How Video Rental Patterns Change as Consumers Move Online

Alejandro Zentner (), Michael Smith and Cuneyd Kaya ()
Additional contact information
Alejandro Zentner: Jindal School of Management, University of Texas at Dallas, Richardson, Texas 75080
Cuneyd Kaya: Jindal School of Management, University of Texas at Dallas, Richardson, Texas 75080

Management Science, 2013, vol. 59, issue 11, 2622-2634

Abstract: How will consumption patterns for popular and “long-tail” products change when consumers move from brick-and-mortar to Internet markets? We address this question using customer-level panel data obtained from a national video rental chain as it was closing many of its local stores. These data allow us to use the closure of a consumer's local video store as an instrument, breaking the inherent endogeneity between channel choice and product choice. Our results suggest that when consumers move from brick-and-mortar to online channels, they are significantly more likely to rent “niche” titles relative to “blockbusters.” This suggests that a significant amount of niche product consumption online is due to the direct influence of the channel on consumer behavior, not just due to selection effects from the types of consumers who decide to use the Internet channel or the types of products that consumers decide to purchase online. This paper was accepted by Pradeep Chintagunta, marketing.

Keywords: long tail; movie rentals; natural experiment; empirical estimation (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2013.1731 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:59:y:2013:i:11:p:2622-2634

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().