[cstross]

The publisher isn't a distributor. Rather, they provide editorial and marketing services and a hell of a lot of inputs that are largely invisible to the end user. The lions share of the profit doesn't go to the publisher -- who typically nets as much as the author after paying for all the pre-press stuff -- but to the distribution channel. Which is Amazon (insofar as they're trying to take over and merge the roles of distributors/wholesalers and retailers).

[veyron]

Isn't that true of all businesses though (music, movies, games, and other media)?

[true_religion]

It's true in games.

But it wasn't true in music---the industry was vertically integrated.

For instance Virgin Megastore sold records in London, and world wide.

Virgin Music produced those records.

Virgin Music Group (known in the US as EMI) handled distribution of the records to out-of-chain companies.

Virgin even broadcast under the label Virgin Radio, and sponsored festivals such as the V-Festival.

That's just one example, but the whole industry was integrated to various degrees.

[wiredfool]

Up voting here, cstross is a subject matter expert.