Not all entertainment is equalSome things just can't substitute for another. Rolling Rock for Guinness. Brad Pitt for Humphrey Bogart. Spongebob for Bugs Bunny. E-books for paper books.
Well. Maybe they can.
It's tempting to think that all creative endeavors need the same kind of business model. Historically, it's been true. Due to production costs (and duplication) costs books, music, and movies all had vaguely similar production and business models.
And then came modern computers.
First, music took a hit (and still is). Physical CD sales are bottoming out. MP3s (or FLAC, or Ogg Vorbis) are a near-perfect substitute for what you would buy in a record store. Perhaps the best indication of this is what so many of us do when we do get (or buy) a physical CD - we rip it to a MP3 player. The audiophiles who love the "warmth" of vinyl are romantic and part of the market in the same way that classic car restorers are part of Toyota's business plan.
And, of course, it made it easier to share music.
Both of these are a huge problem for record companies - but surprisingly not so for artists. For all but the biggest (and especially for mid-range and small artists), more financial support has come in through performances than through record sales. So for these artists, it's made sense to make more of their work available to more people through services like Jamendo, or free downloads from last.fm. In some ways, making some work available via a CC-license is roughly akin to radio.
The movie industry has taken a hit as well, though not as badly. While the technology is still becoming available to produce an independent movie, there are often huge quality issues.  Still, digital transformations have come to such a point that I know people who only use the streaming portion of their Netflix account. Both independent rental places and huge chains like Blockbuster have taken a massive blow due to the changing distribution model. Hence the huge drive for 3D and IMAX movies. Those are experiences that cannot be perfectly substituted by the DVD or streaming video at home.
But this is just recap. My real interest as a fledgling writer is in the publishing industry. Publishing is a weird beast. Movie studios and record studios  go for profitability with nearly every release - either monetary profitability or awards. There's a reason so many documentaries were underwritten by universities - until they became popular again in the last few years. There's a reason why indie artists tend to sound so different than the monoculture of the big music industry.
To the best of my knowledge, publishing - even the big houses - isn't run that way. They lose money on most books, but at least get them out there. It's akin to the way media industries used to view news programs - not as profit-makers, but something that added to the cultural landscape.
But no matter how noble that is - and it is noble and good - at this point the publishing industry has all the problems of both the music and movie industry. That's what we'll hit on tomorrow.
 This is my personal experience; YMMV.
 The big ones, and I reserve the right to be wrong here.