Is It Better for a Publisher to Release an Audiobook after Its E-Book Version?

The e-books industry is mature, and audiobooks are becoming increasingly popular. More and more publishers are coming to realize that audiobooks could be a potential revenue driver and intend to release audiobooks. Considering that there is a certain substitutability between e-books and audiobooks, publishers need to decide how to release a book in its audible version and its e-book version into the market. In this paper, we incorporate the discount factor and the consumers' acceptance level for audiobooks into the consumer utility by dividing consumers into two types, high-value type and low-value type, and construct two different release models: releasing the audiobook and the e-book simultaneously and releasing the audiobook after the e-book. Using an optimization tool, we investigate pricing strategies of a monopolistic publisher under two different release models. By comparing the theoretical results of the two models, we find that when the consumers' patience exceeds a certain threshold, releasing a book in its audible version after its e-book version is better for the publisher, and the publisher should adopt a skimming (refers to decreasing markups over time) pricing strategy for the e-book in this case. Further, the publisher should set a higher price for the audiobook than the e-book, whether or not they release the audiobook after the e-book. In addition, we conduct a numerical analysis to investigate how the discount factor, the percentage of high-value consumers, and the high-value consumers' acceptance level for audiobooks affect the consumer surplus and the social welfare. This study offers publishers some managerial insights into the complex issues involving pricing and release strategies. [ABSTRACT FROM AUTHOR]