In the first chapter I talk about the estimation of the degree of substitution and complementarity in DVD/Blu-ray and theatrical channels. Movies are distributed through multiple, carefully segmented channels. Movies are first released in theaters, and then released in home entertainment products. In recent years, movie studios have been pushing to expedite the release of DVD/Blu-ray discs and home videos at the expense of theaters. However, sacrificing the theatrical channel might backfire if

more »

... dditional theatrical viewership would have exerted a strong promotional influence on subsequently released home entertainment products. To estimate the causal effect of additional theatrical viewership on home entertainment product demand, we leverage snowstorms' adverse impact on consumers' propensities to watch a movie in theaters. Exploiting this source of exogenous variations in theatrical viewership with a nonparametric simultaneous equations model, we find that additional theatrical viewership has a positive and economically substantive impact on the sales of home entertainment products. This finding indicates that the promotional effect outweighs cannibalization. In other words, the theatrical channel is a complement to the home entertainment channel. We also find that the degree of complementarity is weaker for horror movies and stronger for family-oriented movies, suggesting that a movie's suitability for gifting and appeal for repeated consumption are important moderating factors. Our finding that theaters complement home entertainment products challenges the conventional wisdom in the movie industry and cautions against a drastic quickening of DVD/Blu-ray disc and home video releases. In the second chapter I discuss the estimation of the effect of piracy on worldwide theatrical demands and its implication for international release scheduling. International markets have become a significant contributor to Hollywood movie revenue in recent years. Widespread adoption of new projection technology has enabled movie s [...]