Books are electronic files before they are ever printed on paper. Publishers can just reformat the files and voila, e-book. It seems so simple, but unfortunately it is not. Each type of e-reader has a different proprietary format to which files are required to conform. It is as if each bookstore chain had different requirements before they would put the books on their shelves.
Say for example that Barnes & Noble required that all books be printed on 10 lb paper, but that the book be no more than an inch thick so that they fit on the shelves. So the layout designer drops the font size and makes the book paperback in order to meet requirements. Amazon says that books can be as thick as you want, but they must be less than 9 inches tall and the font can be no smaller than 12 points. This requires layout re-adjustment although it is theoretically possible that one layout would match both. Then the independent sellers declare that they will only carry hardback books printed on high quality paper with blue ink. The layout designers work must be done again.
Each of the e-book formats must be learned and adjusted for. In theory you could pay to have an automated system to take a file and transform it into all of the formats. Automated systems save piles of time and effort, except when they do the opposite. The simple find-and-replace feature in a word processing program can easily change the name Ben to the name Lyle throughout a document. It will also change the word benefit into lylefit. A human has to scan through for errors and fix them by hand. Add in time and effort spent on the times when automated programs fail to work catastrophically for reasons unknown. If the book in question has any graphic elements, increase by 10x the level of difficulty in getting a readable result.
In order to put out a book into 5 different e-readable formats, a human must be employed to check the e-book five different times across five platforms. That human then has to tweak and correct introduced errors before the book is sold. An employed human must be paid. Until an e-book is sold in sufficient quantities to spread out the preparation cost across millions of copies, that e-book will have a price point similar to the cost of a paper book.
The printing, binding, shipping, and warehousing of paper are really the smallest part of the cost of a book.
Edited to add: I’ve had enough reasoned counter arguments posted to convince me that I am not an expert in the field of e-books. I’m going to let this post stand because it was what I thought when I wrote it.
That makes sense, though it does make me wonder about how Baen manages it. They produce 7 formats and their books generally run about 2/3rds of the paperback price or less. I guess that in general their smaller e-book formats like MobiPocket mostly leave out the graphics though. Several of their formats actually support multiple devices.
That doesn’t explain why game companies like Sony with their PSN often charge more than or the same for their digital copy than their physical copy though. I think that can be explained by them not wanting to annoy their brick/mortar resellers by undercutting them…