iphone or Kindle: Competition of Electronic Books Sales

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1 Assoiation fo Infomation Systems AIS Eletoni Libay (AISeL) AMCIS 009 Poeedings Ameias Confeene on Infomation Systems (AMCIS) 009 iphone o Kindle: Cometition of Eletoni Books Sales Li Univesity of Connetiut, lhen@business.uonn.edu Follow this and additional woks at: htt://aisel.aisnet.og/amis009 Reommended Citation, Li, "iphone o Kindle: Cometition of Eletoni Books Sales" (009). AMCIS 009 Poeedings. 58. htt://aisel.aisnet.og/amis009/58 This mateial is bought to you by the Ameias Confeene on Infomation Systems (AMCIS) at AIS Eletoni Libay (AISeL). It has been aeted fo inlusion in AMCIS 009 Poeedings by an authoized administato of AIS Eletoni Libay (AISeL). Fo moe infomation, lease ontat elibay@aisnet.og.

2 Li Univesity of Connetiut ABSTRACT With the tehnial develoment of the eading equiment, e-books have witnessed a gadual and steady inease in sales in eent yeas. Last yea, smat hones announed to be able to efom additional funtions as e-book eading devies, making it ossible fo etailes selling e-books fo smat hones (SPR) suh as iphone to diffeentiate with those selling e-books fo seifi eading equiment (SER) suh as Amazon Kindle. We develo a game theoy model to examine the ometition between SER and SPR etailes. We deive the equilibium ie and analyze the fatos that affet equilibium outomes unde both senaios of omlete and inomlete infomation. Ou esults suggest that edued ost due to inonveniene of eading e-books ove iphone lowes equilibium ies, and edued ost of seifi eading equiment leads to moe intense ie ometition. Unde infomation asymmety, we show that SER etailes will inease the ie at equilibium. Keywods E-book, infomation goods, game theoy, ie ometition INTRODUCTION Reently, the ublishing industy has exeiened a suessive deease of evenue togethe with a gim foeast fo the nea futue. Aoding to Assoiation of Ameian Publishes (AAP), book sales do.4% in yea 008. Howeve, e-books have witnessed an outgowth in sales. Aoding to the Assoiation of Ameian Publishes (AAP), in Novembe 008, e-book sales jumed u by 08.3 eent fo the month ($5. million), efleting an inease of 63.8 eent fo the yea. In fat, e- books have seen a steady gowth in these yeas. Aoding to the Intenational Digital Publishing Foum, e-book wholesale evenue has eahed almost 4 million in the thid quate of 008, almost an inease of 75% omaed with the same eiod of 007 (see Figue ). Figue. US Tade Wholesale E-book Sales Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009

3 A oule of easons may exlain the gadual but steady develoment of e-book sales. Fist, tehnology advanements, eseially that of new eading equiment fo e-books suh as Amazon Kindle and Sony e-book eade, make it ossible fo a highe level of eading omfot. Fo examle, high-definition tehnologies have made eading a moe enjoyable exeiene, and boadband tehnologies have tuned downloading e-books into an easy job. In addition, newly develoed equiments suh as Amazon Kindle ae aable of stoing a lage numbe of e-books, whih elaxes the onstaint of e-book stoage. Seond, selling e-books ovides an additional evenue soue fo book etailes. Retailes tyially need to fae high fixed osts in obtaining ublished books, suh as the oyight exenses haged by ublishes and/o authos. Howeve, one the books ae tansfomed into digital fomat, the maginal distibution osts ae extemely low. Thus, any additional way that an hel inease evenue suh as distibuting ublished books in e-book fomat will be a big lus. Thid, ublishing e-books ovides a lowe baie fo indeendent wites to build eutation and distibute thei wok as self-ublishes. Last yea, smat hones suh as iphone, announe that they an involve new softwae to efom additional funtions as e- book eading devies, oviding an altenative fo e-book eades. Fo examle, beginning July 4, 008, Lexyle Stanza, a softwae ogam fo eading e-books, digital newsaes, and othe digital ubliations, was available fo uses of Ale iphone and ipod Touh. Lexyle Stanza enables eletoni books and atiles to be dislayed in an easy-to-ead (and adjustable) fomat and allows ages being tuned with the flik of a thumb. U till now, the softwae has suoted a vaiety of e-book fomats inluding Mobioket, PalmDo, HTML and PDF. In addition, Stanza allows uses to manage a libay of books though a ustomizable eading intefae on iphone and ipod Touh. Right now, the list of Stanza s atnes inludes many online e-books suh as BooksOnBoad, Fitionwise, and Smashwods and ontinues to inease. On those websites, onsumes an uhase e-books and download them wielessly on thei iphones. The aeaane of smat hones as e-book eading devies may lead to an enomous hange of the industy. Comaed with evious e-book eades suh as Amazon Kindle and Sony e-book eades, the distibution hannel of smat hone has the following advantages: Fist of all, hones ae outine equiment fo millions of eole. One tyial examle of smat hones is iphone, the total sale of whih eahed 3 million in the foth quate of 008. Theefoe, onsumes uhasing e-books fo smat hone do not need to uhase seifi equiments fo e-book eading, eseially fo those eole who ae unwilling to ay a lot of items. Seond, although the ie is simila fo newly eleased books fo both smat hones suh as iphone and seifi eading equiment suh as Amazon Kindle, it is elatively heae fo oyalty-fee lassial books on iphone whih usually ost just 99 ents o even less fo eah. Finally, fo those indeendent ublishes, the lage oulation of iphone uses is suely muh moe attative omaed with that of eades using seifi e-book eading equiments (see Table fo a bief omaison of smat hone, Amazon Kindle and Sony e-book eades). Howeve, we assume that the tade-off of eading e-books on smat hone will inu a lowe level of eading omfot, o say a highe inonveniene even if the ontent of books have little diffeene omaed with the e-books fo seifi eading equiment Smat Phone Amazon Kindle Sony e-book Reade Moe than 3 million iphone alone till the foth quate 008 Aound 380,000 Aound 300,000 Table. Comaison of E-book Reading Equiment The sales figues ae estimates in Khaif The sales figue is fom Wikiedia htt://en.wikiedia.og/wiki/ihone Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009

4 In ou oinion, the enty of smat hones suh as iphone will lead to new ometition in the e-book industy. With smat hones, thee ae two tyes of etailes fo e-book industy: etailes selling e-books fo seifi eading equiment (SRP) and etailes selling e-books fo smat hone. Essentially, this is a ometition between etailes who sell homogenous infomation goods (e-books) but fo diffeent ultimate onsumtion devies. Although it is imotant fo omanies to deive thei stategies unde ometition, few eseah have investigate ometition of e-books due to diffeent eading devies. In this eseah, we aim to make an exloatoy study on the iing stategies of etailes unde this ometition senaio. In seifi, we want to answe the following questions: () What is the otimal ie of both tyes of etailes in selling e-books? () Ae thee any diffeenes in the senaio of omlete and inomlete infomation ometition? LITERATURE REVIEW In this ae, we use e-books as ou eseah subjet. Diffeent fom many eent eseah studying e-books fom the aset of oyight and eduation (Shiatuddin 005; Sisaad 005), ou ae is based on e-books oeties as infomation goods. In a boad sense, e-books an been seen as one tye of infomation goods whose ontent onsumed in digital fomat suh as digital musi, videos, and softwae oduts (Asvanund, Clay, Kishnan, and Smith 004; Fan, Kuma, and Whinston 009). Beause of infomation goods unique oety of digitalized ontent, elated issues ae fequently studied suh as the shaing of infomation goods (Asvanund et al. 004), the bundling of infomation goods (Geng, Stinhombe, and Whinston 005) and the samling of infomation goods (Wang and Zhang 007). In ou ae, we examine the issue of ometition of etailes of e-books based on diffeent onsumtion devies (SER and SPR). Befoe the emegene of the Intenet, onventional distibution and onsumtion of eading is based on hysial books. The Intenet makes it ossible fo book etailes selling and distibuting hysial books and e-books. Pevious eseah has illustated the advantages of online distibution omaed with taditional hannels (Dewan, Feime, and Seidmann 000). Howeve, the ometition we ae inteested in is on the onsumtion stage athe than the distibution stage. Hee, we examine the ometition whee thee ae two diffeent e-books due to the eading devie of them, whih is new to the industy of e-books. Ou eseah is elated to the liteatue on ometition games of fims selling homogenous and simila oduts. In ou eseah ontext, thee ae two ometing fims who sell e-books with the same ontent but though diffeent onsuming equiment. Pevious eseah in eonomis often alies Hotelling s aoah to model ometition, whih assumes that onsumes valuation lies on a ontinuous base. In the eseah of ometition infomation goods sales, Bakos and Bynjolfsson (000) disuss seveal diffeent tyes of ometition, inluding usteam and downsteam, and bundle and single infomation good (Bhagava and Choudhay 008). Anothe eseah steam elated to ou wok is otimal iing of infomation goods. and Seshadi (007) find otimal iing stategies fo a selle who faes heteogeneous ustomes in both maginal willingness to ay and hanes of getting infomation goods othe than the selle. Sundaaajan (004) investigate stategies of otimal iing fo infomation goods unde the senaio of inomlete infomation. What distinguishes ou wok ae the follows: () We fous on iing stategies of fims selling e-books whose ometitions ae based on two diffeent onsumtion devies of infomation goods. The distint oety of ometition in ou eseah ontext is that the quality of the oduts, e-books ae in some senses detemined by the eading equiment of onsumes, whih is diffeent fom evious eseah ontexts suh as hysial goods. () We extend ou model to the inomlete infomation senaio and analyze how fatos suh as inonveniene ost, ost of seifi eading equiment and ustome keeing atio affet omanies iing stategies. Ou eseah is elevant to the e-book industy whih is exeiening a aid and fundamental tansfomation, and ovides imotant manageial imliations fo fims to effetively manage the ometition to maximize thei evenue. The eseah disussed above anges ove diffeent asets of ou study, howeve, to the best of ou knowledge, the issue of ometition based on two diffeent onsumtion devies of homogeneous infomation goods, eseially e-books, has not been studies befoe. MODEL We develo a game theoy model of e-books sales unde ometition between two omanies: Comany one who sells e- books that need seifi e-book eading equiment (SER) to ead and omany two who sells e-books that need smat hone (SPR) to ead. The aametes and deision vaiables in ou model ae esented in Table whih will be futhe exlained in this setion. Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 3

5 Deision vaiables Pie of e-book fom SER etaile z Pie of e-book fom SPR etaile Custome-keeing level Paametes Cost due to inonveniene of SER etaile e α β Table. Deision Vaiables and Paametes Cost due to inonveniene of SPR etaile Cost of seifi eading equiment Disount fato of equiment ost Coeffiient of vaiable ost of SPR etaile Custome ket atio In ou eseah setting, ustomes make thei deision of whih omany they want to buy e-books fom based on thei utilities. We assume that the e-books offeed by both omanies have little diffeene in tems of ontent, but have etain level of quality diffeene in tems of eading omfot, o say inonveniene. We denote the ost due to inonveniene when eading though seifi eading equiment suh as Amazon Kindle as and the ost due to inonveniene of eading smat hones suh as iphone as. We suose <, whih imlies that the ustomes will lose moe onveniene eading e- books on smat hones suh as iphone omaed with eading e-books on seifi eading equiments suh as Amazon Kindle. The ationale of making suh assumtion omes fom the featues of two diffeent equiments. Comaed with iphone, Kindle has a lage eading seen, delives highe-ontast lettes on an off-white bakgound, and esembles moe like eal book age. We assume that onsumes have heteogeneous sensitivityϖ to suh ost due to inonveniene. This tehnique of modeling ometition is onsistent with the liteatue (Fan et al. 009). We also assume that the ustomes shae a homogeneous valuation of v fo e-books. In addition, as mentioned ealie in the Intodution Setion, onsumes who want to get an e- book fom SER etaile needs to uhase a seifi e-book eade with the ost e. The eason we assume that onsumes will not uhase an iphone seial fo e-book eading is that smat hone is most often used fo making alls and sending shot messages. The utility of eading e-books on iphone only onsists a small otion of the total utility of using smat hones. We also have not involved in bundling eading equiment with e-books sales beause it is not ommon in eal business atie that one onsume will get a eading equiment fo fee o togethe with uhase of an e-book. In ou model, ustomes hoose to uhase e-books fom one of the two etailes based on thei esonal efeene of ie and sensibility of the ost due to inonveniene. Suose that a ustome s utility is u = v αe ϖ fo uhasing e-books fom SER etaile and u = v ϖ fo uhasing e-books fom SPR etaile. The onstant α, 0 < α < efes to the exeted disounted fato fo the ost of eading equiment on eah e-book. A highe value in α imlies that the equiment is not often used and fo eah e-book the disounted ost of using the equiment is high while a lowe value in α imlies that the equiment is fequently used and fo eah e-book the disounted ost is low (omanies an estimate α based on histoial onsumtion eods). We assume that a ustome is indiffeent between the two e-book ovides if u = u, o + αe say, v αe ϖ = v ϖ. Solving this equation leads toϖ =, whih is the indiffeent oint fo ustomes. When When ϖ ϖ ϖ > ϖ, the ustomes will hoose to buy books fom SER etaile beause u u <, the ustomes will hoose to buy books fom SPR etaile beause u < u (see Figue ). >. Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 4

6 + + α + e v + α e ϖ ϖ = 0 ϖ = Figue. Demand fo E-books Hee, we assume that thee ae demands fo both iphone-based e-books and Kindle-based e-books. As shown in Figue, when v = v, ϖ = ϖ, u = v α ϖ = and u = v ϖ =. Theefoe, it is staight fowad to find the value of v e 0 e 0 + α =. As shown in Figue, onsumes with low sensitivity to ost due to inonveniene ϖ 0 ϖ will hoose SPR etailes while onsumes with high sensitivity to ost due to inonveniene ϖ ϖ will hoose SER etailes. Thus, we find demand fo the two tyes of e-books etailes using sensitivity as an index: () The demand fo omany one is: + αe D = ϖ = () The demand fo omany two is: D = ϖ = + α e Consistent with the assumtion of zeo maginal ost of infomation good, the ofit funtion fo omany one is: π + α e = D = Fo omany two (SPR etailes), we need to onside the additional ost of keeing ustomes. Sine SPR etailes do not dietly distibute e-books to onsumes, they need to use the netwok of ommuniation omanies suh as AT&T who ae also esonsible fo vaious tye of sevies suh as hone alls (both inoming and outgoing), shot messages, othe digital ontent suh as images. Theefoe, the highe level SPR etailes want to kee thei ustomes to avoid omlaints suh as low download seed and high ate of tansfe failue, the highe the maintenane ost. Fo simliity, we denote this ost f z = β + β z, whee z is the level of keeing ustomes. The f ( z) in the linea fom of level of keeing ustomes, ( ) 0 highe the level of keeing ustomes is, the highe the maintenane ost. Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 5

7 Thus, the ofit funtion of omany two is π = D β β z 0 subjet to z D, whih means that the ustome-keeing atio needs to be no less than, 0 < <. In ou ae, we establish a game theoy model fo ometition between SER and SPR etailes. Consistent with evious liteatue (Fan et al. 009), we model the game in two stages. In stage one, both omanies simultaneously set thei ies. In stage two, the omany that distibutes e-books ove smat hones hooses the ustome keeing level. The ational hee is that ies of e-books ae visible to onsumes immediately and fequent hange of ies may bing negative effet to etailes suh as disouaging uent and otential onsumes. On the othe hand, the ustome keeing level is in some senses an intenal deision and an be adjusted based on maket esonse of ometition. Cometition unde the Senaio of Comlete Infomation In the ometition unde the senaio of omlete infomation, we assume that both omanies set the ie simultaneously in the fist stage and the omany selling e-books though iphone sets u the sevie level in the seond stage. Using bakwad indution, we solve the seond stage fist. Sine we assume that ie and demand ae given in the seond stage, the oblem an be simlified to Min z subjet to β + β z 0 z D Fo any given demand, it is staight that the solution is z = D. Substituting the equation bak into SER and SPR etaile s ofit funtions, we an solve the equilibium fo the ie ometition game. The esults ae summaized in Poosition. Poosition. The SER etaile s otimal ie and SPR etaile s otimal ie and the sevie level establish a Nash equilibium, with, and z given as follows: α + β = 3 e + α + β = 3 e z = + αe β 3( ) ( ) Fo bevity, the oof is elegated to the Aendix. The omaative stati fo the equilibium esults is esented in Table 3. Vaiables α e β z ?? Table 3. Comaative Statis Results + inease; - deease; n/a, no effet,? no losed-fom solution Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 6

8 We fist examine the equilibium ies. We find that the equilibium ies of e-books fo both SER and SPR etailes will deease when the ost due to inonveniene of eading e-books fom SER etailes ( ) and/o fom SPR etailes ( ) ineases. This esult suggests that when onsumes who use smat hone inu lowe ost due to inonveniene, then the equilibium ie of both the e-books sold by SER and SPR e-book etailes will go down aodingly. In anothe wod, the maket ie will deease as the tehnology elated to smat hone e-book eade imoves and eading e-books on smat hones suh as iphone is less signifiantly diffeent fom eading e-books on seifi eading equiments. We also find out that when the ie of equiment ( e ) deeases, the ie of SER e-books will inease and the ie of SPR e-books will deease. This esult imlies that as the equiment goes heae, the SER etaile will take this advantage and hages highe ie on e-books, but the SPR etaile needs to lowe the ie to emain ometitive. Pevious liteatue suggests that distint diffeentiation may lead to edued ie ometition. In some sense, ou finding is onsistent with this esult sine a lowe ost of e-book eading equiment efes to a less distint diffeentiation. In addition, ou esults show that equilibium ies also inease in ustome-keeing atio ( ) and vaiable ost of sevie ( β ) of the SPR etaile. This is intuitive beause both ustome-keeing atio and vaiable ost of sevie ontibutes to the maginal ost of SRP etailes. Natually, a highe maginal ost leads to a highe equilibium ie fo SPR etailes. As fo the otimal ustome-keeing level, omaative statis esults suggest that a highe ustome-keeing atio ( ) o a highe vaiable ost of sevie ( β ) will lead to a lowe level of SPR etaile s ustome keeing level. An insetion of the SPR etaile s ofit and ost funtion suggests that as the ost fo IT aaity goes u and sevie level goes u, SPR etaile need to lowe the ustome-keeing level exetation to guaantee the smooth oeation of the business. An inteesting finding is that as the SER equiment ie and usage atio goes u, it is otimal fo SPR to deease the ustome-keeing level exetation. This esult may imly that when the diffeential effet in ie is not signifiant, thee is isk fo SPR etailes to invest to kee a high level of ustome-keeing exetation. Cometition unde the Senaio of Inomlete Infomation We extend the analysis in the evious subsetion and analyze the game unde the senaio of inomlete infomation, o say infomation asymmety. We assume that the SER etaile has inomlete infomation of SPR etaile s ost funtion that the SPR etaile s vaiable ost fo ustome-keeing is β with obability γ, whee β β βh with obability γ, and is L L < H. This setu leads to a Bayesian game whih is fequently used in models of inomlete infomation. Assume that SPR etaile will hoose eithe a high ie o a low ie. When it hooses high ie stategy, its ofit funtion is H H H H L L L L π = D β0 β z, and when it hooses low ie stategy, its ofit funtion is π = D β0 β z. We follow the same game stutue in the evious subsetion and we assume that SER etaile wants to maximize its ofit by hoosing the otimal ie. In anothe wod, the SER etaile s objetive funtion is as follows: Max π = D γ + D ( γ ) H L H L whee D and D efes to the demand of the SER etaile as a funtion of ie of both etailes. Solving the above game of inomlete infomation, we have the following esult: Poosition. The solution to the Bayes Nash Equilibium of the SER and the SPR e-book etailes is as follows: γ H γ L L = αe β β β H H 3 H L L ( ) γ γ = e 3 + α + β + β β + β Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 7

9 L [( ) H L L γ γ = + α e + β β + β ] 3 γ H 3 H γ L L zh = ( + αe ) + β β β + β 3 γ H γ L L zl = ( + αe ) + β β β 3 We an see that at the equilibium of the senaio of inomlete infomation, the SER etaile s otimal ie unde inomlete omlete γ H L ometition will be highe than the senaio of omlete infomation beause = ( β β ) > 0. 3 This esult eveals that unde the senaio of infomation asymmety, SER etailes will tend to inease the ie of thei e- books. One exlanation is that sine thee is unetainty in the stategies SPR etailes will take, haging a highe ie hels SER etailes to diffeentiate themselves with SER etailes and atue otential ustomes. CONCLUSION The intodution of smat hone in this industy may bing a signifiant tansfomation to the whole industy. This eseah uses a game theoy aoah to examine ometition bought by this issue. We distinguish ou eseah by modeling the ometition as a two-stage game between two etailes who diffeentiate with eah othe by selling e-books fo diffeent eading devies: Smat hones suh as iphone o seial equiment suh as Amazon Kindle. We deive the equilibium ie and analyze the fatos that affet equilibium ies unde both senaios of omlete and inomlete infomation. Ou esults suggest that equilibium ies deease in ost due to inonveniene of eading e-books. We also find that edued ost of seifi eading equiment and infomation asymmety leads to moe intense ie ometition. Ou eseah ovides imotant manageial imliations to etailes of infomation goods. Fist, unde ometition of homogenous goods but on diffeent onsumtion devies, a omany who wants to lowe the intensity of ometition needs to naow the diffeene of eading exeiene of onsumes though diffeent eading equiment. Seond, etailes unde inomlete infomation ae likely to diffeentiate with his o he ometitos by ies. Although ou eseah is atiulaly elevant to the e-book industy, it an be extended to othe tyes of infomation goods on diffeent equiments suh as laying digital musi o videos though eithe Ale itouh o PDA. This eseah has seveal limitations. Fist, we assume that both omanies fix ie in the same stage. In eality, omanies an take the stategy of waiting to see thei ometito s behavio befoe they set thei ies. Seond, we only onside the senaio in whih the omanies sell eithe e-books fo smat hones suh as iphone o e-books fo seifi eading equiment suh as Kindle. Fo futue eseah, it will be inteesting to investigate senaios of ometition whee omanies sell both e-books fo smat hone and e-books fo seifi eading equiment. We also obseve that thee ae new models of selling e-books online, suh as oviding a fee fist hate to ustomes. Investigation on those new business models an also be an inteesting extension of this ae. Fo examle, Kindle eently has announed a eade aliation fo iphones, whih makes Amazon a selle of both Kindle-based e-books and smat hone-based e-books. In that senaio, we will have ometition between selles of both tye of e-books and annibalization is going to be an issue. Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 8

10 APPENDIX Poof of Poosition We fist get the ofit funtion fo both the SER and the SPR e-book etailes as follows: π = + α e + αe π = ( β ) β0 Then we take the fist-ode ondition of both ofit funtions π + α π + α β e = = e = + = 0 0 The last ste is to solve the evious equations simultaneously to get the otimal solutions of ies and find the otimal esult of z aodingly. Poof of Poosition Simila to the oof of Poosition, we fist get the ofit funtion fo the SER etaile, the SPR etaile with high ie stategy and low ie stategy: H L H L ( ) γ ( + αe ) ( γ )( + αe ) π = D γ + D γ = + π H + α = ( β ) H H H e L L L L + αe π = ( β ) Then, we obtain the fist ode onditions of the evious ofit funtions and solve them simultaneously to get the solutions. REFERENCES. Asvanund, A., Clay, K., Kishnan, R. and Smith, M. D. (004) An emiial analysis of netwok extenalities in ee-toee musi-shaing netwoks, Infomation Systems Reseah, 5,, Bakos, Y. and Bynjolfsson, E. (000) Bundling and ometition on the Intenet, Maketing Siene.9,, Bhagava, H. K. and Choudhay, V. (008) When is vesioning otimal fo infomation goods? Management Siene, 54, 5, , Y. and Seshadi, S. (007) Podut develoment and iing stategy fo infomation goods unde heteogeneous outside ootunities, Infomation Systems Reseah, 8,, Dewan,R., Feime, M. and Seidmann, A. (000).Oganizing distibution hannels fo infomation goods on the Intenet, Management Siene, 46, 4, Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 9

11 6. Fan. M., Kuma, S., and Whinston., A. B. (007) Selling o advetising: Stategies fo oviding digital media online, Jounal of Management Infomation Systems, 4, 3, Fan. M., Kuma, S., and Whinston., A. B. (009) Shot-tem and long-tem ometition between ovides of shinkwa softwae and softwae as a sevie, Euoean Jounal of Oeational Reseah, 96,, Geng, X., Stinhombe, M. B., and Whinston, A. B. (005) Bundling infomation goods of deeasing value, Management Siene, 5, 4, Khaif, O. Move ove Kindle; E-books hit ell hones, Business Week, Deembe 30, 008. htt:// 0. Lang, K.R., and Vagov, R. (005) A iing mehanism fo digital ontent distibution ove omute netwoks, Jounal of Management Infomation Systems,,, 39.. Shiatuddin, N. (005). E-Books in highe eduation: Tehnology, e-maketing osets, and iing stategy, Jounal of Eletoni Commee in Oganizations, 3,, -6.. Sisaad, S. (005) E-book ublishing suess: How anyone an wite, omile and sell e-books on the Intenet, Online Infomation Review, 9, 6, Sundaaajan, A. (004) Nonlinea iing of infomation goods, Management Siene, 50,, Wang, C. and Zhang, X. (007) Samling of infomation goods, Poeedings of the ninth intenational onfeene on Eletoni ommee, Intenet Resoues: 5. htt:// 6. Assoiation of Ameian Publishes Reot. htt://ublishes.og/main/industystats/indstats/008/nov08stats.htm 7. htt://en.wikiedia.og/wiki/file:iphone_sales_e_quate.ng Poeedings of the Fifteenth Ameias Confeene on Infomation Systems, San Faniso, Califonia August 6 th -9 th 009 0