The greatest threat and biggest opportunity is the Internet

Also I think DRM is a threat to the publishing industry.
Really it's quite simple, they just need to provide material to consumers at a reasonable cost, make the ebooks easy to obtain, have a sufficient range of ebooks and make licensing flexible enough so you can use them like you would have used a paper book (able to share a book with a friend once you have finished with it). At the moment DRM acts as an impediment to the uptake of ebooks.