TIME CONSISTENCY AND SELLER COMMITMENT IN INTERTEMPORAL MOVIE DISTRIBUTION: AN EMPIRICAL STUDY OF THE VIDEO WINDOW

Notes on the Journal of Industrial Economics Website: http://www.essex.ac.uk/jindec/

Authors


  • *We thank Home Media Retailing (formerly Video Store Magazine) and A.C. Neilsen for providing data. Michael Baye, Paris Cleanthous, Liran Einav, Shane Greenstein, Tong Li, Tom Lyon, Eric Rasmusen, and participants in presentations at the International Industrial Organization Conference, the American Economic Association Annual Meetings, and Telecom Paris Tech provided valuable comments on earlier versions of the paper. More extensive analysis and citations are available in Waterman, Weiss and Lee [2008]. See also Waterman [2005].

Abstract

We study the determinants of the ‘video window’ (the interval between a movie's theatrical and video releases), based on a sample of 1,157 films released on video between 1988 and 1997. For subsets of films having shorter theater run lengths (1 to 17 weeks), windows were generally longer than, and largely invariant to, measures of the time required to exhaust the theater market. One interpretation of our results is that U.S. movie distributors resolved a time consistency problem by coordinating their behavior to maintain longer windows than would have otherwise resulted, but different explanations are also plausible.

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