This article from Slate by Jill Priluck is a good primer on how small, indie presses are well positioned to benefit from digital publishing. It's a little remedial when you think about it, but the crux of the argument is that lower production and distribution costs lessen the burden on already shoestring indie budgets. But the real key that Priluck does a good job of pointing out is how small presses can better utilize word-of-mouth and social media online than the 800-pound publishing gorillas can because of their personal ties to their readers:
In the little-guy economy, the personal wins. In this way, indie publishing is no different from the start-up world. "There's a premium on the individual. Getting an e-mail from somebody who says, 'Hey, check this out,' means a lot more to the recipient than spam from the Random House publicity department," said Richard Nash, formerly of Soft Skull Press and founder of Cursor, a portfolio of digital publishing communities that launches next year.