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 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.