It's the return of the penny dreadful. Kids (and the young at heart) dreaming of adventure and hack-n-slash violence read these cheap little pulp paperbacks about horseback robbers and high seas pirate swashbucklers.
Two significant changes, now: It's had to adjust for inflation, but I think the convenience of getting it beamed to your device instantaneously makes up for it.
The second is that the overwhelming majority of the readership is women (in the comments of the original interview, Locke suggests that his readership is up to 80% women who fantasize, as they read his exploits, about "changing" the protagonist for the better).
Welcome to the indie economy revolution. First they came for the apps (the vast majority of the top 100 paid in the App Store and Marketplace are from indie developers), 1-5 team houses that need only split their massive spoils a few ways; and the numbers are massive if memory serves; something like $10000 a day for a top 10 game, and that's _after_ Apple's vig. And, those who choose free with ads or freemium on Android, can see numbers approaching 1-5k per day (unless you're Rovio, who claims about 35k a day from Angry Birds on Android.
The closest parallel I see to the App Store model is the arcade. Instead of a quarter a play, you pay a buck, but you don't have to shlep over to the mall to play with your friends since they're all on gamecenter or openfeint or Facebook and you can pester them about your score on your wall), and for a buck you get to keep the game.
It's still a gold rush, but with no end to the vein in sight because there are people all over the world with a buck in their pocket ready to buy.
But just like anything in life, you can't be horrifically bad at it and expect to make a killing.
I disagree -- it's cutting out the middleman. The actual author is making more money and has more (ie. complete) editorial control over his art.
Cutting out the middleman means returning things like writing to a craft rather than of an afterthought that is part of an industrial process of creating books. Instead needing an army of buyers, marketers, agents, retail placement specialists, etc, you return to the artist and his craft.
There will be alot of crap produced -- but then most bookstores are full of crap books that have been filtered through literary agents and publishers. Do you trust a technical answer from "Programming for Idiots" more than an answer from Hacker News, just because some guy in NYC proofread the book?
The author is only going to make more money if they're actually competent at their job.
Basically, taking out editors and marketers is like taking the autotune out of the music scene. If we actually knew what pop-singers sounded like, people wouldn't be shilling out even $0.99 for a single.
The publishing industry has notably made authors question their actual ability to write. Stephen King IIRC thought that his books were basically being rubber-stamped solely because of his name (just like many Hollywood movies can get green-lit solely because they've got a bankable actor in lead) and submitted works for review under pseudonyms to see if agents and publishers actually saw merit in the work.
Kindle is allowing people to make it by themselves, and solely by themselves, which is awesome. However, I think book publishers are still going to be around in a similar role for a long, long time mainly because they don't have an authoritative hold on their market so they willingly adapt. I don't see my legal right to sell a DVD/Blu-ray or CD/MP3 enshrined in the case, but look in any book and the 2nd or 3rd page generally informs you of your legal right to resell, lend or trade the book in a decent condition (AKA no pages missing, front cover intact).
Book Publishers have survived the "piracy" of book trading for years, but you see Hollywood, the recording industry and even video game makers trying to block peoples right to resell or trade what they purchased, because the only media we actually own now are books.
When this becomes more popular and every publisher moves online, editors and marketers will be in in demand, because it will be difficult to get anyone to download/read your stuff without a marketing campaign behind it. The digital market is still in its infancy.
"Book Publishers have survived the "piracy" of book trading for years"
They've survived traditional trading, because it's not much of a threat, and it's physically limited. Anything digital can and is being pirated and as it becomes easier and easier to get things for free, markets will suffer.
Newspapers have been the first real casualty and books will probably be next.
Cutting out the middleman means returning things like writing to a craft rather than of an afterthought that is part of an industrial process of creating books.
I don't know anything about publishing except for computer manuals and science fiction. Computer manuals are being slowly revolutionized, I think, by the Pragmatic Programmers (and their ~50% cut for authors, IIRC) and to a lesser extent O'Reilly.
In science fiction, the "middlemen" are perhaps slightly less exploitive than you suggest. The typical SF editor works in Manhattan for considerably less money than most of us make. The SF publishing houses, again, are not giant profit centers, and all but a few books generate modest profits. From where I'm standing, it's got "lifestyle business" written all over it.
Some authors, such as John Scalzi, are extremely happy to focus on writing, and not on contract negotiation, international sales, cover design, marketing, and so on. In economic terms, they're putting all of their working hours to the most profitable use, and farming everything else out to specialists. Or to put it in technology terms, they're like talented coders who dislike sales, marketing and management, and who just want to write code. Not everybody is an entrepreneur, including some people as business- and PR-savvy as Scalzi.
Plus, there are customers like me, who appreciate strong and talented editing. Karl Schroeder's novel Ventus had about 90,000 words cut from the second half at the recommendation of an editor, who said, roughly, The first half of the book is a lovely travelogue across a fascinating world; the second half is a mad race. You need to cut the travelogue stuff from the second half or you'll drive the reader nuts. By Schroeder's own admission, this advice improved the pace of the book tremendously.
Now, absolutely none of this is meant as a knock on people churning out penny-dreadful ebooks on the Kindle and making a killing. They're serving a real market need, and plenty of readers really want significant volume at an affordable price. In the military SF world, this need is mostly met by Baen's DRM-free webscriptions, which combine significant volume, low prices, and the occasional startlingly good novel.
The two explanations (low price point, new distribution model) are not mutually exclusive. Baen Books, for example, has offered free sample books for a dozen years now, with good results for some authors. But there's obviously a difference in promotion on the Internet at large and a more targeted conduit like Kindle -- I don't think the Baen Free Library has been responsible for an author appearing on the NY Times bestseller list. And I'm pretty sure the rapid success of people like Amanda Hocking and John Locke is unprecedented.
Two significant changes, now: It's had to adjust for inflation, but I think the convenience of getting it beamed to your device instantaneously makes up for it.
The second is that the overwhelming majority of the readership is women (in the comments of the original interview, Locke suggests that his readership is up to 80% women who fantasize, as they read his exploits, about "changing" the protagonist for the better).
Welcome to the indie economy revolution. First they came for the apps (the vast majority of the top 100 paid in the App Store and Marketplace are from indie developers), 1-5 team houses that need only split their massive spoils a few ways; and the numbers are massive if memory serves; something like $10000 a day for a top 10 game, and that's _after_ Apple's vig. And, those who choose free with ads or freemium on Android, can see numbers approaching 1-5k per day (unless you're Rovio, who claims about 35k a day from Angry Birds on Android.
The closest parallel I see to the App Store model is the arcade. Instead of a quarter a play, you pay a buck, but you don't have to shlep over to the mall to play with your friends since they're all on gamecenter or openfeint or Facebook and you can pester them about your score on your wall), and for a buck you get to keep the game.
It's still a gold rush, but with no end to the vein in sight because there are people all over the world with a buck in their pocket ready to buy.
But just like anything in life, you can't be horrifically bad at it and expect to make a killing.