DSAIG Seminars
Vertical Integration, Movie Screening, and Theatrical Performance
| Abstract: | In Mainland China, vertical integration between producers/distributors and exhibitors is quite common in the motion picture industry. For instance, a producer or distributor can have a significant equity interest in an exhibitor, and vice versa, or a producer or distributor and an exhibitor are owned by a large parent company. This study examines the effects of vertical integration on exhibitors’ movie screening decisions and theatrical performances. We conduct our empirical analysis on a sample of 100 movies released in the first half of 2016. Daily screening and theatrical performance data such as box office revenue and number of moviegoers are collected for the top 20 theater chains in the market. We find that exhibitors favorably allocate more screens to integrated movies, whose producers or distributors have vertical integration relationships with the exhibitors. However, integrated movies attract less audience and bring in less box office revenues (either daily total or average per screen). This result is surprising because vertical integration is often used to facilitate market foreclosure and gain monopoly power. Our findings imply that the opportunity cost associated with selective screening due to vertical integration may outweigh its benefit. |
| Date: | Apr 11 (Wed), 2018 12:30 pm - 2:00 pm |
| Time: | 12:30PM - 2:00PM |
| Speaker: | Dr. Hailiang CHEN |
| Venue: | Room 14-222, 14/F, Lau Ming Wai Academic Building, City University of Hong Kong |
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