Antitrust and Pricing in the Motion Picture Industry
AbstractFew industries have experienced the same degree of antitrust scrutiny and litigation as the motion picture industry. Nevertheless, the pricing structure of movie tickets has never been a product of free market forces. Since the early 1970s, ticket pricing has been particularly puzzling: At any given theater, admission fees are uniform across movies and over time. This Article studies the history of the industry's pricing systems in their legal, economic, and technological contexts. It shows that, despite intensive antitrust scrutiny and litigation, forces with considerable market power have always shaped the industry's pricing systems. The Article studies the present pricing regime and explores the economic justifications for uniform pricing, concluding that none of the justifications is sound. The Article argues that vertical restraints, which are illegal under present antitrust laws, have at least some impact on the persistence of the present pricing regime. It further argues that the current prohibition against distributors' intervention in ticket pricing is undesirable and that, given the idiosyncratic characteristics of the industry, a coordinated transition to a variable pricing could be desirable.
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Bibliographic InfoPaper provided by American Law & Economics Association in its series American Law & Economics Association Annual Meetings with number 1051.
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- Barak Orbach, . "Antitrust and Pricing in the Motion Picture Industry," University of Michigan John M. Olin Center for Law & Economics Working Paper Series umichlwps-1009, University of Michigan John M. Olin Center for Law & Economics.
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- Calzada, Joan & Valletti, Tommaso, 2011.
"Intertemporal movie distribution: Versioning when customers can buy both versions,"
CEPR Discussion Papers
8279, C.E.P.R. Discussion Papers.
- Joan Calzada & Tommaso M. Valletti, 2012. "Intertemporal Movie Distribution: Versioning When Customers Can Buy Both Versions," Marketing Science, INFORMS, vol. 31(4), pages 649-667, July.
- Chien-Ping Chen, 2009. "A Puzzle or a Choice: Uniform Pricing for Motion Pictures at the Box," Atlantic Economic Journal, International Atlantic Economic Society, vol. 37(1), pages 73-85, March.
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