Revenue Sharing Vertical Contracts in the Movie Industry: A Theoretical Analysis

Q4 Business, Management and Accounting

Review of Marketing Science Pub Date : 2019-06-01 DOI:10.1515/roms-2019-0059

N. Baranchuk, Seethu Seetharaman, Andrei Strijnev

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引用次数: 5

Abstract

Abstract For many years, the movie industry has been characterized by a unique (compared to other industries) type of vertical contracting practice, called sliding-scale contracting whereby the distributor (studio) takes a much larger (usually around 70%) share of box-office revenues than the exhibitor (theater) in the week of a movie’s release, with the exhibitor’s share increasing, in gradual steps, over subsequent weeks. In this paper, we propose a game-theoretic model that provides a new rationale for these contracting choices. Specifically, we show that these contracts effectively resolve conflicts of interest between studios and theaters over movie release timing and display length, in a way that is beneficial for both parties. Our model also stipulates conditions under which sliding scale become dominated by aggregate deals, i.e. deals based on total rather than weekly box office revenue. The testable predictions based on these conditions can be used by future empirical research once the available evidence on the use of aggregate deals in practice goes beyond anecdotal.

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电影业收入分成纵向契约的理论分析

摘要多年来，电影业一直以一种独特的（与其他行业相比）垂直承包方式为特征，称为滑动规模承包，即在电影上映的一周，发行商（工作室）在票房收入中所占的份额比放映商（影院）大得多（通常在70%左右），放映商的份额也在增加，在接下来的几周里，循序渐进。在本文中，我们提出了一个博弈论模型，为这些合同选择提供了新的理论基础。具体来说，我们表明，这些合同有效地解决了电影公司和影院之间在电影上映时间和放映时间上的利益冲突，对双方都有利。我们的模型还规定了滑动规模由总交易主导的条件，即基于总票房收入而非每周票房收入的交易。一旦关于在实践中使用聚合交易的现有证据超出传闻范围，基于这些条件的可测试预测就可以用于未来的实证研究。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Marketing Science Business, Management and Accounting-Marketing

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The Review of Marketing Science (ROMS) is a peer-reviewed electronic-only journal whose mission is twofold: wide and rapid dissemination of the latest research in marketing, and one-stop review of important marketing research across the field, past and present. Unlike most marketing journals, ROMS is able to publish peer-reviewed articles immediately thanks to its electronic format. Electronic publication is designed to ensure speedy publication. It works in a very novel and simple way. An issue of ROMS opens and then closes after a year. All papers accepted during the year are part of the issue, and appear as soon as they are accepted. Combined with the rapid peer review process, this makes for quick dissemination.