You might disagree with me, and you could point at the sales figures for CDs vs MP3s as proof. The current music market doesn't prove me wrong; you're looking at the wrong figures. If you want to understand the why the figures are wrong I'll first have to cover the fundamental difference between publishing and music. This will take a brief lesson on the history of technology.
A hundred years ago, the recording industry got its start with wax cylinders. These were quickly replaced with gramaphones (vinyl records), which eventually got replaced by tapes. Next came CDs in the mid 1980s, and finally MP3s right around the turn of the millennium. (BTW, the reason CDs stuck around and MP3s didn't take over the market is because a CD is already a digital product. It is trivially simple to rip a CD, and the same goes for burning MP3s to a CD.)
In all that time, publishing has relied on paper books as their distribution medium. While the recording industry went through 5 different transitions, publishing haven't seen any. They're still working in the age of the gramaphone.
People are going to jump on to the ebook band wagon faster than you might believe possible, but if you accept the paper books as vinyl records analogy then you might change your mind.
Think about what it would be like if everyone still used vinyl records for their music collection (no tapes, no CDs, no nothing). You'd have to carry around those honking big disks every where you went as well as a record player. The good models might get smaller, but they would still be rather bulky.
What would happen to the vinyl records if someone invented an MP3 player? Obviously most would dabble at first, but they would soon jump in with both feet. MP3s players are so much more convenient that any heavy music listener would leap at the chance to get one.
Read the previous paragraph again and swap out paper books and ebooks in the appropriate places. Doesn't that sound a lot like the existing book market?
So ask yourself this: What percentage of the market is made up by vinyl records? I'm pretty sure that tiny percentage is how important paper will be by the end of the next 5 years.
Now do you see why publishers are scared? They should be. This is not just a transition; this is a real honest to Cthulhu revolution.
What do you think?