Hey! This is what my start-up does, so I can talk about that a little bit.
The first thing to change about the business model is the focus. A lot of people who are enthusiastic about writers know two or three names of writers they follow, and that's it. Everything outside of that is an unknown to them. The first part of the solution is to focus people who are enthusiastic about writing in one place.
The next fix is to let writers release fast, iterate often, similar to hackers, and that means critique. You need to give them a good system for getting lots of feedback fast. The minute they start writing they should have access to feedback, even if they choose to finish a first draft before releasing anything and showing it to people. The better your revision access is, the less of a risk it is.
The final solution is to publish more writers, more incrementally. It means that you sift through a lot of short stories and poems and yes, even novels, if you're a publishing company, and you get back to everybody so that they can figure out how to get better. At the same time, you expand aggressively so that you can handle the incoming people as your model expands outward, and you keep the focus on quality publishing, just more of it.
Also, computer-based vocalization is horrible, and it will never replace audiobooks. I want Steven Colbert reading to me, not my Kindle.