Analysis of the Potential Market for Out-of-Print eBooks

Abstract

The growth of the electronic book market has allowed publishers to make many previously out-of-print titles available, cost-effectively, in an electronic format. However, as of January 2012, there were still nearly 2,700,000 out-of-print titles that are unavailable as eBooks. The goal of this paper is to generate estimates of how much producer and consumer surplus could be created by making these out-of-print titles available in eBook markets.

To do this, we first collect a unique dataset, comprising a random sample of all out-of-print titles that are and that are not available in eBook markets. We then use Bayesian Propensity Score Matching techniques to match books in these two samples based on their observable characteristics. Using these matched titles, we estimate that making the remaining 2.7 million out-of-print books available as eBooks could create $740 million in revenue and $860 million in consumer surplus in the first year after their debut. We also estimate that $460 million of this revenue would accrue directly to publishers and authors as profit.

Keywords: eBooks, out-of-print books, copyright, propensity score, consumer surplus, Kindle