As an aside to the blog on lulu.com's business model below. HP are set to introduce a new service which takes it to the next step. Currently, when you purchase a DVD / CD from an online retailer your order goes through to the warehouse where it is "picked" and then shipped to you. This is a $35bn a year market and HP wants to help retailers improve their service and automate as much of the process as possible to increase sales.
So what are they doing?
They are introducing a service where instead of housing all those CD's / DVD's in a warehouse its stored on a large network storage device (a big hard disk drive) and can be pressed onto CD / DVD in real-time and have all the packaging printed, wrapped and then shipped directly.
This obviously opens up a huge cost saving for the manufacturers / retailers whilst also providing unique business models for a number of retailers. Imagine being able to personalise that DVD in some way. ie. You want the cover to have the name of the person you are purchasing it for on the front? or maybe the trailers are chosen from your Amazon recommendations and are therefore more likely to make you want to purchase additional DVD's?
A DVD / CD printed in batches of 1 open up some very powerful marketing activity.
Of course, there are businesses doing similar things already. ie. Moo.com will print business cards / mini cards with your flickr photo's on them and have them shipped to you in 5 business days for£9.99 (not much more than normal cards).
These businesses wouldn't exist without the power of the Internet and most consumers wouldn't even know the internet played a part except for the initial order.
This business model still has a long way to run :-) Watch this space.