Perhaps I merely missed it, but what is your stance on a fully-realized PDF of a work as opposed to a manuscript.
Initially, I queried and sent out manuscripts as it has always been done. Now I am finding it hard to justify this antiquated process when I can format it as I wish and send a finished E-book PDF.
If the work is rejected, then I can go right to POD or something similar. Is this flawed logic? I have two novellas in the final stages and have to prepare myself.
I'm not sure the question that's being asked here, so I'll just ramble for a while and see where it takes us and how much trouble it gets me into.
From what I can gather, you submitted a normal manuscript and it was rejected, so now you are considering publishing it independently as an E-Book. (Whether it's in .pdf or .cbr or any other format is irrelevant, except when it comes to reading the book on iPods and whatnot)
I don't know a lot about publishers who work exclusively on E-Books, for two reasons. One, most major publishing houses now have their own ways of putting out E-Books if they think it's commercially viable for a product they already own and they normally include something about that in their contract, about rights and royalties and stuff. Two, I've never in my life purchased an E-Book. I've downloaded books in .txt format, but that's mainly been for research purposes (quote searches and the like). I've never actually sat down and read a novel on a computer screen, except when I had to at work, or when it's fanfic. I prefer things that I can hold in my hand and don't hurt my eyes after hours and hours. Stan Lee put it best when he said, "Computers will never replace the experience of holding a comic book in your hand and reading it." Of course, he was talking about comic books. And he was not anticipating Comic Book Reader, which really does make them readable on a screen.
There's not a lot of money or publicity in E-Books, though it is a growing market. Major publishers generally don't put out their regular books as E-Books unless there's a reason because the material can be so readily distributed illegally.
If you're looking at it like E-Book is a step below normal publishing and a step above POD publishing, I would say you are wrong. E-Books are really their own market, a market that's so rapidly changing that I don't really keep track of it and it usually doesn't show up on my radar. (By the way, it's a bad sign when a type of book doesn't show up on my radar)
Now getting into the larger question of whether you should go ahead with your manuscript in other publishing forms - the publishing industry answer is, "Uh, if you want to, but if we rejected it across the board, it probably sucked. Go write a better book instead." If you come and tell me that every single agent you queried didn't request a partial, I would say something was wrong with your query letter. If you say you got some hits but nobody took you on as a client, you've got something wrong with your manuscript.
There are reasons to publish POD. If you want to just have your book in print for friends and maybe some people who'll find it online and be interested, and you don't want to deal with the publishing industry or the hassle of receiving profits from your work, go ahead. If you've written poetry and it hasn't won a Pulitzer, go ahead, because we won't publish it anyway. But if you've written a novel that you actually want massive amounts of peope to read - say, more than 100 - then you should stick with traditional publishing.
Of course, this is coming from the assistant to an agent who wouldn't dream of sending her clients to a POD publisher. This is also coming from a grad student who sat in line during registration today and listened to people go on and on about how they were just going straight to POD and then build a huge following via the internet because the INTERNET can do ANYTHING and you should definitely not listen to the person behind you in line who actually works in publishing and is telling you that the chances of you actually having a successful POD book is almost nil. Yeah, yeah, Amazon.com is great. We all love it. You know what I don't like? Buying paperbacks of shitty quality with bad covers, no editing, poor formatting, and cost me $20.00. Thanks, iUniverse.
If you are being rejected across the board by traditional publishing when you've written a traditional manuscript - not the two novellas you discuss later in your letter - then yes, you can consider POD or E-Book. Or you could maybe question how good your manuscript was in the first place to be rejected by everyone across the board.