Now showing in digital

This thesis explores the implications of digital movie exhibition in the United States movies produced and distributed by major studios and independent studios. Over the last 15 years almost all cinemas in the United States have been digitized. Instead of projecting on 35mm projectors, movies are now screened in a digital media format. The thesis develops key characteristics of digitized exhibition which are put in context with previous innovations in the theatrical exhibition market. The dataset for the empirical analysis utilizes weekly box office reports of the United States for a period of 15 years and additional data about the theatrical market of the United States. The emphasis of the empirical analysis lies in investigating the supply dynamics of the exhibition industry. The supply dynamics are defined through the product life cycle and the volatility in the programming of cinemas. Furthermore, effects on the market concentration according to gross revenues in the box office are analyzed. Empirical results indicate that the digital transition in the exhibition industry has had a positive effect on the supply dynamics for motion pictures produced by major studios. Independent movies are not profiting from digitized exhibition yet which is also reflected in an increasing market concentration of the motion picture sector in the United States.