchandise, rather than simply relying on CD sales. In the most part, the music artist may no longer expect to make silly sums of money for their work, but they stand to make a living. Making a living from something you love should be enough for most of them to keep doing what they do. The typical author however, well they don't make that much now and if the consumer's reaction to these prices is to switch to free pirated copies, then it is not only the faceless publishers that will suffer, the poor author will probably be reduced to a hobbiest and then we've all lost. Piracy of popular books is very easy. I could download everything Stephen King, a talented and prolific writer, ever wrote in under 10 minutes for nothing. Anyone who knows how to search the internet can do the same and may face the temptation if prices don't change.

As an annoyed reader myself, I often take note that Amazon mark out books where they havent' set the prices. The book's page will state "This price was set by the publisher". If I don't like the price, I'll avoid. If I really want the book, well, I'll consider the print version or I'll put it on the wishlist and hunt for a better bargain. I won't pirate, but I will hope the publishers come to their senses, or a lot of people will.

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