From publishers to self-publishing: The disruptive effects of digitalisation on the book industry

Authors : Morten Hviid, Sabine Jacques, Sofia Izquierdo Sanchez

This paper explores the structure of the book publishing industry post-digitalisation. We argue that the introduction of successful e-book readers has belatedly given digitalisation the characteristics of a disruptive technology by making self-publishing a serious option for authors.

This has been supported by the entry of new types of intermediaries and the
strengthening of others. These changes have reduced the overall complexities for an author to get a book self-published.

As a result, a larger share of the surplus from the book industry is likely going to authors, explaining the significant increase in the supply of books. The potential over-supply of books has created a new problem by making consumer search more difficult.

We argue that digitalisation has shifted the potential market failure from inadequate supply of books to asymmetric information about quality.

It remains to be seen whether the market will provide appropriate intermediaries to solve the associated asymmetric information problem and, if not, what appropriate interventions should be contemplated.


Estimating the Economic Impact of Mass D…

Estimating the Economic Impact of Mass Digitization Projects on Copyright Holders: Evidence from the Google Book Search Litigation :
« Google Book Search (GBS) has captured the attention of many commentators and government officials, but even as they vigorously debate its legality, few of them have marshaled new facts to estimate its likely effects on publishing and other information markets. This Article challenges the conventional wisdom propounded by the U.S. and German governments, as well as Microsoft and other competitors of Google, concerning the likely economic impact of mass book-digitization projects. Originally advanced by publishing industry lobbying groups, the prevailing account of mass book-digitization projects is that they will devastate authors and publishers, just as Napster and its heirs have supposedly devastated musicians and music labels. Using the impact of GBS on the revenues and operating incomes of U.S. publishers believing themselves to be the most-affected by it, this Article finds no evidence of a negative impact upon them. To the contrary, it provides some evidence of a positive impact, and proposes further empirical research to identify the mechanisms of digitization’s economic impact.
The debate surrounding the GBS settlement is important to students, writers, researchers, and the general public, as it may decide whether a federal appellate court or even the U.S. Supreme Court allows the best research tool ever designed to survive. If the theory of Microsoft and some publishing trade associations is accepted, the courts may enjoin and destroy GBS, just as Napster was shut down a decade ago.
The Article aims at a preliminary estimate of the economic impact of mass digitization projects, using GBS as a case in point. It finds little support for the much-discussed hypothesis of the Association of American Publishers and Google’s competitors that the mass digitization of major U.S. libraries will reduce the revenues and profits of the most-affected publishers. In fact, the revenues and profits of the publishers who believe themselves to be most aggrieved by GBS, as measured by their willingness to file suit against Google for copyright infringement, increased at a faster rate after the project began, as compared to before its commencement. The rate of growth by publishers most affected by GBS is greater than the growth of the overall U.S. economy or of retail sales. Thus, the very publishers that have sued Google have seen their revenues grow faster than retail sales or the U.S. economy as a whole (measured by gross domestic product). This finding parallels some of the research that has been done since the Napster case on the economic impact of peer-to-peer file sharing on sales of recorded music. Future studies may provide a more granular estimate of the economic impact of frequent downloads or displays of pages of particular books on the sales of such books. »