In an environment with an ever-increasing digital component, judging success by how many you sold is doomed to fail. You have to judge success by how much revenue you took in. Why? Because after you’ve paid all the costs to get to the point of having an ebook to sell, everything after that is essentially free. Yes, there’s a small fee for digital distribution, and authors have a percentage royalty they’ve earned. But as that’s a percentage royalty, and not a per-unit royalty, it scales. The publisher’s job at that point should be to maximize revenue. In a way, this is the same for print, but as you actually have to plan how many copies you’re printing and pay for them in advance, there’s much more upfront investment risk involved every time you print more copies.
Digital has no production cost once you’ve reached the point of having something to sell.
Read that last sentence again. Once you understand that and its implications on pricing flexibility, you’re already ahead of big-6 publishing.
It might seem as if he’s advocating what the Big 6 of print are currently doing — overpricing eBooks via the Agency Trust — but that’s not so.
This is an interesting post that comes to a surprising conclusion and needs to be read.
Mike Cane’s xBlog 
Thanks, Mike. Very interesting, and I have blogged this from a writer’s viewpoint.