Self Publishing

I came across this website: lulu.com where one can upload their writing, design a book cover, and start selling their own book instantly, without years of publishers reading manuscripts and saying "no thank you" before getting a break. I'm naturally skeptical, as this process bypasses the normal publishing and distribution system. I was taught that consumers view their time, not their money, as their most valuable resource - so they won't sit through the consumption of things they don't enjoy (movies, books, concerts). For this reason, we have gatekeepers - experts in respective fields that produce movies, books, etc, that say red light, green light, on projects depending on their quality and potential to sell well. (Though keeping in mind, "nobody knows," via Rushton and Caves, which is why we have flops sometimes.) Gatekeepers help weed out lesser quality projects from reaching the public, and make it easier for average consumers to find things they enjoy, without having to sort through every artist in a field themselves.

That said, gatekeepers became less important in the music industry, when homegrown bands started uploading their music on the web, sharing it, and experiencing success by the popularity democratically gained. Record labels are still useful, however, for marketing and distribution, and assumption of risk, but the way something becomes popular has definitely changed. I wonder if this could happen next with books. Lulu does rank top sellers right on their front page, so you can buy what other people buy - generally a good indicator you might like something. I guess the question would be, is are major book publishers paying attention? Are they cruising for their next bestselling author on these sites? (And if they bite, does it decrease their risk, because they have evidence this writer is already somewhat popular?) Or will they continue to read manuscripts and find their authors and take risk in the usual way?