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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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  • Joan Calzada & Tommaso M. Valletti, 2011. "Intertemporal Movie Distribution: Versioning when customers can buy both versions," CEIS Research Paper 198, Tor Vergata University, CEIS, revised 20 Jun 2011.
    • Handle: RePEc:rtv:ceisrp:198
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    1. is not listed on IDEAS
    2. Joan Calzada & Guillem Ordóñez, 2012. "Competition in the news industry: fighting aggregators with versions and links," Working Papers 12-22, NET Institute.
    3. Weber, Nicolas R. & Marchand, André & Kunz, Reinhard E., 2024. "Price and delay decisions for sequentially released products: The case of transactional streaming services," International Journal of Research in Marketing, Elsevier, vol. 41(4), pages 687-702.
    4. Hailiang Chen & Yu Jeffrey Hu & Michael D. Smith, 2019. "The Impact of E-book Distribution on Print Sales: Analysis of a Natural Experiment," Management Science, INFORMS, vol. 65(1), pages 19-31, January.
    5. Kitamura, Ryoma & Shinkai, Tetsuya, 2015. "Product line strategy within a vertically differentiated duopoly," Economics Letters, Elsevier, vol. 137(C), pages 114-117.
    6. I. Robert Chiang & Jhih‐Hua Jhang‐Li, 2020. "Competition through Exclusivity in Digital Content Distribution," Production and Operations Management, Production and Operations Management Society, vol. 29(5), pages 1270-1286, May.
    7. Monire Jalili & Michael S. Pangburn, 2020. "Pricing Joint Sales and Rentals: When are Purchase Conversion Discounts Optimal?," Production and Operations Management, Production and Operations Management Society, vol. 29(12), pages 2679-2695, December.
    8. Esma Koca & Tommaso Valletti & Wolfram Wiesemann, 2021. "Designing Digital Rollovers: Managing Perceived Obsolescence through Release Times," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3698-3712, October.
    9. Francisco Martínez-Sánchez, 2016. "Versioning Goods and Joint Purchase: Substitution and Complementarity Strategies," Prague Economic Papers, Prague University of Economics and Business, vol. 2016(5), pages 577-590.
    10. Chai, Zheng & Feng, Nan & Wang, Harry Jiannan & Feng, Haiyang, 2025. "Optimal exclusivity strategy for digital service on competing platforms with different installed bases," Journal of Retailing, Elsevier, vol. 101(1), pages 120-137.
    11. Ryoma Kitamura & Tetsuya Shinkai, 2014. "Strategic Choice on Product Line in Vertically Differentiated Duopoly," Discussion Paper Series 120, School of Economics, Kwansei Gakuin University, revised Aug 2014.
    12. Paul Belleflamme & Dimitri Paolini, 2019. "Strategic attractiveness and release decisions for cultural goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 198-224, April.
    13. Yongbo Xiao & Liming Wang & Jian Chen, 2020. "Dynamic pricing in a trade‐in program with replacement and new customers," Naval Research Logistics (NRL), John Wiley & Sons, vol. 67(5), pages 334-352, August.
    14. Belleflamme, P. & Paolini, D., 2015. "Strategic Promotion and Release Decisions for Cultural Goods," LIDAM Discussion Papers CORE 2015037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    15. Terrence August & Duy Dao & Hyoduk Shin, 2015. "Optimal Timing of Sequential Distribution: The Impact of Congestion Externalities and Day-and-Date Strategies," Marketing Science, INFORMS, vol. 34(5), pages 755-774, September.
    16. Xiao, Yongbo, 2017. "Choosing the right exchange-old-for-new programs for durable goods with a rollover," European Journal of Operational Research, Elsevier, vol. 259(2), pages 512-526.
    17. Ryoma Kitamura & Tetsuya Shinkai, 2014. "Cannibalization within the Single Vertically Di¤erentiated Duopoly," Discussion Paper Series 124, School of Economics, Kwansei Gakuin University, revised Dec 2014.
    18. Anita Rao, 2015. "Online Content Pricing: Purchase and Rental Markets," Marketing Science, INFORMS, vol. 34(3), pages 430-451, May.
    19. Tetsuya Shinkai & Ryoma Kitamura, 2019. "Production Substitution of Goods Within and Between Firms in a Multiproduct Duopoly," Discussion Paper Series 197, School of Economics, Kwansei Gakuin University.
    20. Tetsuya Shinkai & Ryoma Kitamura, 2018. "Product Line Strategy within a Vertically Differentiated Duopoly under Non-negativity Outputs Constraints," Discussion Paper Series 179, School of Economics, Kwansei Gakuin University.
    21. Qiu-Hong Wang & Kai-Lung Hui, 2017. "Technology Mergers and Acquisitions in the Presence of an Installed Base: A Strategic Analysis," Information Systems Research, INFORMS, vol. 28(1), pages 46-63, March.
    22. Tetsuya Shinkai & Ryoma Kitamura, 2021. "How Do the Relative Superiority of a High-quality Good and Cost Inefficiency between Firms Affect Product Lines in Multiproduct Firms?," Discussion Paper Series 230, School of Economics, Kwansei Gakuin University.
    23. Ryoma Kitamura & Tetsuya Shinkai, 2015. "Product Line Strategy in a Vertically Differentiated Duopoly," Discussion Paper Series 134, School of Economics, Kwansei Gakuin University.
    24. 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.

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    Keywords

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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