Should a self-publisher stick to just "hard copy" print-on-demand publishing of his books? Would adding Kindle, or hiring an "audio book" company, compete too much with the hard copy editions?
Hard copies sell for more money than either of the other two. But would the demand for the hard copy be less, so the financial bottom line is less? Would more hits on Kindle make up for revenue lost on less demand for the the hard copies?
Different readers prefer different formats. A significant proportion of readers who read ebooks don't buy printed books and vice versa. Print, ebook, and audiobook are different markets, and unless you are a famous author, readers aren't going to read your book in a format they don't like to use – they will buy another book instead. There are always more books in any format than anyone can ever read, so there is no need for readers to adopt a format that is uncomfortable for them. And it is likely they won't even notice your book at all, because they will be searching within their preferred market in the first place. On Audible you don't see any books that aren't available in audiobook format, and on Kindle you don't see books that have no ebook version. So you always should publish to all formats, if possible. The tools to create an ebook version are free.
Most people have a preferred media format. They either want physical copies, e-books, or audio books, and rarely have interest in other formats. And unlike a preference for softcover or hardback copies of a physical book, a preference for e-books or audio books rarely, if ever, has to do with cost. It’s almost always about either convenience or ease of reading. I’m a very good example of both aspects, I have a very strong preference for e-books over other media for two reasons. First, I travel regularly and I read a lot, so having the ability to carry just my phone instead of the 1200+ pages worth of novels I would typically go through on a (one-way) transatlantic flight is a huge benefit for me. Second, I have poor vision, and the mediocre printing on mediocre paper that is the norm for many novels is actually difficult for me to read, but using e-books lets me tweak the font, text size, and colors so that I have no issues at all.
People like me who prefer e-books will almost never buy a physical book unless we have a very compelling reason to do so. For me, this amounts to one of two cases, either I absolutely need the book in question for some reason (say, a textbook for a class I’m taking), or the content of the book is highly visual in nature instead of textual (think something like a repair manual with lots of diagrams). For some people it might include particularly wanting to read something by an author they already know and particularly like. Some may be willing to for a best-selling book that’s highly recommended. But essentially nobody who prefers e-books is going to buy a physical copy of a book from an author they’ve never heard of who is not exceptionally popular.
The same is largely true of audio books as well.
What this means is that offering these additional formats is going to get you more total copies sold than you would have otherwise, but it will almost certainly have little impact, if any, on the number of physical copies sold.
In addition to that, physical books sell for more because they’re more expensive to produce. Each individual physical book requires raw materials and time to make. But each copy of an e-book or audio book is essentially free to make once you have the original done, because copying the file itself is going to cost at most a few cents. In fact, the profit margin is better in most cases on e-books than they are on physical copies, and this is especially the case if you’re dealing with short print runs or print-to-order (printing is a quintessential example of an industry where economies of scale have a major impact).
So even if there is a decline in physical copies sold, it would likely need to be particularly significant for it to have a major impact on your net profit from sales, because the digital formats will earn more per copy sold than the physical ones.
I've written over a dozen technical books. Two published by household names in tech and the rest self-published. My current operating procedure for my self-published books is to let Amazon take care of physical and I do digital on my platform. Lesson number one for creators is to own your own platform (lest you get kicked off and you have all your eggs in one basket).
This has worked well for me. I have the emails for all digital sales and many of them are interested in my new books and purchase them immediately. I let them know that if they want the physical version, they can get it on Amazon.
It's not perfect. I have a lot of complaints from areas where Amazon isn't available, or that my color books are too expensive, but for 90% of my audience it works.
Income is NOT the same as profit
Your title question is based on a very simplistic (to the point of wrong) understanding of income streams.
Sure, "real" books sell for more than digital versions. But how much more are you actually getting from that higher cost-to-the-user? Because they need to also pay for printing, manufacturing, distribution, left-over copies, storage space and so on. [Yes, print-on-demand negates most of these but the massively lower efficiency of basically producing single copies for each sale still makes them expensive]
Digital media meanwhile has a miniscule fraction of that overhead so the net royalties to you from digital sales may be equal or even higher nonetheless.
Only relevant might be fear of piracy which is far lower if your medium never get's published digitally anywhere ever. But as a small time author I doubt that digital piracy would put a significant bump into your profits and if you ever become famous enough for it to matter, someone will digitize your books anyway.
