Congestion and Market Expansion: Timing of New Movie Releases in Paris Theaters

Department of Economics and Decision Sciences

Speaker : Andreea Enache (SSE)

Room T-007

Abstract: 

We use a unique dataset on movie ticket sales in the French movie theaters to structurally estimate the seasonal underlying movie demand, while accounting for competition effects, weather shocks and seasonal sale promotions campaigns. We use a three-level nested logit that allows us to accurately estimate the underlying demand by movie genre and find a significant inter-movie genres competition. Moreover, we control for the congestion in movie theaters and highlight the existence of a trade-off between the demand expansion for movies and the business stealing effect between different movie genres due to the limited availability of screens in a movie theater. We use the estimated model to predict the movie revenues in various scenarios and we provide recommendations for optimal time release for movies. We also discuss the implications for the theater's strategy of movies portfolio diversification given the estimated substitution patterns between different genres.  

Joint work with Christophe Bellégo