from Read Write Blog:
Bits Of Destruction Hit the Book Publishing Business: Part 1:

The Three Big Waves Hitting the Industry

One massive wave crashing down is confusing enough. But when three crash at the same time, even seeing what's going on (let alone predicting how things will play out) becomes really difficult. These three big new waves are:

1. The digitization of print books by Google Book Search.
2. Increasing consumer acceptance of e-books, mostly because of the Kindle.
3. Print on demand.. . .
   

Wave #3: Print on Demand

Not everybody wants to pay $359 for a Kindle, particularly when e-books for it are not significantly cheaper than print versions. Also, most books are not yet available on the Kindle, and many (for example, ones with a lot of high-quality images) are not suitable for the device (at least not the current version).

This is where the third wave, print on demand (POD), comes in.

While printing single copies of books using traditional technology such as letterpress and offset printing was simply never economical, digital printing technology now makes it possible.

POD caters to the new long tail: new books that are not best-sellers. Authors go through one of the POD intermediaries: Lulu and Blurb.

In simple terms, the intermediaries allow you, the author, to sell books one at a time. (You could give your book away for free, but you would still have to pay Lulu or Blurb for printing costs.) The model requires no up-front cost from you and no minimum purchase from the reader. Your print-ready content goes to Lulu or Blurb's printing partners, which print and send the books to readers. The printers are willing to work with these intermediaries because they aggregate demand.

You, the reader, see no difference. You order online, pay by credit card or PayPal, and get the book delivered to your home or office.

This initially caught on in the self-publishing and vanity publishing industry, where books often had no market beyond the author's immediate circle of friends, family, and associates. For a good breakdown of the types of publishers in this industry and what to look out for, see this article.

A lot of publishers specialize in this area, including Epigraph, Xlibris, I-Universe, AuthorHouse, SelfPublishing.com, and BookSurge. But they typically require a minimum order, albeit a small one. Blurb and Lulu have used the Web to take this idea to its extreme: no up-front costs, and books printed one order at a time.