How Consumers' Content Preference Affects Cannibalization: An Empirical Analysis on E-book Market

Despite the increasing popularity of e-books and the growing maturity of e-book markets, there have been few studies on the e-book channel and its influence on the existing paper book channel. In order to fill this gap in the literature, we investigate the extent to which e-book release boosts or cannibalizes demand for the paper book. Using unique data on the actual sales of paper books and e-books, we conduct an empirical analysis on this question. Our results without addressing selection bias suggest that the e-book release boosts the demand for the paper book. However, this effect disappears once we control for selection bias by using matching. We also find that the impact of ebook release is moderated by consumers’ content preference. Specifically, the e-book release increases paper book sales as well as total sales for those books with light contents that consumers prefer to consume through a digital channel. In contrast, the books that appeared on the bestseller lists experience significant demand cannibalization from e-book release.