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Intertemporal Movie Distribution: Versioning when customers can buy both versions

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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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File URL: ftp://www.ceistorvergata.it/repec/rpaper/RP198.pdf
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Bibliographic Info

Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number 198.

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Length: 44 pages
Date of creation: 20 Jun 2011
Date of revision: 20 Jun 2011
Handle: RePEc:rtv:ceisrp:198

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Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
Phone: +390672595601
Fax: +39062020687
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Web page: http://www.ceistorvergata.it
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Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
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Web: http://www.ceistorvergata.it

Related research

Keywords: Product segmentation; versioning; sequential introduction; distribution channels; movie industry; information goods.;

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References

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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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