Publisher’s distribution channel selection of print books in a book supply chain with print and e-books

This paper aims to exam the publisher’s online distribution strategies of print books between a reselling and a marketplace channel with the coexistence of e-book. This study extends the study of channel selection to the content products industry.

By constructing a publisher-leader Stackelberg game model, the authors investigate the publisher’s distribution strategies. The retailer holds a digital channel for e-book and reselling and marketplace channels for print books. The authors examine three-channel modes for the print book distribution: a pure reselling channel, a marketplace channel and a hybrid channel.

The results reveal that a hybrid channel always dominates a pure marketplace channel from the publisher’s perspective. Then, only when the print book’s margin cost and the marketplace’s slotting fee are not very high, the publisher prefers the hybrid to a pure reselling channel. The authors also found a Pareto zone where the hybrid channel mode improves publisher’s and retailer’s profits. Furthermore, the publisher is less likely to choose the hybrid channel as the acceptance of e-book increases. The authors also examine the situation where a publisher-authorized third-party distributor runs the marketplace channel and found the results still hold.

This paper fills a theoretical and practical gap for a structured analysis of the content providers’ online distribution channel selection of the physical products and digital products. Different from previous related studies, this study focuses on analyzing physical products’ channel strategies and finds physical products’ cost plays a crucial role in the content provider’s channel decision.