What's the right price for an e-book? No more than $10, says a group of Amazon Kindle e-book owners — and they have found a novel way to make themselves heard.

Some 250 Kindle readers are using Amazon's own book-tagging system to mark e-books priced more than $10 with the tag '9 99 boycott'. Their argument: A Kindle book is more restricted in its use than a paper book and therefore should not cost as much.

"It just doesn't seem right," says Crystal O'Brien, a Connecticut librarian who bought a Kindle last year. For the last few days, O'Brien has spent a few minutes every day in the Kindle book store tagging the more expensive digital books with the '9 99 boycott' tag and removing it once the price drops below the threshold.

"You are not getting something you can lend out to other people, you are not getting a physical item," says O'Brien. "So you shouldn't have to pay so much for a digital copy."

The protesters are the latest in a long line of consumers to rebel against restrictive copy-protection technologies. Music lovers have been circumventing copy protection for decades, leading some labels to begin removing digital rights management (DRM) technology entirely. Film studios and consumers have clashed over copy protection in DVDs. Even iPhone apps are not immune from DRM-busting pirates.

As e-book sales have taken off, they may become the next copy-protection battleground. Last year, sales of e-books rose 68.4 percent from the year before to $113.2 million, even as overall book sales fell 2.8 percent, according to the Association of American Publishers. Much of that growth has been driven by the Kindle's popularity.

The Kindle reader revolt is likely to be little more than a minor annoyance for the fledgling e-book reader. Amazon launched the first generation of the Kindle in November 2007 and an updated version in February this year, and while the company has not released official sales figures, analysts estimate that the company sold half a million Kindles in 2008. By comparison, 250 users is a tiny drop in the bucket.

Still one of Kindle's strengths over its competitors has been the number of books available in Amazon's book store. Amazon has often said New York Times bestsellers and new releases are available for $10.

But O'Brien says that the $10 price is just one part of the story. Looking back at her history of purchases on Amazon she has found prices of e-books steadily creeping up.

"Some of the Kindle books now cost more than their paperback version," she says. For instance, she points out that she purchased a digital copy of Small Favor, a book by Jim Butcher for $10 in June last year. The Kindle price then jumped to $13.94 and is now back to $8. A paperback version of the book costs $10.

"On material items, prices can fluctuate but why would a Kindle book go up in price?" says O'Brien. Amazon.com has not yet responded to a request for comment.

O'Brien and other Kindle users who have joined the revolt have used the boycott tag more than 7,200 times so far. "It doesn't take that much time to do, and it sends out a message," she says.

Kindle books are limited in their use: They cannot be donated to a library, sold to a used-book store or even Amazon's used marketplace or traded elsewhere. In addition, some books are badly designed and offer little pictorial or other kind of visual relief, they say.

It's a valid argument for readers to make, says Andrew Savikas, vice president of digital initiatives at O'Reilly Media. "The typical knee-jerk response from publishers is to usually explain their costs," he says. "But readers are speaking vocally and implicitly with their pockets about what they are willing to ultimately pay and that's what matters."

For publishers, the majority of a book's costs is not in the printing or shipping, says Savikas. It's in sales, marketing, product development and editorial. "Its more about the fixed costs," he says.

But communicating that to buyers isn't easy. So instead of setting the price of e-books based on costs and a small profit, publishers should find a new way to price their products, says Savikas.

"Ask what price the market will support, and then build the cost structure that will allow you to make money at that price," he says. O'Reilly Media doesn't sell digital books through Amazon's store but offers e-books through its own website.

Kindle owner Tim Stevens, a software consultant who bought his e-reader last year has so far purchased about four books from Amazon's store. Stevens hasn't joined the '9 99 boycott' movement yet. He says he can understand why some users feel so strongly about e-book pricing but is not sure picking on $10 as the magic number is right.

"It seems rather arbitrary to me," he says. More importantly, it misses the point of an e-book. "No doubt I would want e-books to be cheaper, but its more about the peace of mind that comes from the convenience of the format," he says. "I don't mind paying a few dollars more for it."

For Amazon and book publishers, the best hope now is that more Kindle owners continue to think like Stevens rather than O'Brien.

Photo: Jim Merithew/Wired.com