Heterogeneous Effects of Ebook Distribution on Print Sales: The Role of Distribution Strategies and Book Characteristics

24 Pages Posted: 8 Apr 2020 Last revised: 13 Jun 2021

See all articles by Kyunghee Lee

Kyunghee Lee

Wayne State University - Mike Ilitch School of Business

Kunsoo Han

McGill University

Byungtae Lee

affiliation not provided to SSRN

Date Written: March 23, 2020

Abstract

Due to the increasing significance of ebooks and concerns regarding their potential cannibalization effect, prior research has examined the impact of ebook distribution on print sales. However, the primary focus has been on estimating the overall average effect of ebook availability; therefore, we still have a limited understanding of the factors that can explain the heterogeneity in ebook effects. As a result, little guidance has been offered to publishers in terms of how they can minimize the cannibalization effect of ebooks and maximize the combined profits from digital and print channels. This study aims to extend the literature and offer insights and actionable guidance to managers in publishing industries by examining the moderating role of both supply-side and demand-side factors in ebook effects. Specifically, we address the following research questions: (1) Do ebook distribution strategies (i.e., ebook discount rates and delays in ebook releases) affect the degree of cannibalization of print sales by ebooks? (2) Do book characteristics pertaining to portability benefits (i.e., book size and reading time) affect the degree of cannibalization? By employing a synthetic control approach to analyze actual book sales data, we find that ebook releases led to a 10.7% reduction in print sales over the eight-week estimation period. More importantly, the results suggest that (1) a higher discount rate for an ebook has no statistically significant impact on the degree of cannibalization, while delaying ebook releases mitigates the cannibalization effect; and (2) books with a longer reading time tend to experience more severe cannibalization, whereas the book size (i.e., number of pages) does not influence the degree of cannibalization. Our findings are robust to a series of sensitivity analyses. The contributions and managerial implications of these findings are discussed.

Keywords: ebook, channel competition, cannibalization, digital distribution strategy, multichannel strategy, synthetic control

Suggested Citation

Lee, Kyunghee and Han, Kunsoo and Lee, Byungtae, Heterogeneous Effects of Ebook Distribution on Print Sales: The Role of Distribution Strategies and Book Characteristics (March 23, 2020). Available at SSRN: https://ssrn.com/abstract=3559782 or http://dx.doi.org/10.2139/ssrn.3559782

Kyunghee Lee (Contact Author)

Wayne State University - Mike Ilitch School of Business ( email )

5201 Cass Avenue
Detroit, MI 48202

Kunsoo Han

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada

Byungtae Lee

affiliation not provided to SSRN

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