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Screen Survival of Movies at Competitive Theaters: Vertical and Horizontal Integration in a Spatially Differentiated Market

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  • W. Wayne Fu

Abstract

This article empirically examines the effects of vertical integration and horizontal control on the exhibition of films at competing theaters in a market in which some theater owners are integrated into film distribution and others are not. It analyzes the duration of the exhibition runs of movies released by distributors who owned no theaters in Singapore during 2002 and 2003 through a survival model. The estimation shows that films released by these distributors are exhibited for shorter periods in distributor-owned theaters than in independently owned (i.e., unintegrated) theaters, and in theaters that belong to large theater chains than in the theaters of small theater chains. A spatial aspect of competition among theaters with different owners is revealed in the finding that a film is more likely to stay on at the theater at a given time when an adjacent rival theater still runs the same title. The increase in the probability of screen survival due to the spatial rivalry is greater the nearer the competing theater. These results are found when both film and theater-specific variations are controlled for.

Suggested Citation

  • W. Wayne Fu, 2009. "Screen Survival of Movies at Competitive Theaters: Vertical and Horizontal Integration in a Spatially Differentiated Market," Journal of Media Economics, Taylor & Francis Journals, vol. 22(2), pages 59-80.
    • Handle: RePEc:taf:jmedec:v:22:y:2009:i:2:p:59-80
    DOI: 10.1080/08997760902900072
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    References listed on IDEAS

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    1. Michael H. Riordan & David J. Salant, 1994. "Exclusion and Integration in the Market for Video Programming Delivered to the Home," Papers 0051, Boston University - Industry Studies Programme.
    2. David Waterman & Andrew Weiss, 1997. "Vertical Integration in Cable Television," Books, American Enterprise Institute, number 52923, September.
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    Cited by:

    1. Chung, Hoe Sang & Kim, Min & Yi, Gihwan, 2018. "Screening decisions of vertically integrated theaters in the Korean movie industry," Economics Letters, Elsevier, vol. 170(C), pages 6-9.
    2. Jaedo Choi & Yun Jeong Choi & Minki Kim, 2017. "Vertical Foreclosure with Product Choice and Allocation: Evidence from the Movie Industry," Working papers 2017rwp-107, Yonsei University, Yonsei Economics Research Institute.
    3. Legoux, Renaud & Larocque, Denis & Laporte, Sandra & Belmati, Soraya & Boquet, Thomas, 2016. "The effect of critical reviews on exhibitors' decisions: Do reviews affect the survival of a movie on screen?," International Journal of Research in Marketing, Elsevier, vol. 33(2), pages 357-374.
    4. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    5. Dapeng Liu & Pascal Courty, 2022. "Some economics of movie exhibition: increasing returns and Imax revenue premium," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(4), pages 597-634, December.
    6. Seulgi Yoo & Seonghoon Jeon, 2022. "The Effects of Vertical Integration in the Korea Movie Industry: Efficiency Versus Exclusion," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 61(3), pages 279-296, November.
    7. Kim, Hyunchul & Park, Minsoo & Lee, Sangwoo, 2017. "Do vertically and horizontally integrated firms survive longer? The case of cable networks in Korea," Information Economics and Policy, Elsevier, vol. 39(C), pages 84-93.
    8. In Kyung Kim & Vladyslav Nora, 2020. "Does vertical integration enhance non-price efficiency? Evidence from the movie theater industry," Review of Economic Design, Springer;Society for Economic Design, vol. 24(3), pages 143-170, December.
    9. Yu-Hsi Liu & Darlene C. Chisholm & George Norman, 2023. "Product-Line Decisions and Rapid Turnover in Movie Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(4), pages 341-365, June.
    10. Yubin Yang & Seungyoup Choo & Seong-Joon Limb, 2023. "Vertical Integration Strategies and Environmental Uncertainty: China’s Film Industry," SAGE Open, , vol. 13(1), pages 21582440231, February.

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