Fantasy is a genre where most books are produced by a very few (big) publishing houses in the UK and USA. These are the houses that can afford to take the risk on large print runs because they have many other titles too. They produce a few fantasy titles (bad luck, authors) in big volume. Big volume is necessary for most kinds of book printing, but fantasy is the most critical, certainly within fiction.
Let's see why. I'm a fantasy fan. I won't buy a fantasy title unless it is (a) thicker than a doorstop (b) reasonably priced. I don't buy hardcovers or large format (expensive) paperbacks - I look for that small fat little book which opens up to a world where I can get lost for days and days. The fatter the better.
Mass-produced magic
So to sell, the fantasy book needs to be long, most often double or triple the length of the common novel. That means it costs almost three times the amount to produce. And yet, the average selling price for these books is very close to that of your mainstream fiction titles. So you've got a product which has a low selling price and a high cost price. The only way to get your cost per book down is to drive the size of the print run up. Short runs or on-demand printing just don't work when you've got a 650+ page book.
Mass markets mean lower prices
In a niche market (like non-fiction - Paragliding in South Africa) you could sell a book that thick for R350 ($50 or £24) because there is limited competition and the information has high value to a small number of people. In a mass market such as 'fiction', even 'fantasy fiction', there are so many wonderful books out there which your title will compete with, and they dictate the price - as set by the mass market paperback produced in masses. That's $15.99 or £7.99 thanks to Harper Collins, Penguin, et al. for the trade paperback, and even less for mass market format.
Print on Demand too costly
So you can get your book all made up via Print On Demand services like Lightning Source or Lulu, and still be out on the bench with a product that is 4 times the price of the competitors. I don't care how good your writing is, unless you can make me levitate in my chair I'm not going to buy your one sparkly title instead of FOUR of the top fantasy authors' new releases.
Low volume doesn't work
So I've just printed 5 000 copies of my fantasy novel (in the small South African market the mark of a 'Best Seller' is around 4 000 copies). Will they sell? Yes, I hope so, but that's not why I've printed so many. I've printed that volume because if I print less than that, then the books you buy through the bookstore, priced at current market values make me nothing. (Retail price minus bookshop markup, minus the markup of the distributor, delivery costs, development costs, printing costs, advertising, office, tax). Truly. I could print 2000 copies of the book, market my heart out, sell all of them through the bookstores and not even get my money back. I have to go big, or go home.
Would you bet your money on magic?
When faced with this kind of gamble, many publishing companies will decide to go for another kind of book. It may not be the quality of the writing they are rejecting, it's the risk in entering the market given the minimum efficient print run costs and the small unit returns. Unless they can see it selling by the tens of thousands, it just isn't worth it.
Thankfully there are a few publishers who are prepared to take a long shot, and you can bet most of them are fantasy fans. You have to believe in magic to make magic happen.
