I don't have any particular insider status into publishing, and when I was younger, I used to let that hold me back. I'd be working for a particular publishing house, and I'd be wondering how the hell we were going to stay in business, because I couldn't see how we were going to make money. Then I'd realize that I was just a young lady without much experience who didn't know anything and that the people running the place had much more experience and surely had everything under control.
And then the business would collapse, and I would be out of a job.
Once, when I worked for an encyclopedia, the entire industry collapsed. There we were, selling sets of encyclopedias for $1,000, and Microsoft was throwing in a set of encyclopedias on CDs for free whenever you bought a computer. Those CDs, by the way, were simply lifted off print encyclopedias, so we were like, These are an inferior product! But for free...? Versus $1,000...? Yeah, to save $1,000 you'll deal with Wikipedia's quirks. Plus now that the Internet is so robust, if you know what you're doing, you can find much better information on-line than you ever could in an encyclopedia--I still have the set they gave me when I worked there, but I almost never use it.
Was the collapse of the encyclopedia industry bad? Well, it sucked for me at the time (although getting laid off for the second time in sixth months inspired me to stop screwing around in editorial and go to journalism school), but as someone who looks stuff up pretty frequently, I freely admit that what replaced it was much better.
I think a similar thing is going to happen in publishing. I look at Trang, and you can buy it for $15, or you can buy the exact same book for $3. I just don't see a bright future for that $15 book. In addition, I make the same amount of money either way, so I have no motivation to try to limit your access to that $3 book--save yourself $12! Please!
Of course, in many cases you're not getting the exact same book--you're getting a self-published book instead of a traditionally-published book. You can talk about how special traditionally-published books are and about how hard editors work sifting through all the dreck on the slush pile, but for a 99-cent book, people will forgo the pleasure of fancy covers and will do their own spadework. Nobody cared about how hard we worked to make those $1,000 encyclopedia sets--they just cared that they cost $1,000, and other means of obtaining similar (albeit not identical) information did not.
Will print books vanish? Not in a hurry. But if print-on-demand publishers can profit (and make authors profit) from those 5,000-copy (or 500-copy, or 50-copy) book runs while traditional publishers cannot, the companies producing those print books will quickly change.
I think there still will be commercial publishing houses, but they will be both smaller and more profitable. That's because everybody will self-publish first. Sell over a certain amount? A publishing house will come to you and say, Wanna be in Target? Wanna be in airport bookstores? It will be a safer business for them, although a much smaller one, because by the time a house identifies a top seller, there's not much left to be done for it. They won't own a huge chunk of the rights, because all they're doing is extending the print reach of the book. And as more people own e-readers, fewer will be picking up books from the drug store, so even that value will shrink.
I predict a lot of blood on the floor for everyone in the publishing industry--in particular, I don't hold out much hope for smaller houses--but I think the people who are good at book editing and design will find new careers: They will sell services to authors who are self-publishing. There will still be a need for high-quality beta reading, line editing, copy editing, cover design, art design, and formatting services. Teaching writing will become an even-more viable profession as writing itself becomes more profitable. The major problem with self-publishing services nowadays is that they attract sleazy people hoping to take advantage of the naive and delusional, so some kind of professional organization with a code of ethics and standards is probably necessary. In addition, certain editors could essentially function as brands, much like certain publishing houses and imprints do today.
And clearly, if I'm churning out long posts like this one, I'm feeling better and need to get back to work!