The current financial model for books is pretty simple. Publishers sell to retailers and retailers sell to consumers. It doesn't get more straightforward than that. I don't see that model going away, at least not in my lifetime, but how could it evolve?
Wiley colleague John H. was kind enough to send me this link, which is a post by Booksellers Association blogger Martyn Daniels. In his post, Daniels has this to say:
Shanghai-based Bookgg is exploring a new advertisement-powered free book business model. The consumer selects the book and then selects the sponsors with their placement in the book until the price of the book drops to zero. The book is then printed and posted.
The flexibility this implies is quite interesting. Regardless of whether you're open to ads or not the model can be tailored to suit your needs: Pay less for the book with advertising or pay full price with no advertising. It's also easy to see where this could be applied to either e-books or print-on-demand (POD).
A separate e-mail thread with another Wiley colleague, Abe G, caused me to realize that you could easily take it a step further and automate the whole process. Rather than having to select which ads/advertisers you're willing to tolerate, just turn a virtual dial to calibrate the finished product to whatever price-to-ad ratio you prefer; the system would then use an AdSense-like engine to figure out which ads should be included. Do you suppose Google is thinking much about this or are they too focused on the lower-hanging advertising fruit tied to television, newspapers, etc.?
Again, I don't see the current model disappearing, but something like this would be a nice alternative, especially for e-books/POD.