I saw this tweet today and couldn't quite fit the response I wanted into 140 characters...
Any author who has ever felt harshly treated by Amazon reviewers should view The Casual Vacancy. Includes several "I haven't read this book" — Jojo Moyes (@jojomoyes) September 27, 2012
"There are no printing costs and virtually no delivery costs so why is the kindle version higher than a bulky hardback. Please explain I am all ears." "Really looked forward to this new book as a huge fan of JK Rowling but will not be downloading at such a ridiculous price.. Will wait for them to drop price or buy in asda where I'm sure it will be reduced soon!!!!" "How greedy to set the Kindle download as £11.99 which is more than the paperback. Won't be reading out of principal....."
...first thing worth noting is that this is for the hardback version, priced at £20 and reduced to £9.00 and the paperback isn't out yet. The Kindle price is £11.99.
Now, if someone said to me "Hey, you can have this heavy, bulky hardback book, it'll arrive tomorrow in the post, but for £3 more you can have one that will be on your Kindle right now. And it's really light & easy to carry around, it comes with its own built in light so you can read it in the dark (Kindle Paperwhite model), if you leave the Kindle behind you can just pick up from where you left off on your phone, iPad or laptop, one of which you probably do have with you. Plus you can see highlighted notes that other people have thought to leave, and afterwards it's not going to take up space on your bookshelf, but feel free to download again at anytime should you want to read it again".
I would say yes. Because I'm happy to pay extra for a book that has more utility.
There are things I can't do... lend it to someone else, give it to a charity shop, burn it, read it again in the future should Amazon pack-up and take their servers with them. But by the time I can't do that I'll be able to pick up a 2nd hand physical copy from around 1p + £2.73 shipping from the second hand dealers on Amazon or my own local charity shop.
So in essence the answer to the question "There are no printing costs and virtually no delivery costs so why is the kindle version higher than a bulky hardback?" is, because it's not a bulky hardback. I'm happy to pay £3 extra to not have to carry the thing around, or wait until the paperback is out.