Intertemporal movie distribution: Versioning when customers can buy both versions

Tommaso Valletti and Joan Calzada

No 8279, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Distribution channels; Information goods; Movie industry; Product segmentation; Sequential release; Versioning (search for similar items in EconPapers)
JEL-codes: D21 L12 L82 M31 (search for similar items in EconPapers)
Date: 2011-02
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Intertemporal Movie Distribution: Versioning When Customers Can Buy Both Versions (2012)
Working Paper: Intertemporal Movie Distribution: Versioning when customers can buy both versions (2011)
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