UPDATE - July 13, 2010 - Well, it’s happened already. Sony just broke the $100 e-reader barrier. Looks like there will be e-readers for everyone this holiday season! - R.S.

May 1st was a big day for the e-reader market. That’s when the Kobo, at $149, became the cheapest and most stripped down e-reader you could buy. Soon after, Borders started selling a competitive but cheaper reader, the Aluratek Libre for only $119.99. Now Barnes & Noble has a version of the Nook at $149, and Amazon Kindle promptly slashed its price to $189. Sony, not to be left out of the fun, has also dropped their prices. What’s really going on here? Is it simply competitive pricing, or something more?

Let’s look to the printer and toner pricing structure for a possible answer. Each day, printers are sold with more features, and at lower prices. The catch is the toner: It continues to be ridiculously expensive. I break out in hives when I have to buy toner cartridges for my colour printer. I even purchased a new printer once because it was cheaper than buying the toner! Don’t worry, I found the old one a new home at a recycling charity. Seems e-books are the new toner, and e-readers the new printers.

The first e-readers were expensive ($359 for the first Kindle), and e-books were cheap (typically about $9.99 per book). The publishers didn’t like it, but they had to live within a model where the retailer set the price. When Apple’s iPad launched this spring they forced a change that swept the industry, and now retailers have less discount wiggle room. Not surprisingly, e-books prices have shot up to the $12 range today.

The only lever left to support the rapid rise of digital book sales (and save the publishing industry) is for e-reader prices to continue to drop. Cheaper means much more accessible, and the number of people who own an e-reader will explode. Back to my printer and toner analogy, almost anyone can buy a colour printer these days, but the toner is a whole other story. We need to keep an eye on e-book pricing, and take bets on which e-readers will survive the price wars (the iRex has already filed for bankruptcy protection in the USA), and which ones will go down with last year’s colour printer models.

As Bette Davis/Margo Channing said in the movie, All About Eve, “Fasten your seatbelts. It’s going to be a bumpy night!”

No question, e-reading recently got a whole lot sexier. Apple’s iPad, the latest e-book reader, is sleek and shiny, and has definitely upped the ante. Not only can you read your favourite book (in colour), you can surf the web, play games, keep up with social networks, display photos, and so much more.

It’s estimated there are some 10 million downloadable book titles available and a dizzying array of readers to enjoy them on. On the first day of its launch, Apple’s iBookstore saw 250,000 downloads alone. Before the iPad, Amazon’s Kindle was the sweetheart of the industry with a whopping 90% of the market share. Sales of the iPad show it’s looking for a takeover, and many wonder if it will sink the Kindle altogether and leave all other readers in its dust.

But if the iPad is being used specifically as a reader, word on the street is that the Kindle, or other single-purpose reader, may be a better option. There’s the matter of eInk, the technology that makes the Kindle screen delightfully easy to read in any light. Take an iPad to the beach on a sunny day and good luck reading the screen. Then there’s the battery. The Kindle has enough juice for up to two weeks of reading. The iPad? Ten hours.

If the iPad hype and sales have shown us anything, it’s that e-books are teetering on the edge of becoming mainstream, and consumers want digital content and are willing to shell out for it. From that perspective, the iPad could become the tipping point for the e-book market, and publishers and authors need to focus on the implications and opportunities that will bring.

Amazon has recently announced two changes to its Kindle publishing program that will be of interest to self-published authors.

1] International authors now have access to Kindle publishing.

Up until last week, only US publishers were able to create and sell Kindle versions of their e-books through the Amazon site. Now the Kindle publishing option is available to publishers worldwide. Payment to all international publishers is made by cheque, direct deposit still being available only to those in the United States.

2] Amazon will soon offer publishers royalties of 70% on e-books.

Yesterday Amazon announced a new program that would allow publishers and authors to earn 70% of their e-book’s list price, net of Amazon’s delivery costs. Currently, publishers earn 35% of list on Kindle books. At first blush, the new program seems generous — which it is — but it’s also Amazon’s way of enticing publishers to play by its rules about pricing and availability. To qualify for the new royalty rate, the e-book must meet certain criteria:

• Have a list price between $2.99 and $9.99
• Be priced 20% below the lowest physical book price
• Be made available for sale “in all geographies for which the author or publisher has rights”
• Participate in a bundle of features, including text-to-speech
• “Be offered at or below price parity with competition”

Both the old and new royalty programs will exist side-by-side and publishers will be able to choose which one they wish to participate in. The new program comes into effect on June 30, 2010. Note: the 70% royalty option will initially be available to US publishers only.

There’s a new e-book reader on the market … and it will wrap itself around your little finger. Literally.

The new Readius is made with a screen that folds up into a tidy package for carrying and is flexible enough to wrap around your finger.

The resolution and screen quality are comparable to the Amazon Kindle since both devices use E Ink technology. The Readius display is a little smaller than the Kindle — 5″ diagonal versus the Kindle’s 6″ — but the Kindle doesn’t fold up to the size of a cell phone. The Readius also lets you download email, which the Kindle doesn’t do.

Many e-book readers have launched and failed. Can the Readius put a dent in the growing Kindle market? While the Readius has a “cool” factor with the bendy screen, the Kindle has a big headstart and the Amazon infrastructure behind it.

The big downside of the Kindle and the new Readius is that they are essentially single-purpose devices. They read e-books. OK, they can both read newspapers too.

But where is the flexible screen that can do it all and won’t tie us down to proprietary file formats?

Years ago I read a prediction that said one day we would all carry a single, rollable screen that served as newspaper, book, web browser, e-mail reader and computer desktop. That’s the device I’d like to see.

So to the Readius, I say, “Good start.” Let’s see what you do next.

A new article in Publisher’s Weekly points out yet another potential casualty of the high price of gas: author readings. Bookstore owners are concerned that crowds won’t come out to hear authors speak if the price of gas goes much higher.

Already the publishing industry has been feeling pinches over gasoline shortages. Most notably, the price of paper has shot up this year, and the cost to ship books from printer to warehouse to customer is climbing also.

Yet a solution does exist, and smart authors are using it already: technology. A whole universe of media — from podcasts and viral video to live chats, blogs and Twitter — can be used to promote books and interact with readers far and wide. It’s low-cost and easy on the environment, too.

For marketing, virtual seems like a no-brainer. But how about on the production side?

The New York Times reports that among publishers at Book Expo America a couple of weeks ago, the feeling about e-books was “unease.” Seth Godin points out that publishers are missing the forest for the trees:

“The fastest-growing, lowest cost segment of the business, the one that offers the most promise, the best possible outcome and has the best results… is causing unease!”

Sales of electronic books are rising, thanks in part to the emerging popularity of Amazon’s Kindle reader. After just 8 months on the market, Kindle sales account for 6% of Amazon’s volume in books where electronic and print versions are both available.

So are we seeing the final days of print books? Not quite yet.

Many people still say they far prefer reading a print book over an e-book. Even among kids under 17 — the one group who you think would embrace a digital book — nearly two-thirds still prefer print versions.

So what’s a publisher to do? Know your market and what they want. Be open to changing tactics where it makes sense and can save you money. And keep your eye on the oil. Maybe the decline in fossil fuels will be the tipping point that pushes reading into the digital realm.