This week's Economist reports on the rising of print-on-demand technology:

About 6% of books in America are now printed on toner-based or inkjet machines—a rough proxy for print-on-demand (POD)—as opposed to on offset presses, estimates InterQuest, a market-research firm. Over the next five years, it predicts, this figure will increase to 15%. In 2008, the latest year for which data are available, about 285,000 titles were printed on demand or in short runs—132% more than in 2007 and for the first time more than in the conventional way. Amazon, the world’s biggest online bookseller, uses POD machines, although it does not reveal how often.

They also report print-on-demand has been a boon for niche publishers like Cambridge University Press. About 10% of the publisher's sales now come from POD books, up from 3% five years. Books that were taken out of print because demand was too low can now continue to be sold.

The industry's scorecard:

All this makes it difficult to predict POD’s impact on publishing’s supply chain, which is already in upheaval, mainly because of the internet. Readers should benefit from the greater variety. More authors will get published, for instance, but there will also be more competition. Publishers may save money, but they may also lose their role as gatekeepers. The losers are easier to determine: used-book sellers, logistics firms and, of course, the makers of offset-printing equipment.

This article doesn't provide any costs, but one copy of a 200-page, 6"x9" paperback costs $8.50 at Lulu. Using offset printing, the same book would cost $1.50 but the production run would need to be a couple thousand units. POD costs are going to continue to drop making it more attractive for larger quantities, allowing publishers to reduce waste and better match supply to demand.