Cross-selling in the US home video industry

We identify significant cross-selling effects in the home video industry: a 10% increase in the demand for a studio's old titles leads to a 4.7% increase in new title sales. We argue this is due to supply-side effects: studios with strong titles are better able to "push" other titles...

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Bibliographic Details
Published in:The Rand journal of economics 2016-04, Vol.47 (1), p.29-47
Main Authors: Cabral, Luís, Natividad, Gabriel
Format: Article
Language:English
Subjects:
Causality
Cross selling
Retail sales
Studies
Supply & demand
Video industry
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Summary:We identify significant cross-selling effects in the home video industry: a 10% increase in the demand for a studio's old titles leads to a 4.7% increase in new title sales. We argue this is due to supply-side effects: studios with strong titles are better able to "push" other titles through retailers; and the latter "push" these additional supplies to consumers by means of lower prices and/or heavier advertising. Our strategy for identifying causality is based on "star power" effects: increases in old movie demand caused by recent success of movies with a similar cast and/or director.
ISSN:0741-6261
1756-2171
DOI:10.1111/1756-2171.12117