The article Publishing Renaissance by Allison Randal, over at the O'Reilly Radar, is a fascinating read. She describes how her press was able to publish its first book — helpfully, she gives actual numbers:
Print-on-demand technology allows individual books to be printed as they're ordered, and shipped directly to the purchaser. The technology has developed to the point that the quality of a print-on-demand book is equal to the quality of a traditional printed book. This style of publishing is cheap. You generally pay a small set up fee, and then have no other expenses until the book actually sells, and then only pay for the printing. (The printing cost is about $1 per copy higher than a traditional printer at high volume, and cheaper than a traditional printer at low volume.) It cost me well under my goal of $1k to produce Gravitas from start to finish. With all this power at their fingertips, publishers could experiment much more freely with low risk.
She's very clear on the point that the advantages publishers bring are in marketing and distribution. She also remarks on the larger pattern here:
We're already seeing a democratization of online media, where blogs and wikis grow to be more frequent sources of information than "professional" media companies. It's good to see a similar process in more durable media.
Further evidence, I think, that the separation of creation from distribution is really beginning to settle in...