Actually, I think you missed my point. I was talking about the historical reasons that publishers came into existence. At that point in time, it was (and still is) a huge expense to run a printing press and book bindery. Then, they took control over the distribution channel. These are huge costs- Lulu doesn't get your book into B&N. I was speaking to a future where bookstores are as rare as record stores as one where those costs are not significant.
It is just a historical accident that the people that control the printing presses control the rest of the process. It used to cost quite a bit. With on demand printing, there is little need for their services.
"In the 1800s, or early 1900s, there was massive capital required to print a book. As a result, the books that people bought, came from those who had capitalized the printing presses. Now a days, the publishers are historically tied to those large printing presses, which really are less relevant with inexpensive on-demand printing. "
But this overlooks that you don't need to _own_ a printing press to have your book printed/bound.
Every town I've ever been in has had several printing companies that would do all types of printing jobs for you. Including your book and binding, if you were so interested and actually had a need for 5,000 of them.
LuLu, btw, is the _counter example_ to this. They are hugely expensive, but convenient for very small print runs.
Yes, large book publishers can print a 300 page book for $1, whereas it will cost you $2.50 to do so at your local printshop, but the real risk is the fact that you probably spent 4 months of your life writing a book, and paying people several thousand dollars to edit/proof/provide art, all for a book that may sell 70 copies @ $15.
I think we do agree, that (one) real value of publishing companies has been their ability to control the channel (book stores). I think we differ on their importance in developing books (Copy Editors, Editors, Proof Readers, Designers, Artists). I don't think you've commented on the publishers ability to spread risk over thousands of authors (and also pick the good ones!)
Now, authors still need book shelf space _today_, as ebooks do not yet dominate. This is why a famous and well known author, with their own brand, would stick with a publisher when they already have a brand. They need the channel. I like your quotation "Lulu doesn't get our book into B&N." :-)
But, Peter Hamiliton or JK Rowling are in the drivers seat. Unless they've been tied down with contracts that prevent them from going elsewhere, I would think that, right about now, they would start to realize they can go their own. They don't _need_ a publisher. They can personally hire their own editor, copy editor, proof reader, design, and artist, and self publish. Why more famous authors don't pull a Stephen Covey is beyond me.
It is just a historical accident that the people that control the printing presses control the rest of the process. It used to cost quite a bit. With on demand printing, there is little need for their services.