From yesterday’s Wall Street Journal:

SEE ALSO: The E-book Investigations: Are Publishers And Apple Breaking The Law?

When Amazon.com Inc. introduced its first Kindle e-reader back in November 2007, the $9.99 digital best seller was a key selling point. Today, the price of a Kindle has plummeted to under $100—from $399 back then. But e-book prices for some popular titles have soared.

The WSJ says e-book prices have “soared” due to big-six publishers’ adoption of the agency pricing model, in which they set the price of their e-books and the retailer takes a commission. All the big-six publishers except Random House adopted the model in January 2010; Random House followed suit in March 2011. The practice put an end to Amazon’s pricing of big-six NYT bestsellers at $9.99.

Over at Digital Book World, Jeremy Greenfield analyzes the prices of the top 100 bestselling e-books on Kindle and Nook and finds that the average price of those books has actually dropped since 2010, due in part to the increased number of e-books at $2.99 or below on the lists.

For a broader picture, I want to focus on the big-six publishers—who are also the primary focus of the WSJ piece. Let’s go back a couple more years and see why fixating on $9.99 as the “correct” e-book price ignores the larger picture.

E-Books Weren’t $9.99 Everywhere; Amazon (NSDQ: AMZN) Sold Them At A Loss

While Amazon offered New York Times (NYSE: NYT) bestsellers at $9.99 on Kindle, that wasn’t at all the practice at other e-bookstores. In 2008, when I was working at Publishing Trends, I researched the availability of the top 30 New York Times bestsellers (for the week of March 30, 2008) as e-books through Amazon, Sony (NYSE: SNE), Mobipocket, Microsoft (NSDQ: MSFT), Adobe and Palm (NYSE: HPQ). (Yes, that list looks super-dated now and the Nook and Kobo weren’t around then. Microsoft, Mobipocket, Adobe and Palm didn’t offer dedicated e-readers; they had free e-reading apps for use on PCs and handheld devices.)

While the average price of a fiction bestseller at Amazon then was $9.99, it was much higher at the other retailers: The average price of a NYT fiction bestseller as an e-book at Sony was right around $15, and over $20 at Palm, Mobipocket, Microsoft and Adobe (NSDQ: ADBE). (This research isn’t online, but e-mail me if you’re interested in more.) Amazon sold $9.99 e-books at a loss, and as the data shows, other retailers could not afford to do the same. Agency pricing helps level the playing field. That’s why Barnes & Noble (NYSE: BKS) likes it.

Now that big-six publishers are using the agency model, generally pricing e-books between $12.99 and $14.99, those e-books look relatively expensive in comparison to the physical books that Amazon still buys using the wholesale model and prices low (taking no profit or a very small one in many cases). That’s what results in the “sticker shock” mentioned in the WSJ piece.