Self-publishing is known as “vanity publishing” within the industry and is perhaps the dirtiest word and most cruel invective you can hurl at someone in the business.

But accord to the New York Times the glory days of self-publishing might just be ahead of us.

Booksellers, hobbled by the economic crisis, are struggling to lure readers. Almost all of the New York publishing houses are laying off editors and pinching pennies (just this month major SF imprint Del Rey has begun laying off staff). What few small bookstores survived the rise of the big box bookstore in the 1990s are now closing. Even the big chains are laying people off or exploring bankruptcy.

But things are looking up for self-publishing, especially in this era of easy digital print-on-demand technology. Gone are the days when self-publishing meant paying a printer to produce hundreds of copies that then languished in a garage. Companies that charge writers and photographers to publish are growing rapidly at a time when many mainstream publishers are losing ground.

As traditional publishers look to prune their booklists and rely increasingly on blockbuster best sellers, self-publishing companies are ramping up their title counts and making money on books that sell as few as five copies, in part because the author, rather than the publisher, pays for things like cover design and printing costs.

To be sure, self-publishing is still a fraction of the wider publishing industry. Author Solutions, for example, sold a total of 2.5 million copies last year. Little, Brown sold more than that many copies of Twilight by Stephenie Meyer just in the last two months of 2008.

But in an era when anyone can create a blog or post musings on Facebook or MySpace, people still seem to want the tangible validation of a printed book.

Now, for as little as $3, an author can upload a manuscript or collection of photos to a Web site, and order a printed book within an hour. Many books will appear for sale on Amazon.com or the Web site of Barnes & Noble; others are sold through the self-publishing companies’ Web sites. Authors and readers order subsequent copies as needed.

The self-publishing companies generally make their money either by charging author fees — which can range from $99 to $100,000 for a variety of services, including custom cover design and marketing and distribution to online retailers, or by taking a portion of book sales, or both.

For some authors, the appeal of self-publishing is that they can put their books on the market much faster than through traditional publishers.

Of course, authors who take this route also give up a lot. Not only do they receive no advance payments, but they also often must pay out of their own pockets before seeing a dime. They do not have the benefit of the marketing acumen of traditional publishers, and have diminished access to the vast bookstore distribution pipeline that big publishers can provide.

Still, many self-publishing companies allow authors to take more than the traditional royalty of 15 percent of the cover price on hardcovers and 10 percent or less on paperbacks.

For many self-published authors, the niche for their book is very small. Mr. Weiss of Author Solutions estimates that the average number of copies sold of titles published through one of its brands is just 150.

Indeed, said Robert Young, chief executive of Lulu Enterprises, based in Raleigh, N.C., a majority of the company’s titles are of little interest to anybody other than the authors and their families. “We have easily published the largest collection of bad poetry in the history of mankind,” Mr. Young said.

Still, the dream of many self-published authors is that they will be discovered by a mainstream publishing house — and it does happen, however rarely.

When Lisa Genova, a former consultant to pharmaceutical companies, wrote her first novel, “Still Alice,” a story about a woman with Alzheimer’s disease, she was turned down or ignored by 100 literary agents.

Ms. Genova paid $450 to iUniverse to publish the book and sold copies to independent bookstores. A fellow author discovered the book and introduced Ms. Genova to an agent, and she eventually sold “Still Alice” for a mid-six-figure advance to Pocket Books, an imprint of Simon & Schuster, which released a new edition this month. It had its debut on the New York Times trade paperback fiction best-seller list on Sunday, at No. 5.

Ms. Genova likened her experience to that of young bands or filmmakers using MySpace or YouTube to attract a following. “It’s really tough to break into the traditional model of doing things,” she said.

But keep this in mind: people like Lisa Genova are not only the exception, but their real success comes only after they are able to tap in to that existing, traditional publishing market. The reason Genova suddenly debuted on best-seller lists was not solely because of the quality of her work: it was due in part to a massive publicity, sales, and distribution machine at the control of Simon & Schuster. You’re never going to get that from a vanity publisher because they (by their own admission) don’t care about quality. They care about you paying them to produce a product for you. They care about volume of titles not the volume of those title’s sales.

Louise Burke, publisher of Pocket Books, said publishers now trawl for new material by looking at reader comments about self-published books sold online.

(Blogger’s aside: now, keep that point in mind. Later this week I’ll be posting about about a new venture that a publisher has engaged in to trawl the group-mind for that very thing…)

Diamonds in the rough, though, remain the outliers. “For every thousand titles that get self-published, maybe there’s two that should have been published,” said Cathy Langer, lead buyer for the Tattered Cover bookstores in Denver, who said she had been inundated by requests from self-published authors to sell their books. “People think that just because they’ve written something, there’s a market for it. It’s not true.”

I dunno. For me, this is all still vanity. Now, don’t get me wrong–there’s a certain necessary amount of vanity and hubris a writer needs to possess or else they wouldn’t be a writer. Remember, we get up every morning and believe that not only do we have something to say but that everyone is entitled to our opinion 🙂 But for me the real ‘validation’ of writing comes when you realize that other people who are utterly objective, who aren’t compelled or required by law, love, or friendship to pat you on the head and say how much they like what you wrote, and who are driven by that most unforgiving taskmaster–money–say they like your work.

A publisher who takes a financial risk on your work wouldn’t do so unless he believed it would sell. A reader won’t part with hard-earned money unless she believed she’d be entertained and moved by your work.

Of course I like what I write. I wouldn’t write it if I didn’t. But it’s a big step from me liking what I do and paying someone to print it for me, to someone else liking what I do and paying me for the privilege of publishing it.

I’ve worked in publishing as an acquisitions editor so I know first-hand how many submissions are received versus how many are actually published. I know how tough it is out there and all indications are that it’s getting tougher. But I still want to try. I think I can do it; I certainly hope that I can. But there’s no guarantee. I could very well spend the rest of my days a frustrated writer, toiling in obscurity, my friends sadder and sadder for me that I’m wasting my life chasing a dream (most writers wake up with this feeling, too, I think).

But vanity publishing? To soothe my own ego because I couldn’t hack it in the Big Leagues? I think I’d consider that a bigger failure.

– S.