THE YEAR 2029
In the year 2029, the power of wireless Internet, Amazon, and Google (among newer and even more fantastic companies and services) will have taken connectivity to a new level. We could have search engines in our contact lenses, people! True, video or Matrix-style virtual reality may have largely replaced today's text-based Internet by then, but I'm betting there will still be text involved, and therefore (drumroll, please): reading!
Google's and Amazon's Sith-level grips on electronic books may well still be holding (fun activity: which is the master and which is the apprentice?), meaning that between them, a huge and continuously growing volume of e-books will be available on-line. Mix that with paper-thin, flexible, full-color e-readers (or those mega sweet contact lenses I just mentioned) and you've got almost any book you could ever hope to read wirelessly available almost instantly.
Will piracy be a problem? Absolutely—in twenty years, I expect the publishing industry to be suffering the same issues as the music industry in terms of illegal downloads and pirated materials. Ninja DRM and lawsuits from publishers/copyright holders/author estates will hopefully be enough to deter some pirates, but certainly not all.
Now, as we have seen, there are always going to be early adopters, late adopters, and non-adopters of new technologies, meaning that there will probably still be folks reading paper books in the far-flung year of 2029. I'm pretty sure that's going to be those of us who are college-age or older now, since we have a significant attachment to print books. But those three-year-olds you see running around now? They'll be fresh college graduates with almost no knowledge of The World Before E-Books. They saw us using e-readers when they were tots and thought they were cool. They probably got their own e-readers in middle school. Heck, they might not have ever even touched a physical book in all four years of college. Sure, a few young fogeys might think "p-books" are cool and retro or whatever, but most will view them as archaic and hard to use. (There's no search function on a paperback.)
I think hardcover books will swiftly become novelties, so only a few very small publishers will continue to produce them. For those of us who actually want to read physical books, POD will likely have become the norm, since dwindling demand will long since have forced houses and booksellers to abandon the current mega-print-run-and-returns model. If you want a physical book, you order it, it gets printed just for you, and that's that.
The good news for publishers and agents: I still think we'll need you in the astoundingly distant year of 2029! Roles will have changed drastically, though. Agents will be needed to negotiate royalties & contracts, filter out the detritus, and scout out the self-published stuff that's actually good; publishers will be needed to provide editing, marketing, and publicity services (viral media blitzes and e-co-op, if you will). The industry will be generally more compact, but will still exist and, hopefully, be thriving.
Oh, and I almost forgot the best part: in 2029, all you author folk will be making six-figure advances! Hooray for inflation!