Digitization and the Demand for Physical Works: Evidence from the Google Books Project

The age of digitization promised to deliver a centralized, digital repository of all knowledge. Copyright holders, however, concerned about reduced demand for physical works, have blocked the realization of this vision. We investigate the effect of digitization on demand for physical works using novel data tracking the timing of the digitization of individual books from Harvard University's libraries through the Google Books project. Digitization hurt loans within Harvard but increased sales of physical editions by about 35\%, especially for less popular works. Rather than cannibalizing demand, digitization might benefit copyright holders through increased discovery of less popular works.