This presentation by Imke REIMERS, Associate Professor of Economics, Northeastern University, United States, was made during the discussion “Competition Issues in Books and E-Books” held at the 72nd meeting of the OECD Working Party No. 2 on Competition and Regulation on 29 November 2021. More papers and presentations on the topic can be found out at oe.cd/cbeb.

1. The Economics of
Book Publishing
Imke Reimers
Northeastern University
OECD Hearing on Competition Issues in Books and E-books
November 29, 2021

2. Book publishing in the digital age: demand
• Amazon’s Kindle e-reader was introduced in November 2008
• Apple’s iPad was introduced in April 2010
• Consequently:

3. Demand for physical and e-books over time
• The rise in e-book demand came to a halt (despite lower average prices)
0
200
400
600
800
1000
sales
in
millions
of
units
2005 2010 2015 2020
year
print books e-books all
• Possible explanations:
• Preferences for “holding
something in your hand”
• Ability to show off
• (Accordingly, large
differences across genres)
• Need for a
complementary device
(Source: Nielsen Bookscan/Statista)

4. Challenges due to digitization
• Piracy
• No evidence that piracy hurts physical book sales
• But some evidence that it hurts e-book sales
• Protection against piracy increases sales by ~10%
• Mass digitization efforts
• No evidence that such efforts hurt sales
• For public-domain works, they seem to increase physical sales
(based on unpublished work)
Digitized Not Digitized

5. Opportunities for consumers
Digitization provides access to much more information
• Consumer ratings can help consumers pick the books that they will like best
Log
sales
rank
effect

6. Book publishing in the digital age: supply
• Large decreases in marginal costs
• E-books can be distributed for free
• E-commerce also lowered costs of distributing physical books
• Changes in fixed costs are less obvious
• The cost of writing books has remained similar
• But reaching consumers has become easier
 Total editions (ISBNs) per year in the US:
• 2008: 561,000
• 2012: 2.35 million

7. 0
500
1000
1500
new
self-published
books
(in
1000s)
2010 2012 2014 2016 2018
year
print books e-books
Proliferation of new (self-published) products
• Number of new ISBNs from self-publishing platforms
(Sources: Bowker, “Self-Publishing in the United States, 2010-2015 Print vs. Ebook”
Bowker, “Self-Publishing in the United States, 2013-2018 Print and Ebooks”)
• Number of new books on Smashwords by genre

8. Opportunities for traditional publishers
• Book advances have started to reflect ex-post success more accurately
• Traditional publishers seem to invest more in better books, and less in worse books
Figure: Residuals from regressions of ex-post success on deal sizes (diff-in-diff)

9. Thank you!

10. References
• Waldfogel, Joel & Imke Reimers, “Storming the Gatekeepers: Digital Disintermediation in the Market for
Books,” Information Economics and Policy, 31 (2015): 47-58
• Reimers, Imke, “Can Private Copyright Protection be Effective? Evidence from Book Publishing,” Journal of
Law and Economics, 59.2 (2016): 411-440
• Nagaraj, Abhishek & Imke Reimers, “Digitization and the Market for Physical Works: Evidence from the
Google Books Project,” available at https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3339524
• Peukert, Christian & Imke Reimers, “Digitization, Prediction and Market Efficiency: Evidence from Book
Publishing Deals,” Management Science (forthcoming)
• Reimers, Imke & Joel Waldfogel, “Digitization and Pre-Purchase Information: The Causal and Welfare
Effects of Reviews and Crowd-Based Ratings,” American Economic Review, 111.6 (2021), 1944-71