(As I’ve previously mentioned, Scott Nicholson and I are swapping blogs today. I talk about my journey into indie authorship on his blog, while he makes a few, um, interesting predictions here. Don’t hold back, Scott. Tell us what you really think. :) If you’re on Twitter, follow the #pubfuture meme for more.)

By Guest Blogger Scott Nicholson, as part of his Kindle Giveaway Blog Tour

Debbi and I kick emails back and forth about the changing industry, the writing business, promotional ideas, pricing strategies, and all sorts of questions for which writers must now peer into their crystal balls. There’s really no road map, and no right way or wrong way. The only certainty is doing nothing is a road to nowhere.

In some ways, Debbi’s career strategy is the exact opposite of mine. She believes in building an audience with rock-bottom prices and doling out books over time and hoping the audience builds. I believe in putting everything out at once at a low but fair price, leaving a little financial incentive to write more books, and hoping one of the books finds a wide audience and pulls the others up.

I’ll be the first to admit I don’t know much. But I am acting on what I currently believe, based on 14 years of writing, six books published in New York, two books published in the small press, and with about 15 e-books out there on my own. Most of my digital opinions have been formed in the last few months, paying close attention to what’s happening with the publishing industry, with bookstores, and with the e-book market.

Debbi’s over at my place while I am here. So go over and say hello. She’s doing a giveaway, and I will randomly select someone here from the comments within seven days to receive an autographed copy of THEY HUNGER. Of course, you’re also entered for the Kindle giveaways.

Now, the future according to Scott:

1. The Kindle will deliver the knockout punch to the Nook, Sony Reader, and Kobo e-reader by Christmas 2011. And it will have Apple to thank, because the iPad solidified the Kindle app as the default program for reading e-books. The iBookstore will only get sales in the technology genre.

2. By December, many of the indie writers who jumped on the $2.99 pricing bandwagon for e-books will drop to 99 cents in an effort to drum up numbers. The downward spiral catches other writers as readers become trained to expect 99-cent e-books, and the top starts coming down. By 2012, we will all look back and shake our heads in wonder that we were debating the validity of a $9.99 standard.

3. The Big Six group of publishers will be down to the Big Three in five years, and Amazon will be a bigger publisher than those three survivors put together. The Big Three will have stripped-down staffs that primarily manage content, watching royalty streams from the e-books they have hoarded. (See Dorchester Publishing for a harbinger of this model.)

4. Small publishers with identifiable markets will adapt better than large publishers who have no identifiable markets, because publisher brands are meaningless to the average reader. In fiction, authors are the brands instead of the publishers. In non-fiction, the subject matter is the brand. Authors who already know their audience will adapt better than both levels of publishers.

5. In five years, there will be about 200 bookstores in the United States, centered in the major cities. They will die faster than video stores have over the past five years. In an ironic reversal, the collapse of chain bookstores will open the door for boutique indies to rise again, operated by people who know their customers and understand their products as nostalgia items, and who will hire clerks who care about used books.

6. In five years, there will be 10 million e-books for sale at Amazon. Currently about 5 million paper books are for sale, and the pace of e-book upload will only accelerate. There will be no more slush manuscripts lying around. They will all be published. So will all the doctoral theses, term papers, shopping lists, and literary manifestos that decry the commercialization of publishing and demand that all content is free in a free society.

7. The publishing industry won’t exist in 10 years. Instead, we’ll have 20,000 cottage industries supplying digital content, very few beyond the hobbyist level. Savvy agents and editors will be running their own freelance support industries, but most will have entered other fields. Lawyers will figure out a way to get into the middle of everything and ensure there is some kind of gatekeeper, or at least a system taking money away from both readers and writers.

8. In five years, even the e-book bestsellers will sell for 99 cents. Most of the rest will have no value. Only bestselling writers will be willing to write for such a low profit margin, because they will make it up on quantity. It takes 200,000 sales a year of a 99-cent e-book to earn the author $70,000, a nice middle-class living. That’s assuming the author owns the rights and fired the agent. Otherwise, even bestselling writers will have day jobs.

9. The 20 surviving novelists still getting published in print in 10 years will make out like bandits. Browse the book shelf (that’s singular) at the local Walmart of the future and there will be eight Pattersons (whether he is still living or not), three Grishams, two Evanoviches, and a sprinkling of whichever Hunger Games/Vampire Dairies/Sookie series is still hot. Hardbound books will cost $40 and there will be none of the competition that leads to deep discounting.

10. The authors unfortunate enough to have been moderately published in New York this decade will be the worst off in 2020, when most sales are digital and they have signed clauses that basically grant their e-rights in perpetuity. They will lose all incentive to promote the books, and New York’s hammer will carry no weight anymore. Fifteen percent of a 99-cent e-book, minus the agent’s 15 percent, means an earning of about 12 cents per sale.

Oh, wait, you had one of those smart agents, who insisted on 25 percent of net profit instead of 15 percent of list price? The publisher is now making only 30 cents per sale, so the writer’s cut will be about five cents per sale after that smart agent grabs a couple of pennies.

11. The Big Three will have some spin-off revenue in enhanced digital books, but only for the brand-name authors who died and didn’t have heirs smart enough to start their own publishing companies. Enhanced books will be a temporary niche market because they will start looking like dull, static versions of video games and movies. Right now they are cool, but only because they are books. When they quit being books, who cares?

12. In a desperate survival attempt, publishers will move to a subscription model, similar to the Netflix model, where consumers pay a flat monthly fee for the books they want to read. This means authors under contract will make even less money, similar to the penny-fractions of royalty paid to songwriters each time their tunes are broadcast on the radio.

13. By 2013, 85 percent of the writers who published their rejected manuscripts in 2010 will give up for good, retiring with $200 in net profit and a good story for the grandchildren. Ten percent will still be doing it because they are artists first, sensible people second. Four percent will be able to quit the day job for a few years. And, just like in every recession or collapse, the top one percent will get even richer and more powerful.

14. The smart writers who are dumb enough to stick with it will earn their money through content advertising, product placement, multimedia branding, and tireless promotion. Instead of begging people to buy their books, they will be begging people to steal their books, because circulation will be what they sell to their sponsors, patrons, and clients.

15. Half of these predictions will be wrong, and no one will be able to tell which ones they are, because this blog post will be stored in a free e-book that no one ever reads.

16. I will still be writing in 20 years, and no one will care about my predictions. I won’t be in the top one percent, but Debbi Mack will be. For a day job, I will be a consultant for a start-up company that just figured out that if you mash up a pine tree, it makes this flat, bright surface that holds ink pretty well. We’ll invent a device that can apply the ink in a consistent and legible format, and then create sounds and meanings to apply to these mysterious marks we’ve made. We get on the phone to Steve Jobs, and we are never heard from again.

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Scott Nicholson is author of Speed Dating with the Dead, Drummer Boy, and 10 other novels, five story collections, four comics series, and six screenplays. A journalist and freelance editor in the Blue Ridge Mountains of North Carolina, he often uses local legends in his work. This tour is sponsored by Amazon, Kindle Nation Daily, and Dellaster Design.

To be eligible for the Kindle DX, simply post a comment below with contact info. Feel free to debate and discuss the topic, but you will only be entered once per blog. Visit all the blogs on the tour and increase your odds. I’m also giving away a Kindle 3 through the tour newsletter and a Pandora’s Box of free ebooks to a follower of “hauntedcomputer” on Twitter. And, hey, buy my books and put me in the Top 100 and I’ll throw in another random Kindle 3 giveaway through the blogs. Thanks for playing. Complete details at http://www.hauntedcomputer.com/blogtour.htm