Morten Hviid, Sabine Jacques, and Sofia Izquierdo Sanches
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.