Intertemporal Movie Distribution: Versioning When Customers Can Buy Both Versions
We study a model of film distribution and consumption. The studio can release two goods, a theatrical version 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 some consumers may watch both versions. This simple extension leads to novel results. It now becomes optimal to introduce versioning if the goods are not too substitute for one another, even when production costs are zero (pure information goods). We also demonstrate that the simultaneous release of the versions ("day-and-date" strategy) can be optimal when the studio is integrated with the exhibition and distribution channels. In contrast, a sequential release ("video window" strategy) is typically the outcome when the studio negotiates with independent distributors and exhibitors.
Volume (Year): 31 (2012)
Issue (Month): 4 (July)
|Contact details of provider:|| Postal: |
Web page: http://www.informs.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- GABSZEWICZ, Jean J. & WAUTHY, Xavier Y., 2001.
"The option of joint purchase in vertically differentiated markets,"
CORE Discussion Papers
2001013, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean J. Gabszewicz & Xavier Y. Wauthy, 2003. "The option of joint purchase in vertically differentiated markets," Economic Theory, Springer, vol. 22(4), pages 817-829, November.
- Salant, Stephen W, 1989. "When Is Inducing Self-selection Suboptimal for a Monopolist?," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 391-97, May.
- Kenneth S. Corts, 2001. "The Strategic Effects of Vertical Market Structure: Common Agency and Divisionalization in the US Motion Picture Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(4), pages 509-528, December.
- Arun Sundararajan, 2003. "Managing Digital Piracy: Pricing, Protection and Welfare," Law and Economics 0307001, EconWPA.
- 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.
- Barak Orbach, . "Antitrust and Pricing in the Motion Picture Industry," American Law & Economics Association Annual Meetings 1051, American Law & Economics Association.
- Sanjeev Swami & Jehoshua Eliashberg & Charles B. Weinberg, 1999. "SilverScreener: A Modeling Approach to Movie Screens Management," Marketing Science, INFORMS, vol. 18(3), pages 352-372.
- Julie Holland Mortimer, 2007.
"Price Discrimination, Copyright Law, and Technological Innovation: Evidence From The Introduction of DVDs,"
The Quarterly Journal of Economics,
MIT Press, vol. 122(3), pages 1307-1350, 08.
- Mortimer, Julie Holland, 2007. "Price Discrimination, Copyright Law, and Technological Innovation: Evidence From The Introduction of DVDs," Scholarly Articles 3425914, Harvard University Department of Economics.
- Julie Holland Mortimer, 2005. "Price Discrimination, Copyright Law, and Technological Innovation: Evidence from the Introduction of DVDs," NBER Working Papers 11676, National Bureau of Economic Research, Inc.
- Dana, James D, Jr & Spier, Kathryn E, 2001. "Revenue Sharing and Vertical Control in the Video Rental Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 49(3), pages 223-45, September.
- Daniel A. Levinthal & Devavrat Purohit, 1989. "Durable Goods and Product Obsolescence," Marketing Science, INFORMS, vol. 8(1), pages 35-56.
- Arthur De Vany & W. Walls, 1999. "Uncertainty in the Movie Industry: Does Star Power Reduce the Terror of the Box Office?," Journal of Cultural Economics, Springer, vol. 23(4), pages 285-318, November.
- Hemant K. Bhargava & Vidyanand Choudhary, 2008. "Research Note--When Is Versioning Optimal for Information Goods?," Management Science, INFORMS, vol. 54(5), pages 1029-1035, May.
- Xubing Zhang, 2009. "Retailers' Multichannel and Price Advertising Strategies," Marketing Science, INFORMS, vol. 28(6), pages 1080-1094, 11-12.
- Ricard Gil, 2009. "Revenue Sharing Distortions and Vertical Integration in the Movie Industry," Journal of Law, Economics and Organization, Oxford University Press, vol. 25(2), pages 579-610, October.
- Prasad Ashutosh & Bronnenberg Bart & Mahajan Vijay, 2004. "Product Entry Timing in Dual Distribution Channels: The Case of the Movie Industry," Review of Marketing Science, De Gruyter, vol. 2(1), pages 1-20, March.
- Varian, Hal R, 2000. "Buying, Sharing and Renting Information Goods," Journal of Industrial Economics, Wiley Blackwell, vol. 48(4), pages 473-88, December.
- Ricard Gil & Wesley R. Hartmann, 2009. "Empirical Analysis of Metering Price Discrimination: Evidence from Concession Sales at Movie Theaters," Marketing Science, INFORMS, vol. 28(6), pages 1046-1062, 11-12.
- Sumit Raut & Sanjeev Swami & Eunkyu Lee & Charles B. Weinberg, 2008. "How Complex Do Movie Channel Contracts Need to Be?," Marketing Science, INFORMS, vol. 27(4), pages 627-641, 07-08.
- Randy Nelson & Clifford Reid & Owen Gilmore, 2007. "An Analysis of the Out-of-Market Gap for DVDs in the U.S," Review of Industrial Organization, Springer, vol. 30(4), pages 303-323, June.
- K. Sridhar Moorthy, 1984. "Market Segmentation, Self-Selection, and Product Line Design," Marketing Science, INFORMS, vol. 3(4), pages 288-307.
- Gil, Ricard, 2007. ""Make-or-buy" in movies: Integration and ex-post renegotiation," International Journal of Industrial Organization, Elsevier, vol. 25(4), pages 643-655, August.
- V. Krishnan & Karl T. Ulrich, 2001. "Product Development Decisions: A Review of the Literature," Management Science, INFORMS, vol. 47(1), pages 1-21, January.
- Eric T. Anderson & James D. Dana, Jr., 2009. "When Is Price Discrimination Profitable?," Management Science, INFORMS, vol. 55(6), pages 980-989, June.
- Stokey, Nancy L, 1979. "Intertemporal Price Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 93(3), pages 355-71, August.
- Joseph J. Spengler, 1950. "Vertical Integration and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 58, pages 347.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:31:y:2012:i:4:p:649-667. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If references are entirely missing, you can add them using this form.