The Bookseller recently reported falling book advances, which is one of the predictions made by some authors as the rising digital market takes hold and publisher's profits slip. Presumably, one would expect this is the type of across-the-board cut made in any evolving industry as it adapts, and not just a cut to the most convenient line item of a book's cost.
There are only three advantages a traditional publisher currently has over self-publishing through a digital platform: 1) the ability and willingness to give the author money up front; 2) the ability to get your books on store shelves; and 3) whatever prestige remains in being "a real published author." It's clear that by choosing prestige you are likely to cost yourself dearly. In fact, I am almost willing to call taking a $500 (or pound) book advance "The New Vanity Publishing." Because even someone with limited marketing skills should be able to make $500 in five or six months off a self-published ebook and POD.
No, I am not saying "Traditional publishing is dead" just because I released some books through our small company. I am still connected to New York and think the industry is great at what it does and I'd love to route some of my projects there. It's just no longer a no-brainer decision to sign on the dotted line, because there are so many factors involved and the long-term income may prove more important than the short-term income. It's clear that declining advances will further widen the publishing classes--bestsellers and everyone else. Bestsellers are still profitable, even under the clunky and inefficient model of discounted hardcovers. I am just not sure whether most authors should be willing to subsidize the practice on the off chance they will punch a lottery ticket and join those rare ranks.