When we think about digital's effect on storytelling, we tend to grasp for the lowest hanging fruits: words will move, pictures become movies, every story will be a choose-your-own-adventure. While digital does make all of this possible, these are the changes of least radical importance.
The biggest change is not in the form stories take but in the writing process. Digital media changes books by changing the nature of authorship. Stories no longer have to arrive fully actualised. On the simplest level, books can be pushed to e-readers in a Dickensian chapter-by-chapter format - as author Max Barry did with his latest book, Machine Man. Beyond that, authorship becomes a collaboration between writers and readers. Readers can edit and update stories, either passively in comments on blogs or actively via wiki-style interfaces. Authors can gauge reader interest as the story unfolds and decide whether certain narrative threads are worth exploring.