10.1184/R1/6471494.v1
Alejandro Zentner
Alejandro
Zentner
Michael Smith
Michael
Smith
Cuneyd Kaya
Cuneyd
Kaya
How Video Rental Patterns Change as Consumers Move Online
Carnegie Mellon University
2012
Long Tail
movie rentals
natural experiment
empirical estimation
2012-10-01 00:00:00
Journal contribution
https://kilthub.cmu.edu/articles/journal_contribution/How_Video_Rental_Patterns_Change_as_Consumers_Move_Online/6471494
<p>How will consumption patterns change when consumers move from brick-and-mortar to Internet markets? If consumers purchase more niche products online than at brick-and- mortar stores, does this have something to do with the channel or is this solely due to selection effects: the types of consumers who decide to use the Internet channel or the types of products that consumers select to purchase online?<br><br>We address these questions using customer-level rental panel data obtained from a national video chain as it was closing many of its local stores. This allows us to observe how behavior changes when consumers are forced to move from brick-and-mortar to online consumption.<br><br>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 nature of the channel, not just due to selection effects.</p>