Congestion and Market Expansion: Timing of New Movie Releases in Paris Theaters

Organised by

• Department of Economics

We use a unique dataset on movie ticket sales in the French movie theatres to structurally estimate the seasonal underlying movie demand, while accounting for competition effects, weather shocks and seasonal sale promotions campaigns. We use a three-level nested logit that allows us to accurately estimate the underlying demand by movie genre and find a significant inter-movie genres competition. Moreover, we control for the congestion in movie theaters and highlight the existence of a trade-off between the demand expansion for movies and the business stealing effect between different movie genres due to the limited availability of screens in a movie theater. We use the estimated model to predict the movie revenues in various scenarios and we provide recommendations for optimal time release for movies. We also discuss the implications for the theatre's strategy of movies portfolio diversification given the estimated substitution patterns between different genres.

Co-author: Christophe Bellégo (Head of Public Statistics and Economic Studies at the General Directorate of Public Finances in Paris)