Product Differentiation and Film Programming Choice: Do First-Run Movie Theatres Show the Same Films?
36 Pages Posted: 20 Nov 2006 Last revised: 21 Jan 2022
Date Written: October 2006
We present an empirical analysis of product differentiation using a new dynamic panel data set on film programming choice in a major U.S. metropolitan motion-pictures exhibition market. Using these data, we compute two measures of film programming choice which allow us to investigate the determinants of strategic product differentiation in a multi-characteristics space. Our evidence is consistent with the idea that the degree of product differentiation between theatre pairs reflects a balance between strategic concerns and contractual constraints. Similarity in one dimension is offset by differentiation in others. Finally, we find that ownership matters: theatres under common ownership make more similar programming choices than theatres with different owners.
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