Anthony Cheetham, who's probably had his hands in just about every major UK publishing house at some point, has started his own company with Quercus Books. So it's with this interest in mind that he writes this essay for the Bookseller about conglomerization and where the smaller players fit:

A conventional answer would be that there is no room for a middle ground, only for the very big or the very small. But I'm not convinced that the conventional argument works for book publishing in the same way that it does for making movies, creating automobiles or selling groceries. The main difference is that publishing carries low entry costs. Distribution is a problem for small operators, but not an insuperable one: bookselling chains have become more discriminating, but they are choosy about books rather than suppliers. Authors prefer large cheques to small ones, but they are also sensitive to other issues such as loyalty, creativity and commitment. In fact, both entry and access to the market are less onerous than at any time in the past. Digital technology has lowered book production costs, and the web offers a powerful and inexpensive mechanism for sales, marketing and distribution.

My bet is that the coming years will see a determined effort to re-populate the middle ground. A few, such as Bloomsbury and Faber, are already there. Others, such as Profile, Canongate and Atlantic, are on the way. These are tough independents who don't want to be swallowed by corporate whales. It will be interesting to see whether they, despite the huge imbalance in resources, can take market share from the leaders.

What I think is left out is that the publishers he's named as up-and-comers may be small, but they think big and most importantly, know how to partner with foreign rights and scouts to make their books available worldwide (like Canongate's massive project THE MYTHS, the launch titles being published simultaneously in 30 countries late last month.) There may be hope -- but obviously it takes a lot of hard work and determination to stay in that middle ground.