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Dainis Zegners: Research on the e-book market

“The e-book market is an interesting example of a changing market”

Digitisation is in full swing and has been a topic of research for quite some time. At our faculty, the research initiative “Digital Transformation and Value Creation” explores developments due to the progress and changing opportunities induced by digitisation. Dainis Zegners is Junior Professor at the WiSo-Faculty of the University of Cologne and part of the research initiative. In this interview, he reveals his fascination with the omnipresent topic of digitisation and his research on the e-book market.

Interview with Dainis Zegners

Professor Zegners, you are part of the research initiative on “Digital Transformation and Value Creation”. Researchers of different disciplines such as marketing, information systems, psychology and economics are engaged in various aspects of the “digital transformation” of the economy and society. The topic has many facets. In which ones are you particularly interested?

All of them! No, seriously, I like that the topic has so many facets and touches on so many different areas. Today, there is hardly a sphere of life that is not affected by digitisation, whether it is  the way we communicate, the way we work and consume, which political party we elect or how we look for a partner. Even wars are now fought with automated drones or in Cyberspace.

For me, as a researcher, it is particularly interesting that many activities we perform digital and online today are a reflection of what we do in the “physical”, that is, in the normal world. For me as a researcher, this enables me to gather completely new data to examine the behaviour of people and firms. For example: If we are asking ourselves to which extend social media networks such as Facebook influence the voting behaviour of voters today, we have to be aware that voters always have been influenced by their social environment. Only now, by using data from social media networks, we are able to observe and measure the behaviour of voters with such a high precision. “Fake news” such as conspiracy theories i and propaganda have been around long before the invention of the internet. Nevertheless, this should not imply that we should not ask ourselves whether this problem has become more severe due to Facebook.

In your research, you look at the e-book market. Why did you choose that market in particular?

Because of the digitalisation, the e-book market is an interesting example of a changing market. The relevance of traditional gatekeepers, institutions like publishers, who decide which products are released on the market, declines. On the other hand, new gatekeepers such as search engines like Google or social media networks such as Facebook or Twitter have emerged.This enables suppliers and authors to distribute their products in new ways, but leads to new problems and challenges.

What is it exactly that you examine in the e-book market?

I study the relationship between authors’ pricing strategies and their online reputation, i.e. their ratings and the reviews that readers publish on platforms such as Amazon. A challenge for many authors who decide against or cannot publish their books via a traditional publisher but instead self-publish their e-books online is that they compete for readership with thousands of other authors who simultaneously publish their books online. As a consequence, it is a particularly popular strategy for authors to offers books for free in a first step, hoping to receive good reviews and recommendations, which can be beneficial later.

Which results are the most surprising ones in your research?

Interestingly, I found that authors who offer their books for free receive worse ratings than authors who sell their books at a price. As I only use those books in my analysis for which the authors switch between offering free and selling at a price, I can rule out that the effect is driven by the fact that worse books are more often offered for free. It seems that when a book is offered free of charge, many readers would not have been willing to pay for that book. However, as it is free, they read and rate it, but worse than readers who would have been willing to pay a price. In principle, this result can also be applied to other markets. For example, expensive products like Apple’s iPhone might be lauded and hyped by their owners simply because only those buyers were willing to pay such a high price for the product.

What are current topics you are working on?

My research project on the e-book market is not published yet. Therefore, I am finalising that project to submit it to an academic journal . Lately, I have become interested in media economics and media bias. Look out for more on that topic in the next interview in a few years...   

Professor Zegners, thank you very much for the interview!

Interview: Sarah Brender