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Technological change and managerial challenges in the movie theater industry

Author

Listed:
  • Charles B. Weinberg

    (University of British Columbia)

  • Cord Otten

    (University of Hamburg)

  • Barak Orbach

    (The University of Arizona)

  • Jordi McKenzie

    (Macquarie University)

  • Ricard Gil

    (Queen’s University)

  • Darlene C. Chisholm

    (Suffolk University)

  • Suman Basuroy

    (University of Texas at San Antonio)

Abstract

The recent rise of digital technology in the delivery of entertainment casts doubt among industry stakeholders on whether movie theaters will continue to be the primary channel of the release of motion pictures. Despite the growth of competing outlets due to the spread of digitalization, we argue that the movie theater industry may benefit from digital technologies as well. Enhancing the cinemagoing experience, better matching of the cinemagoing experience to consumer preferences, and improving capacity utilization are crucial if movie theaters are to continue having a pivotal role in the distribution of filmed entertainment. In particular, our data analysis demonstrates that the use of new digital technologies and “big data” may be one way to turn the current threats into future opportunities for movie exhibitors. Therefore, managerial strategies that aim to raise the value proposition of theaters by enhancing the cinemagoing experience, and that boost adaptability to rapidly changing consumer preferences about how and when they view filmed entertainment, ought to be studied and implemented.

Suggested Citation

  • Charles B. Weinberg & Cord Otten & Barak Orbach & Jordi McKenzie & Ricard Gil & Darlene C. Chisholm & Suman Basuroy, 2021. "Technological change and managerial challenges in the movie theater industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 239-262, June.
    • Handle: RePEc:kap:jculte:v:45:y:2021:i:2:d:10.1007_s10824-019-09374-z
    DOI: 10.1007/s10824-019-09374-z
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    References listed on IDEAS

    as
    1. de Roos, Nicolas & McKenzie, Jordi, 2014. "Cheap Tuesdays and the demand for cinema," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 93-109.
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    3. Ricard Gil & Wesley Hartmann, 2007. "The Role and Determinants of Concession Sales in Movie Theaters: Evidence from the Spanish Exhibition Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(4), pages 325-347, June.
    4. Patrick Bajari & Victor Chernozhukov & Ali Hortaçsu & Junichi Suzuki, 2019. "The Impact of Big Data on Firm Performance: An Empirical Investigation," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 33-37, May.
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    8. Eliashberg, Jehoshua & Hegie, Quintus & Ho, Jason & Huisman, Dennis & Miller, Steven J. & Swami, Sanjeev & Weinberg, Charles B. & Wierenga, Berend, 2009. "Demand-driven scheduling of movies in a multiplex," International Journal of Research in Marketing, Elsevier, vol. 26(2), pages 75-88.
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    Cited by:

    1. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    2. Fernanda Gutierrez-Navratil & Maria J. Perez-Villadoniga & Juan Prieto-Rodriguez, 2024. "Attracting new audiences to high culture: an analysis of live broadcasted performing arts at cinema theaters," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 48(3), pages 387-404, September.
    3. Thorsten Hennig-Thurau & S. Abraham Ravid & Olav Sorenson, 2021. "The Economics of Filmed Entertainment in the Digital Era," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 157-170, June.

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    More about this item

    Keywords

    Movies; Theaters; Exhibitors; Technological change; Digitalization; Big data; Filmed entertainment; Product differentiation;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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