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Top1. Introduction
Content digitalization has given rise to products with homogeneous content but in different formats (digital format and physical format) in e-commerce (Lambrecht et al. 2014). Examples include print books and e-books, print and online magazines, print and online newspaper, physical music CD and online music albums, etc. Consequently, retailers have expanded space of bundling strategy such as whether to provide bundle of products in digital format and physical format to maximize their benefit (Venkatesh and Chatterjee 2006). In this study, the authors focus on the online publishing industry, in which e-books gain wide popularity after the giant book retailer Amazon introduced its e-book reader Kindle in November 2007 (Jiang and Katsamakas 2010). Now, millions of consumers read e-books on reading devices such as Amazon Kindle, Barnes & Noble Nook and Kobo e-reader as well as on smart phones and tablets. In general, along with the trend of increasing IT-Investment (Rasheed and Rasheed 2015), the digital sales in online book market will steadily increase (Ingram 2014).
From the point of view of consumers, both print books and e-books have their own advantages (Chao et al. 2013). While some consumers like the pleasant experience of holding and reading a print book and keeping them as souvenirs and art objects, some other consumers enjoy the convenience of choosing and reading an e-book from a personal e-book library stored in the e-book reading device (Wingfield 2013). They may also enjoy the value-added services such as automatic bookmark, advanced search functions, and the lending of e-books to friends, etc.
Then consumers often raise a common question: Can I have both of them? This current study is inspired by the practices of online book retailers’ strategy of bundling both print books and e-books. Russ Grandinetti, Amazon’s vice presidents of Kindle content told the media that Amazon received frequent request from their Kindle consumers to get both print and Kindle book libraries (Wingfield 2013). As a response for consumers’ request, Amazon has recently started a new program Amazon Matchbook which allows consumers who had bought a print book from Amazon back to 1995 to buy the e-book version of the same book at a price from $0-$2.99 (Textbooks available for $9.99 or less).1 Amazon says publishers such as HarperCollins have agreed to participate and the program has already included thousands of books (Wingfield 2013). Another online book retailer, Barnes & Noble also started a similar program Sync up in 2014 under which consumers of Barnes & Noble can buy discounted e-books after they have purchased the print books.2