E-Book Readers Face Sticker Shock

Cheap new e-readers are expected to be one of the hottest gifts this holiday season. But new owners of Kindles and Nooks may be in for sticker shock on Christmas morning: The price gap between the print and e-versions of some top sellers has now narrowed to within a few dollars—and in some cases, e-books are more expensive than their printed equivalents.

When Amazon introduced its first Kindle e-reader back in November 2007, the $9.99 digital best seller was a key selling point. Today, the price of a Kindle has plummeted to under $100 -- from $399 back then. But e-book prices for some popular titles have soared. The digital price increases are the result of a decision by the six biggest publishers to set their own consumer e-book prices, a move that effectively bars retailers from discounting their e-books without permission. No such agreement exists for printed books—where retailers are free to set their own prices. So while a best-selling e-book price is often less than half of the hardcover price, heavy discounting of the print version closes the gap.