Publishing in a Digital Era: An analysis of the Norwegian publishing industry

Ludvig Ovtun van der Hagen

Student thesis: Master thesis

Abstract

This master’s thesis researches the Norwegian book publishing industry, and the capabilities of incumbent publishers in ensuring long-­‐term competitiveness and industry health. The impact of digitalization and the disruptive potential it presents to the publishing industry is the phenomenon deeming the thesis relevant. Departing from the resource-­‐based view, the thesis applies dynamic capabilities theory in the creation of an initial framework investigating whether incumbent publishers have the capabilities required in a dynamic context characterized by digitalization. The initial framework emphasize that capabilities related to sensing market changes, seizing opportunities, and managing threats and reconfigurations are needed to succeed in the future publishing industry. However, distinctive aspects of the Norwegian publishing industry are highlighted: the Book Agreement legitimizing retail price maintenance, the level of vertical integration, and a standardization of contracts with authors. The distinctive aspects contribute to incumbents dominating the industry, and are analyzed to constitute sources of inertia. Consequently, dynamic capabilities theory is found insufficient in explaining how incumbent Norwegian publishers are to be relevant in a digital era. Thus, the need for a new framework emerges, resulting in the application of ecosystem and activity system theory. The subsequent analysis shows that thinking of publishing as an ecosystem reveals the potentially detrimental effect of leveraging bottlenecks and extracting, rather than sharing, value. On the same note, incumbent publishers are found to be dominators in the activity system, although they have the capability of coordinating activities in their network. The findings require the need for reframing the publishing industry in order to reveal the potential of thinking of the publishing business model in new terms. The contribution of the thesis is that aspects related to openness and flexibility are what is deemed necessary for incumbent publishers to stay relevant in the digital era. However, important to note is that the contribution is not to be considered definitive, as there are important aspects to the book industry in general, e.g. the promotion of national literature, which is not considered in the thesis. Nevertheless, the thesis aims to be a source of inspiration to incumbent publishers and industry stakeholders alike, as it casts new light on a traditional and important national industry. Keywords: publishing, e-­book, digitalization, resource-­based view, dynamic capabilities, incumbent inertia, ecosystem, activity system, Prime Movership, value-­creating system, reframing, business model reconfiguration.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2014
Number of pages121