Cinema economics

This chapter provides a framework for introducing the economics of cinema to students new to the field. The authors focus their discussion on cinematic exhibition and post-cinematic release strategies and platforms. The financial performance of a film during its theatrical run is subject to the long-tail phenomenon: relatively few films are ‘blockbuster’ hits in the cinema. The experience-good nature of films influences a studio’s cinematic release strategy. Studios use windowing strategies for releasing films in cinemas, and via other channels, including digitally, through subscription services and video on demand. The authors present the concept of price discrimination, and the significance of digital piracy, in this context. Suggested classroom exercises and essay questions draw on students’ familiarity with viewing film content both in cinemas and via digital platforms.