On the update, from Stross, on publishers selling direct: It certainly would be a nice endpoint, but there some significant challenges. Two of them:

Can the publishers create a brand?
Speaking for myself, I have no interest in who publishes a book, or the label of a piece of music. I just need to know what I want (author/title). I already know where I can get it. I think that’s probably true for the vast majority of muggles. Stross may be underestimating the challenge here – as an author, the publisher is more important to him than to me. Can you see the author on Oprah saying “And you can buy my book at McMillan.com” as opposed to the assumption that it’s just available on Amazon, in Walmart, B&N and Borders (or the UK equivalents). It means that in addition to remembering the name of the author and/or title, you have to remember where to buy it. I don’t know how quickly sales drop off per thing you have to remember, but I’d be willing to bet it’s exponential..

Can the publishers give up the bigger top line revenue from the existing distribution channel to focus on the higher margins from marketing a direct-to-retail model.
Top line revenue can be a real distraction. Avoiding this distraction is helped if the publisher is not a public company and doesn’t have to manage to quarterly earnings announcements.

Killian.