A very great deal is written about the future of book publishing - much more than on its present or past - and the only takeaway from all these oracles seems to be that a great empire will be destroyed. Or will it? I submit that most of the changes that publishing is undergoing are alterations in degree rather than kind, and that the DNA of the business already includes models that, with a little adaptation, will prove the key to its survival.
Let's first of all take the fifty thousand foot view. From here, the ultimate success of a book concept is to break out of print and spread its story and characters across a rainbow bridge of movies, games, toys, lunch boxes and who-knows-what. I appreciate, of course, that's not what every author is striving for. I'm usually not myself. But we're talking about commercial success here, not creative success. Some unseemly snuffling around the trough is inevitable.
Not every property (I warned you we were at the trough, didn't I?) is going to be Iron Man, but as we zoom in we see the same pattern, only now it's repeated across fewer media, or even just subspecies within one medium. Excepting the call from Hollywood or Hasbro that may never come, publishing can most efficiently monetize a work by releasing it in many forms to target different segments of the market. Think of it as a funnel in which the pile-'em-high-sell-'em-cheap (or free) stuff is there to draw in a flood of readers who you can filter down through bands of commitment towards the premium purchases.
This will likely lead to the reversal of the usual pattern of releases, which began with the hardback and often went no further than the trade paperback twelve months later. That model implicitly conflated two premium attributes: the quality/durability of the product (bigger format, hard cover, dust jacket) and the availability (I'll pay not to wait a year to read it). Nowadays the immediately available format is also the one least intrinsically valued by consumers, as it's just a squirt of bytes down the broadband pipe. That's one reason why publishers (corporate or individual) shouldn't be in too much of a hurry to abandon print. People place a high premium on gifts, whether for others or for themselves, and they don't see virtual goods as gifts.
This is where the plucky self-publisher will struggle. They can set up their books for print on demand, but few will have the resources to produce the deluxe box sets with fold-out maps and meticulous annotations (I'm picturing a series like Peter Wimsey or Inspector Rebus here, if that helps) for which the aficionados will pay lavishly. In fact, few will have the marketing resources to build a hardcore of aficionados in the first place. Even worse, much of the early money in publishing may in the future come from subscription funding (think HBO for books rather than twitty fanboyish pitches on Kickstarter) and self-publishers as they start out lack the brand power needed to make that work.
Okay, so what are the advantages that the corporate publishers can still boast? The main ones are - as they have ever been - deep pockets and a full Rolodex of key media contacts. (I'm not including editorial skills here because you can hire those, although I'm not convinced an editor can do their job properly when the author is the one paying them.) If you're an author whose work is geared towards building a highly esteemed brand then in general you are going to need the careful nurturing over several books that publishers (sometimes) (used to) give.
If you're out in the cold then you're mostly stuck with the pile-'em-high model starting out, and you just have to hope that either attracts the attention of a publisher or makes you enough money in its own right to fund all the other stuff. Good luck if you take the latter route; that crunching underfoot is the remains of other authors who went before you. And if a publisher does notice you, remember that they're no longer the T-Rex and you the trembling hadrosaur. You can benefit from partnering with them, but it no longer has to be indentured servitude. Treat it like a joint venture. You are bringing a following and the work that you invested time and craft in making. Make them reveal what they're going to contribute. If they won't be transparent, you should walk away.
But how does our intrepid self-publisher ever get to that first ledge on his/her way to the summit? Unfortunately, probably not by writing the kind of fiction you'll be proud of in later life. (I say this as one who has hacked his way through any number of paying jobs, and I will readily accept being called a mercenary only to avoid a term with even less admirable associations.) So you find a "tribe of readers" whose tastes are clearly definable by the specific box-ticking requirements we call a genre, the tighter the better for or purposes, and you craft stories that fit that genre and you market yourself (again we must avoid the disparaging p-word). Remember that Rolodex on the publisher's desk? It has less of a competitive edge when the readers you're targeting all gather at the same internet watering holes and tend to shun the books section of the New York Times as if it were a monolith found on the moon.
Now, hopefully you will yourself have some liking for the genre when you start out, otherwise you will be making for yourself a very special kind of hell. All the same, even if you are a part of that tribe you're setting out to please, if you have any degree of real talent you will inevitably come to the same conclusions as Theodore Sturgeon in his SF writing - only you may not share his lenient assessment that only ninety percent is crap. You may be in business flying high, but try seeing it from the other side of the mirror: rather than real success as a writer, you have had moderate success as a marketer. At least, being a writer, you're well qualified to appreciate the irony there.
If your own tastes run more to Henry James than E L James, you will find all this talk of tribes to be very far from your own understanding of the value of literature. If so, it's not all bad news. While half a million (hey, I'm trying to be optimistic) new would-be writers are all lining up to sell 99-cent trinkets to the tribes, the area of non-genre fiction will be less aggressively targeted. There, each book you write will be quite different from the last, the quality that holds your readers being, not a two-fisted detective or the shenanigans of galaxy-hopping rapscallions, but rather the pleasure of spending time with your imagination and your particular authorial voice. I never said it would be easy, but as the tribal market gets saturated by willing hacks, I remain hopeful that the self-publishers who are trying to pull off that most fundamental goal of literature - to surprise and delight - will still find some wriggle room.