This NYTimes article about the James Patterson juggernaut is interesting, but what I wanted to share from it is this succinct summary of how publishing began to freefall:
"The story of the blockbuster’s explosion is, paradoxically, bound up with that of publishing’s recent troubles. They each began with the wave of consolidation that swept through the industry in the 1980s. Unsatisfied with publishing’s small margins, the new conglomerates that now owned the various publishing houses pressed for bigger best sellers and larger profits. Mass-market fiction had historically been a paperback business, but publishers now put more energy and resources into selling these same books as hardcovers, with their vastly more favorable profit margins. At the same time, large stores like Barnes & Noble and Borders were elbowing out independent booksellers. Their growing dominance of the market gave them the leverage to demand wholesale discounts and charge hefty sums for favorable store placement, forcing publishers to sell still more books. Big-box stores like Costco accelerated the trend by stocking large quantities of books by a small group of authors and offering steep discounts on them. Under pressure from both their parent companies and booksellers, publishers became less and less willing to gamble on undiscovered talent and more inclined to hoard their resources for their most bankable authors. The effect was self-fulfilling. The few books that publishers invested heavily in sold; most of the rest didn’t. And the blockbuster became even bigger."