To get the price of ebook readers so that they will fly off the shelves of shops and supermarkets, a cellphone or games console-like subsidy model might help. The subsidy approach is something that Irex Technologies will concentrate on - albeit not for the mass market. Irex is aiming at specialist publishers who sell subscriptions worth hundreds or thousands of dollars a year to drive initial sales. Patent services, scientific publishers and financial specialists would seem to be good candidates. Maybe technical manuals for maintenance staff will make more sense on such an ebook than on paper or a laptop.
However, it will not take long for a company such as Irex to run out of potential customers. A long-term viable market means breaking away from any form of subsidy model. For the mass market, such a model will rely on digital rights management (DRM) and it's hard to see any DRM working for the printed word where there is so much resistance to it already in audio and video. If you can see it or hear it, you can rip it despite the intense efforts of content suppliers to make hardware makers slap intrusive electronic controls on their devices.
If you cannot make people pay money every time they switch the thing on - and that's what you need to support mass-market subsidies, then the subsidy model is a non-starter. I suspect that, even if the DRM worked as its creators hoped and proved tough to crack, people would still prefer to buy non-subsidised readers as this would give them so many more reading choices. After all, who buys a DVD player that cannot be set to play DVDs from any region when given the choice?
In this scenario, copying material is trivially easy and something that will happen day in, day out. New authors will positively encourage it, embracing the Cory Doctorow doctrine that obscurity is worse than royalty protection. Mainstream publishers will argue they have the cream of the authors, but they will find it hard to justify paper-novel pricing for their biggest moneyspinners: the bonkbusting bestsellers. The ones with the gold lettering piled high at airport bookshops. These are not books people want to keep: they read them on holiday or just on the way to a holiday, then toss them because they are too heavy to bring back. One ebook means a whole pile of over-thick pulp. Disposability will equal cheap in the minds of most consumers with margins set to plummet as a result - books are not that expensive to print. The cost to publishers largely lies in the risk of commissioning, editing and then printing up a big pile of turkeys that don't even fly out of $1.99 bargain bins.
Vanity is the thing that the publishers will end up focusing on, unless they can find a way to profitably nurture popular bestsellers and get decent money without the authors just doing it for themselves. Not vanity publishing: that will have been killed off almost by the ebook revolution. This is vanity in terms of the books that people like to be seen to have read. Even if they haven't. Devotees of Irish satirist Flann O'Brien will recall the service offered to the nervous socialite of writing insightful margin notes into thick, leather-bound volumes. The books that people will continue to buy, and pay big money will be those not just for reading - if at all - but those to be displayed on a shelf. I'm not sure how you get to collect first editions of new writers in this scenario but I'm sure someone will think of a way: maybe that will be the new vanity publishing: "This one's got great reviews. Quick! Get a couple of hundred knocked up down the printers and make sure they get signed."