The Effect of Piracy Protection in Book Publishing

The E ect of Piracy Protection in Book Publishing Imke Reimers This version: May 18, 2014 Abstract Digitization has impacted media industries by lowering the cost of distributing cultural goods. With the option to download creative works legally, however, comes the possibility of doing so illegally. Some less well-known artists may welcome this online piracy as an opportunity to increase reach, while more established artists do not have to rely on this type of promotion. I examine the e ects of the illegal distribution of books on regular book sales for di erent types of titles and book formats. I exploit a natural experiment where di erent book titles are protected by a book piracy protection company at di erent times. I compare sales of similar book titles with and without piracy protection, before and after titles have been added by the piracy protection company, in a di erence-in-di erences setting. I nd that the e ect of piracy protection varies across formats and titles. E-books, the closest substitute for online piracy, bene t from piracy protection by selling 15.4% more units, while there is no signi cant e ect on other formats. The e ect is more pronounced for titles that have been successful prior to piracy protection, indicating that book piracy has a promotional e ect for lesser known works. NBER and Northeastern University, 304 Lake Hall, 360 Huntington Avenue, Boston, MA 02115, reimers@nber.