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Intertemporal movie distribution: Versioning when customers can buy both versions

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  • Calzada, Joan
  • Valletti, Tommaso

Abstract

We study a model of film production, distribution and consumption. The studio can release two goods, a theatrical and a video version, and has to decide on its versioning and sequencing strategy. In contrast with the previous literature, we allow for the possibility that consumers watch both versions. This simple extension leads to novel results. It now becomes optimal to introduce versioning if the goods are not too substitutes for one anoher, even when production costs are zero (pure information goods). We also demonstrate that a 'day-and-date' strategy can be optimal when the studio is integrated with the exhibition and distribution channels. In contrast, a 'video window' is typically the outcome of the negotiation between the studio and independent distributors and exhibitors.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8279.

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Date of creation: Feb 2011
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Handle: RePEc:cpr:ceprdp:8279

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Related research

Keywords: Distribution channels; Information goods; Movie industry; Product segmentation; Sequential release; Versioning;

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Cited by:
  1. Joan Calzada & Guillem Ordóñez, 2012. "Competition in the news industry: fighting aggregators with versions and links," Working Papers 12-22, NET Institute.

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