Electronic books: To "e" or not to "e"? A strategic analysis of distribution channel choices of publishers

Guowei Hua, Edwin Tai Chiu Cheng, Shouyang Wang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

28 Citations (Scopus)

Abstract

The advent of electronic books (e-books) has significantly impacted the publishing industry in recent years. The prevalence of e-books has prompted many publishers to reconsider their distribution channels for new titles. They need to decide whether to sell the e-book version of new titles. We derive the conditions under which a publisher should sell only printed books (p-books), only e-books, and both of them simultaneously. We analyze the impact of reader acceptance of e-book and the wholesale price of the counterpart p-book on the distribution channel choice of the publisher under stochastic demand. We find that only if wholesale price of p-book is high and reader acceptance of e-book is low should the publisher sell only p-books; otherwise, he should sell e-books, even when reader acceptance of e-book is low, i.e., in most cases the publisher should sell e-books (perhaps selling p-books simultaneously). In general, the higher the reader acceptance of e-book is, the more the publisher tends to sell the e-book to readers directly. However, our analysis also shows that even when reader acceptance of e-book is very high, the publisher does not necessarily sell only e-books. The wholesale price reflects the publisher's power of negotiation over bookstores. The higher the publisher's power of negotiation over bookstores is, the more he is inclined to sell p-books; and when reader acceptance of e-book is relatively high, the lower the publisher's power of negotiation is, the more he tends to sell only e-books.
Original languageEnglish
Pages (from-to)338-346
Number of pages9
JournalInternational Journal of Production Economics
Volume129
Issue number2
DOIs
Publication statusPublished - 1 Feb 2011

Keywords

  • Distribution channel
  • Information goods
  • Newsvendor model
  • Supply chain management

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Cite this