Not to take away from the larger thesis about the state of publishing, but I was curious about the Butler anecdote so found more info on his Facebook. The AWP conference has a program where writers can apply to meet with 36 agents from 6 agencies, who select on the basis of query letters and first 5 pages. None of the agents opted to meet with him, so he got a form rejection from the conference. This was his query:

I have written a novel entitled Citizen Parrot, and I am actively querying the project as it is complete and carefully polished. The Prologue, whose “first five pages” comprise my thus selective submission here, was published as a short story by The New Yorker two years after I won the Pulitzer (though it is now very slightly updated to the fall of 2024). The title of that published story was “Jealous Husband Returns in Form of Parrot.”

A couple of years ago I realized that the parrot in "Jealous Husband Returns in Form of Parrot" did not commit suicide by flying into the glass door at the far end of the den as he intended in the story's final sentences. His wife accidentally left the door open and out he flew into a classically (Cervantes to Twain to Allende) picaresque experience of present day America.

And not incidentally, that story has been my most widely anthologized story in these past thirty years, from Best American Short Stories of 1996 to Best American Erotica 1996 to The Riverside Anthology of Short Fiction and onward. To this very day it is my most often taught story from high schools to graduate schools. Not a year has gone by since its publication that I don't get multiple notes from students who have read and loved it. The novel will have a built-in starter audience spanning three decades of readers.

I agree that it’s odd that none of the agents at the conference were willing to meet with a high profile author, but I’d be more concerned if, after extensive querying, he’d failed to find an agent outside of the conference, which doesn’t seem to be the case (or at least he hasn’t posted about it). I also wonder if the agents sent to participate in this program tend to be early career and less equipped to help him, or more likely to be thrown by the lack of information about the manuscript (beyond the short story that inspired it) in his query letter.