Recommendation engines are real and are improving. Spellcheck fixes typos and some decent neural-network training can be pushed into literary land (already MS Word "dares" here and there, and that's not even centralized). Would a "digital editor" be foolproof, or particularly good? No, but it would likely do a lot of the grunt work fairly reliably, so you can shrink the workforce or increase output (more books, argh). When I hear of the "slush pile", I cringe. That's a job for a machine and not a very smart one at that.
> Netflix and Amazon are studios
No, they are content distributors who happen to produce content because of supply failures up the chain. The middlemen upstream are failing to see opportunities, so downstream is taking charge. The minute this changes, they will go back to being content distributors because that's what they do.