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Ficbot is on it for the most part.
Authors will still face the common issues - obscurity and making a living out of the written word. They will have to be more involved in the business of authorship
Publishers will have to face the fact that they will have to partner with the author in which the author is more a customer than a raw material.
Selling reams of paper will no longer be a viable business model for either of them. The stories, the written works, are no longer finite in supply and artificial scarcity is simply a dead end.
Thats the bad news.
The good news is that authors will be more in control of thier businesses. Better able to construct a business that involves more than just throwing manuscripts over a wall in hopes of a better deal each time. They can involve themselves in creating many business opportunities more than just writing.
Publishers have an opportunity too in that they can partner with authors to help create that business built around the author. Promotion, editing, presentation, accounting are all still efforts that many authors wont want to be involved in.
One interesting thing I saw was a book supposedly written by the character in the "Castle" TV show. its exactly the sort of thing we'll see more of. In this case, fans of the tv show are buying more than a book to read. When they buy the physical copy, they are essentially buying a prop from the show. A physical fan item. people who read the digital version may become interested in the show and drive its popularity and thus more advertising dollars are gained.
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