There was a very interesting article in Publishers' Weekly last week about the fact that historical romance is NOT dead, but alive and well. This is in big contrast to the 2005 article that proclaimed it dead.
Basically, I feel the interest in historicals is probably constant. Certain historical mixes have changed. For example, sweet traditional Regency is harder to find as Signet and Zebra closed their traditional Regency slots. Harlequin of course has continued to publish Regency and is doing very well with it. Avon also has done remarkably well with its historicals. Historicals are still hitting the bestseller lists and was one of the leading subgenres of bestselling romance.
Several things have probably happened. First, the mix of historicals changed. Second, when the number of publishing slots contracted, it is quite possible the quality went up.Also fewer publishing slots, but same amount of readers means the books that are left in theory sell more. Publishers see the increase in sales and the cycle starts over again.
Reading however is not a zero sum game. Simply because one genre is expanding , it does not mean that it is sucking readers from another genre. It simply means the quality of the writing in that genre is such that readers are responding to it.
The absolute best way to grow a genre? Keep the quality up.
Anyway, I am pleased that the quality of historical romance is starting to be recognised again. And the data is starting to trend upwards. There is a core of historical romance readers. I know. I am one of them.