The Impact of Ebook Distribution on Print Sales: Analysis of a Natural Experiment
Yu Jeffrey Hu
Georgia Institute of Technology - Scheller College of Business
Michael D. Smith
Carnegie Mellon University - H. John Heinz III School of Public Policy and Management
April 30, 2013
Digital distribution channels introduce several new strategic questions for the creative industries. Two notable questions are (1) how will participation in digital channels impact physical sales, and (2) where should digital releases occur relative to existing “physical” release dates. These questions are particularly salient for book publishing where firms have expressed concern that making ebooks available alongside hardcover titles may cannibalize hardcover sales.
We analyze the impact of ebook availability on physical sales using a natural experiment that occurred between April and June 2010. Across all titles we find that delaying ebook availability results in a small (and statistically insignificant) increase in print sales and a large decrease in total ebook sales. However, we also find this effect is moderated by consumers’ brand awareness and digital channel preference: delaying Kindle availability for books with strong brand awareness and weak digital channel preference results in a statistically significant increase in print sales for those titles.
These results contribute to a growing academic literature analyzing the impact of digitization on marketing strategies in the media industries. Our results also highlight the usefulness of natural experiments derived from rapidly changing media distribution environments for identifying the impact of digital distribution channels on sales.
Number of Pages in PDF File: 38
Keywords: Digital distribution, channel substitution, publishing industry, natural experiment
Date posted: November 29, 2011 ; Last revised: June 9, 2014
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