Ten years ago I owned a stationery store which was next to a printer. I had written a book, more to tell an interesting story than anything else, went through the query/agent/rejection route, then decided to simply use my HP laser and print the book myself. The printer bound it with a plastic comb, the cover was red card stock with black print. They cost me about $10 a "book" and I sold them at my store. Ta Da, the very "first" Print on Demand was born! This was long before I knew anything about ISBNs and bar codes, or the book biz.
Soon after, AOL formed an on-line writers club. For $350, they would put a book through the proper process so that we could actuality sell them in bookstores. Pretty cool. Had a customer create the graphic art for the cover and the "book" was born.
A few months later, iUniverse bought out the writer's club. They told us they had an exclusive contract with Barnes and Noble and if we signed with them, our books would be stocked in all their stores. Even more cool! At that time, iUniverse and Xlibris and I believe 2Excel were the only POD companies. Originally for author's of out of print books to be able to "re-publish" manuscripts.
Then, iUniverse started advertising that "For $99 YOU can be a published author". Soon after, bookstores were being flooded by newly "published authors" who wanted to see their books on the shelves and arrange book signings. But these authors never bothered to do any real marketing, most of the people who would come to their events never bought a thing. The bookstores then pretty much refused to put POD titles on their shelves. Then Amazon changed the face of book buying forever. The rest you pretty much know.
Both of my books were picked up by a small independent publisher who didn't charge me anything, as it should be. However, he did use the POD printing process. VERY different from the tag "Self-published" author. I did several book signings in stored in the L.A. and NY area, but times have changed a great deal since then.
Recently, my first book "Red Wine For Breakfast" is in it's FIFTH incarnation. With a new small press, Chalet, and a slightly new cover. I did go with a POD for my non-fiction memoir: Blood Tastes Lousy With Scotch, because there were a lot of scanned court documents and the story of guardianship abuse in Florida had to be told.
Now that there are dozens of POD companies out there, authors are once again being tagged with that "self-published" line. I've also discovered that the general reading audience doesn't care who or how the books are published there is a good story between the covers.
Writers will always find a way to get their stories out there. POD was both a good thing, and a bad. When "anyone" can be a published author, and not have to go through an agent, editor, publisher "traditional" route to get there, that certainly gives the reading public far more choices, but it also limits the authors ability to sell more books to that audience, because the reader now has so many choices. However, people still go into bookstores and the shelves are still stocked with books. The business may be shrinking, but somehow I doubt it will disappear forever, at least not for a few generations.
Best sellers are not necessarily written as much as they are hyped, marketed and publicized. POD was an "electronic revolution", now we all have to wait and see where this new publishing world takes us.