Of course some of this is due to pressure by the big corporations that bought up the publishers. That means that people who don't know how the book industry works are making a lot of the decisions. Which is ... well, if not precisely crazy, at least short-sighted. But executives at big corporations are often short-sighted. They are only looking as far ahead as their next bonus.
But, yes, it is terrifying if you are looking to make a career as an author. That doesn't mean, of course, that there aren't plenty of authors who do succeed. However, for new authors the old motto "don't quit your day job" is more true than ever. No one should quit their job just because they've sold a book and it is doing reasonably well. Except for a very popular series, each book could be the last.
But, yes, it is terrifying if you are looking to make a career as an author. That doesn't mean, of course, that there aren't plenty of authors who do succeed. However, for new authors the old motto "don't quit your day job" is more true than ever. No one should quit their job just because they've sold a book and it is doing reasonably well. Except for a very popular series, each book could be the last.