"Today is the day of the novel. In no other day and by no other vehicle is contemporaneous life so adequately expressed; and the critics of the twenty-second century, reviewing our times, striving to reconstruct our civilization, will look not to the painters, not to the architects nor dramatists, but to the novelists to find our idiosyncrasy.
"I think this is true. [...] There is no doubt the novel will in time 'go out' of popular favour as irrevocably as the long poem has gone, and for the reason that it is no longer the right mode of expression." [for the full text of the collection visit: http://www.archive.org/details/responsibilities00norriala]
Certainly, the novel is facing its greatest threat since Norris first declared it his choice genre of the American century. The economy threatens to freeze the publishing industry. Money to acquire and market novelists is drying up, editors are being laid off and the survivors are asked to do more work they don't have time for. Authors face shrinking advances and lower royalties thanks to fewer booksales (given the choice between groceries and books, people tend to pick groceries. Unless they are in graduate school and can live on Ramen noodles.)
The shift from print material to digital material has rapidly begun with the development of e-readers, Google's great book scanning project, and the growing sophistication of web developers and web users. The economy has pressured the industry to embrace this untested arena faster than anyone expected. Web-only journals have done some initial work, managing to spread quickly thanks to lower operating costs and the satisfaction of near-instant publication. (The time it takes to respond to stories has decreased thanks to online submissions, but reading a 5,000 word story still seems to take the same amount of time.)
It's possible the short story will have a stronger presence as web-publishing gets sorted out. But the printed novel faces a the kind of marginalization that poetry currently suffers. The printed readership will decrease, albeit slower than proponents of online reading will suggest since novelists will continue to work in the medium. It will take a few commercially viable web-novelists to help convince casual readers to get on board. (Stephen King has already tried, if I'm not mistaken.) While there will always be an argument for the portability and low-cost of mass market books (who wants to take their e-book to the beach or risk leaving it behind on the subway?), the tech-savvy members of current and upcoming generations will celebrate the advantages of e-readers.
The serial publication may be the best way to encourage online or e-book reading. It certainly worked with early novels in England and in the 19th century, though the initial reason was due more to the limitation of printing and the amount of money people had to spend on books. The growth in storyline continuity since the 1990s in television suggests a greater openness to serial publishing. Daytime soap operas and comic books have used this stategy for decades. Serial films, too, tapped into an audiences desire for a perpetual storyline.
Writers can use this strategy to lure their readers in with monthly or bi-weekly chapters or short stories. And, while the hypertext revolution didn't immediately catch on with readers, writers who become/work with webpage designers have the option to lure readers/surfers in and get them to spend an hour or more exploring a story on a website -- creating a new form where the once unseen material becomes accessbile or visual material enhances the reader's understanding of the story. Think of it as a director's cut or a special-features online novel where character sketches, alternate endings, character journals, etc. give the reader a fuller experience. Aside from that approach, a novelist could easily create a graphic-novel world with visual and audio elements that correspond with the text. The footnotes of David Foster Wallace would seem quaint or groundbreaking in this world. (For some idea of the potential of the website-as-novel, consider sites that allow readers to follow rabbit holes in the text like some older iterations of the band website Radiohead.com or the site for the film Donnie Darko). The phrase getting lost in a book can easily become getting lost in a webpage-novel.
In this setup, publishers would still have plenty of revenue opportunities (and thus writers would still get paid for their labor). Imagine reading a book that has a musical reference and being able to play the song along with the scene? Or go off to buy the song? Imagine a publisher with 4 authors -- each author publishes a new chapter each week on the website. (or 30 authors, each publishing a chapter a day!) Readers could pay for access to the entire site or the specific author's work. Want to download to an e-book reader? It's no harder than downloading from iTunes or the Amazon MP3 store. Maybe there's a fee or maybe it's included in the website membership. I'll leave the captilism to the experts, but the novelist would not have to fear a complete loss of financial stability because of the change.
The greatest change might be to the reading experience, and not necessarily the composition. The internet doesn't encourage long reading periods both because of the physical limitation of reading things onscreen as well as the lack of interest people might have spending time online after working on a computer all day. True, printed novels are only slightly easier on the eyes, and if you've ever sat in bed reading a long novel all day you know that the neck, the hands, and elbows all ache. But the technological aspect of reading, along with the physical connection so many readers love to have with their novels, will change no matter what. The price of printing, the environmental impact of so much paper used (and so much wasted), the price of storage, etc. mean that reading digitally will become the norm regardless of the merits of the printed novel.
Publishing is going to become digital. The initial generation of writers who have access to more sophisticated technology and online distribution will try very hard to push the "novel" forward. We may see monstrocities that don't deserve our reading time. There will be pieces that later readers will say was "ahead of its time." There may even be a few commercially successful books (if publishers can convince already-proven writers to given online writing a shot and not simply paste a novel on a website.)
Frank Norris (among others) will be both right and wrong. The novel as a printed object will go out of favor. But the novel as a genre, a form, will carry on. If the novel, at its core, is a detailed story involving characters and conflict, subplots, related scenes, cause and effect, and the moral obsessions of all art, then it will be the manifestation of the genre that goes out of favor, not the novel form itself. Like the long, narrative poem, the printed novel will become an artifact, making way for a different (not necessarily better or worse) form. Most assuredly, what we'll see online will not resemble the books that line my well-stocked IKEA bookshelves. What I read onscreen or download to some device will still be called a novel, but it won't resemble its printed cousin closely, just as e.e. cummings and The Odyssey are both related but vastly different.
Still, as long as there is a story and character and sentences that make the hairs on my arms prickle with electricity, I'll be happy.
EDIT: Found this on Endgadget today: http://www.engadget.com/2009/02/03/v-books-the-future/