Digitization and the Market for Physical Works: Evidence from the Google Books Project
American Economic Journal: Economic Policy (Forthcoming)
The free digital distribution of creative works could cannibalize
demand for physical versions, but it could also boost physical sales
by enabling consumers to discover the original work. We study the
impact of the Google Books digitization project on the market for
physical books. We find that digitization significantly boosts the demand for physical versions and provide evidence for the discovery
channel. Moreover, digitization allows independent publishers to
introduce new editions for existing books, further increasing sales.
Our results highlight the potential of free digital distribution to
strengthen the demand for and supply of physical products.