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The rumors of the demise of the publishing industry are greatly exaggerated.
Unlike newspapers, changing the medium should have no affect on the big publishing houses. Their role: advancing the authors to fund the work, selecting high quality work to fund, editing said work, distributing it, and most importantly marketing will all still be required, whether we read dead trees, digital ink, or by direct download to the brain (this sentence has tended to go a little long, but I hope it serves to make a point that many people, myself included, or rather, myself especially, should never be published). The only role that this eliminates is the printing press itself, which is really only a small, and environmentally devastating, portion of the total cost of the work that publishers do.
As a consumer, If every work was a vanity publication, I don't know what I would do. I am sure a company would quickly emerge that sorted the vanity works, funded ongoing projects that should promise, edited them, distributed them to popular brain-download merchants, and marketed the work to make sure they got their investment back.
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