Strategic Microscheduling of Movies

Abstract

We investigate how competition in product niches affects the ultimate timing of product release for experience goods using data on motion pictures in the United States. We identify product niches that movies occupy along three different product dimensions: common actor, common director, and common genre. We estimate the drivers for a motion picture's weekly sales based on the variation in the level of competition in these particular niches over time. We show that release date of motion pictures are more likely rescheduled when there is more competition during the initially proposed release week. Next, we find that competition from movies by the same director or within the same movie genre decrease motion picture's box office revenue most. Finally, we compare a movie’s actual sales to estimated sales at the originally planned release date. Rescheduled movies generate about $6 million more revenue than they would have at their originally proposed release date.

Keywords: Non-Price Competition, Niche Competition, Strategic Timing of Entry, Movie Market

JEL Classification: D22, L21, L82, M31