Check out this story in the New York Times about the book business.
I like this quote from an editor:
“People think publishing is a business, but it’s a casino.”
I'm continually puzzled as to why no one has come along and found a way to make the book business work better for everyone. It's a complicated business, with a distribution and retail chain that's insane (booksellers can return books to the publishers for the full price, which takes too much of the risk off the retailers).
Part of the problem is that it would lose the lottery feeling, and the people who earn the big bucks would have to give some of them up. It doesn't make any sense (as you'll see in the article) for publishers to lavish huge advances on big name authors, on whose books they will lose money. But, as I read somewhere (I can't remember where)--bookselling is a business that doesn't really make sense in a corporate environment. If a publisher is privately owned, the owners can make a good living. But there is a fairly constant number of eyeballs out there, so the corporate desire of steady double digit growth in revenue and profit, isn't sustainable, long-term.
Anyway check out the article.