Today's news comes out of Rice University, where it turns out their academic press is switching over to print-on-demand. The reason for the move? It saves them a ton of cash.
The print runs of academic titles are only fractions of the print runs of most commercial titles, so (generally speaking) academic publishers pay more per unit than commercial publishers do when having their books printed, bound, and shipped. This is for two reasons: first, there are a number of flat-rate costs (e.g. typesetting) that are unaffected by the number of copies produced, and are therefore diluted as as the size of the print run increases; second, many printers will offer better variable rates as print runs increase, so it may be disadvantageous for an academic publisher to produce print copies traditionally (as they'll either be forced to print more copies than they can sell or to produce relatively few copies at a high price). This is where POD comes to the rescue.
With POD, publishers only produce a copy of a text when it's requested; while this may not be feasible for high sales volume titles like Twilight, it's ideal for smaller titles (e.g. most academic titles or volumes of poetry). As the technology becomes better refined and the speed with which individual copies can be produced increases, it may become a more reasonable option for commercial midlist titles, as well. Not only would this save publishers the higher per-unit cost of publishing traditionally, but it avoids the high-cost tango of shipping and returns altogether.
While it seems to me that e-books are going to become a major force in the industry over the next decade or so, I'm certain of two things: one, people will still be attached to print in some capacity, and two, if this introduces a tiered print structure in which the megabestsellers are published traditionally and as e-books, then I think any non-electronic presence that smaller titles will have will have to be through some kind of print-on-demand setup.
What do you think, author-acquaintances? Will smaller-run titles be permanently relegated to the digital world, or will POD rescue them from print oblivion?