I used to be very skeptical about commercial viability e-books, despite the 100% and more sales gains of recent years, mainly because of the e-book 2000 conference I attended in D.C. six years back. The attendees couldn't see the forest for the trees, everybody was obsessing about their hardware reader or their DRM (Digital Rights Management) system, but nobody was talking about the crazy aunt in the attic, namely, how to get people to buy the things. The obvious answer was "online" and the obvious place was online bookstores, yet Barnes&Noble.com closed down their e-book operation over a year ago, despite having invested heavily in the e-book content side by purchasing MightyWords (with all the money they raised from suckers like me in their IPO).
Publishing discussion lists were full of anecdotal stories of e-book success, but on digging a little deeper, it appeared that low priced erotic e-books were the main winners. There's also been a lot of e-book pontificating by people who did one shot cash-ins, with e-books put together from all the old junk on their hard drives. The secret? If you've been running a e-mail newsletter for years or a large discussion list with many thousands (even tens of thousands) of members, you can get away with blasting them all to buy an e-book, and a good portion will do so out of loyalty. That's not a business model.
However, my opinion began to change last year when I finally told Lightning Source, who prints and distributes my paper books, to go ahead and distribute them as e-books as well. According to Amazon's customer service, Lightning Source actually serves up all of the e-books sold by Amazon (I'm not sure this includes the edocs Amazon sells with no DRM), and Lightning Source has been running free e-book setup promotions for as long as I can remember. The result has been an average of a little over $500/month added to the bottom line of my publishing company.
Just recently, I noticed the proportion of e-book sales rising, with no change in my marketing, and then I finally noticed the new look on Amazon ordering pages for paper books with e-book editions. Under the title information is a nice little blue-bordered box with "Other Editions."
If the paper book has multiple paper editions, they show up, but more importantly for e-book publishers, the e-book version (digital) is now front-and-center, with its price. Most of my e-books are sold for the same as the paper book, but in the case of my Print-on-Demand Book Publishing, I priced the e-book 33% off, since I figured most people getting into print on demand would prefer the paper copy to see the quality.
I've written up some of the reasons people buy e-books, but the thing that pushed me over the edge to try selling e-books on Amazon was customers from overseas writing me and saying they'd rather buy an e-book, get it immediately and print it, than wait for weeks to get an expensive overseas shipment. I know some professionals also buy e-books that they keep on the laptop, just to have them available at all times, but I suspect it comes down to an economic choice for most people - eliminating shipping costs and possibly getting a discount.