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When to Exit a Product: Evidence from the U.S. Motion-Pictures Exhibition Market

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  • Darlene Chisholm
  • George Norman

Abstract

When is it optimal for a multi-product firm to exit a product? We analyze strategic product exit using data on motion-pictures exhibition choices in a major metropolitan first-run market to estimate the survivor function for films at a given theatre. This analysis indicates that a film’s survival at a particular theatre is affected by intra-firm relative performance and interfirm competitive pressures. We find that theatres within chains avoid business stealing. Preliminary analysis further suggests that theatres compete for market share with neighboring theatres by increasing the time to exit when the competing theatre is owned by a different chain.

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  • Darlene Chisholm & George Norman, 2005. "When to Exit a Product: Evidence from the U.S. Motion-Pictures Exhibition Market," Discussion Papers Series, Department of Economics, Tufts University 0522, Department of Economics, Tufts University.
    • Handle: RePEc:tuf:tuftec:0522
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    Cited by:

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    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. Karen Ruckman & Nilesh Saraf & Vallabh Sambamurthy, 2015. "Market Positioning by IT Service Vendors Through Imitation," Information Systems Research, INFORMS, vol. 26(1), pages 100-126, March.
    5. Darlene Chisholm & Margaret McMillan & George Norman, 2010. "Product differentiation and film-programming choice: do first-run movie theatres show the same films?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(2), pages 131-145, May.
    6. Charles B. Weinberg & Cord Otten & Barak Orbach & Jordi McKenzie & Ricard Gil & Darlene C. Chisholm & Suman Basuroy, 2021. "Technological change and managerial challenges in the movie theater industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 239-262, June.
    7. Ioannides, Yannis M. & Soetevent, Adriaan R., 2007. "Social networking and individual outcomes beyond the mean field case," Journal of Economic Behavior & Organization, Elsevier, vol. 64(3-4), pages 369-390.
    8. Gilbert Metcalf & Jongsang Park, 2007. "A comment on the role of prices for excludable public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(6), pages 685-698, December.
    9. Darren Filson & James H. Havlicek, 2018. "The performance of global film franchises: installment effects and extension decisions," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(3), pages 447-467, August.
    10. Gabriel Natividad, 2013. "Multidivisional Strategy and Investment Returns," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(3), pages 594-616, September.
    11. 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.
    12. Sofia Izquierdo‐Sanchez, 2019. "Managing The Supply Of Short‐Life Products. A Duration Analysis Approach Using The Uk Film Industry," Bulletin of Economic Research, Wiley Blackwell, vol. 71(1), pages 75-89, January.
    13. Darlene Chisholm & Víctor Fernández-Blanco & S. Abraham Ravid & W. David Walls, 2015. "Economics of motion pictures: the state of the art," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 39(1), pages 1-13, February.
    14. Ching, Andrew & Kawaguchi, Kohei & Liu, Jia & Yi, Zhang, 2023. "Consumer Responses to Favorite Product Removal: Evidence from Beverage Vending Machines," SocArXiv t34qj, Center for Open Science.
    15. 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.
    16. 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.
    17. Camerani, Roberto & Corrocher, Nicoletta & Fontana, Roberto, 2020. "It's never too late (to enter)… till it is! Firms’ entry and exit in the digital audio player industry," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    18. Caroline Elliott & Palitha Konara & Haiyi Ling & Chengang Wang & Yingqi Wei, 2018. "Behind film performance in China’s changing institutional context: The impact of signals," Asia Pacific Journal of Management, Springer, vol. 35(1), pages 63-95, March.

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