In this post, I will offer a few thoughts on the impact of publish-on-demand (PoD) and electronic distribution (ED) on the book business. [Here's the Economist's view.]
First, both PoD and ED remove the need for warehouses and bookstores. Both distribution channels ship directly from the printer to the buyer, saving time and expense. It's possible to extend this argument to cut out the "publisher" (editor, design, marketing) when Amazon (et al.) are willing to connect authors directly to readers.
Second, PoD and ED remove the need for discrete print runs, returns and so on. That means that books can be continuously updated (the upcoming version 1.2 of TEoA will fix 4-5 errors). Way more important, the improved matching of supply and demand means that fewer books will go unsold -- lowering costs and thus prices to consumers.
Third, eBooks will expand the demand for books (instant gratification), even if they do not increase reading (limited time). Offsetting higher sales volumes will be lower prices -- 99 cent books are one thing; pirated books are another thing altogether. It's possible that pirating will force authors to make their money via paid public speaking -- the way that music artists now make more money in live performances.
Fourth, bookstores are in trouble -- in the same way that computer stores are already in trouble. People try the product in the store then buy it online (you can sit in
Bottom Line: People will still read, but they will pay less for a product that's distributed more efficiently (cutting out a few middlemen in the process).