The eternal whine of editors, agents and others whose business has them dealing with aspiring writers (usually, dealing with them as little as they can possibly get away with) is that there are more people writing books than reading them, and trying to sell them than buying them.
Of course, this is just a whine. But it does seem plausible that the ratio of would-be writers to would-be readers has shifted dramatically in the direction of more writers and less readers this past century, and especially these past few decades.
Not long ago I suggested two reasons for this:
1. People are reading much, much less, preferring other media for their entertainment.
2. Even sticking with the strictly legal they have more, and more convenient, options for accessing reading material totally free than ever before, from everything ever published up to the early twentieth century on Gutenberg (thank you public domain!), to self-published fiction on sites like Wattpad and Inkitt.
However, I think there is a third reason worth adding, namely that a great many people whose creative inclinations have little to do with fiction as such are writing short stories, novellas, etc., because this is easier than working in the medium they really want to be working in. Fan fiction is an obvious case. (They might prefer to make a Harry Potter fan film--but settle for writing a story instead because they lack the needed resources.) Still, it is not the only case. (Your chances of seeing your idea for a big-budget action movie come to $300 million life on the big screen are so slight that even traditional publishing looks plausible by comparison--and so what might have been a screenplay is rendered as a novel instead.)
Of course, such material has had its audience, but it is a residue of excitement over other media, and for the creator second-best, while perhaps not even that for the audience. While the frustrated filmmaker is so driven to create that they will do so in another medium when their first choice is unavailable, the audience does not necessarily share the impulse--especially with so much other such content out there, skewing the ratio of creator to audience again.
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