Emergence of electronic-books has transformed the book industry drastically as electronic-books, such as Amazon’s Kindle, are posing a serious threat to the paper-books.

Packaging books and shipping them to shops is becoming obsolete and publishers are in danger as book publishing resembles the music industry of the early 2000s.

As the e-books are becoming more and more affordable and sales of paper books are falling, publishers' fixed costs are becoming more burdensome. A New York publishing executive said, "If e-book prices land at 99 cents in the future we're not going to be in good shape.”

However, e-books are also offering publishers an opportunity to earn more than what they did in the past. Prices of e-books on several new national best sellers are higher today than at the start of 2010, thanks to new pricing model.

Under the new "agency pricing” model, retailers act as the agent for each sale and pocket 30 per cent of the profit, and return 70 per cent to the publisher. Moreover, the agency pricing model doesn’t allow a retailer to discount the price without the consent of the publisher.

However, spending money on an e-book reader is not a one-time investment as technical upgrades render it redundant in a few years.