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The Impact of Ebook Distribution on Print Sales: Analysis of a Natural Experiment

26 Pages Posted: 29 Nov 2011 Last revised: 9 Sep 2016

Hailiang Chen

City University of Hong Kong - Department of Information Systems

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

Date Written: February 2016

Abstract

Digital distribution channels introduce many new strategic questions for the creative industries, notably how the use of new digital distribution channels will impact sales in established channels. We analyze this question in the context of ebook and hardcover sales by exploiting a natural experiment that exogenously delayed the release of a publisher’s new Kindle ebooks in April and May 2010. Using new books released in March and June 2010 as the control group, we find that delaying ebook availability results in a 43.4% decrease in ebook sales and no increase in print sales on Amazon.com or other retailers. We also find that the decrease in ebook sales is more severe for books with less pre-release buzz. Together our results suggest that consumers are strongly tied to their chosen consumption format and channel, meaning that delaying digital releases is unlikely to be effective at sustaining sales in established physical channels.

Keywords: Digital distribution, channel, publishing industry, natural experiment

Suggested Citation

Chen, Hailiang and Hu, Yu Jeffrey and Smith, Michael D., The Impact of Ebook Distribution on Print Sales: Analysis of a Natural Experiment (February 2016). Available at SSRN: https://ssrn.com/abstract=1966115 or http://dx.doi.org/10.2139/ssrn.1966115

Hailiang Chen

City University of Hong Kong - Department of Information Systems ( email )

Kowloon Tong
Hong Kong

HOME PAGE: http://www.cb.cityu.edu.hk/staff/hailchen/

Yu Jeffrey Hu

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Michael D. Smith (Contact Author)

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

HOME PAGE: http://www.heinz.cmu.edu/~mds

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