I’ve written about this before and totally agree, but Joe puts it very well and expands on some of the points very clearly, excellent post, but worrying too:
The question is, which publisher gets the rights? Here the network effects of the Internet kick in. If an author or agent faced with multiple options must determine which publisher to work with, and the author realizes that there will be only one publisher, whose task it will be to serve a global market, then the choice will be to sign with the publisher best equipped to reach the widest market. If the print rights are part of the bargain, as they almost certainly will be, then the advantage goes to the publisher with the strongest print market. A few quick calculations leads the author to conclude that the best publisher — the single publisher for that book throughout the world — will be American or an international publisher such as Oxford University Press with a deep engagement with the Americn marketplace, as the U.S. book market is the world’s largest by far. Globalization and e-books thus extends the reach of all publishers, but not equally. The Internet is not a democracy.
Publishers that serve smaller markets, publishers working in Australia, India, even in the UK, increasingly will find themselves uncompetitive as the national trading barriers come down. This in turn will accelerate the acquisition of smaller publishers based outside the U.S.; those smaller publishers will become editorial units (one might say “be reduced to editorial units”) feeding locally-created products into the international digital publishing machine. Wal-Mart trounces Main Street.