The competitive dynamics of new DVD releases

• Main Authors: MUKHERJEE, Anirban, KADIYALI, Vrinda
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: Marketing
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/5254; https://ink.library.smu.edu.sg/context/lkcsb_research/article/6253/viewcontent/The_competitive_dynamics_of_DVD_release_timing_and.pdf
• Institution: Singapore Management University

In the U.S. motion picture industry, DVDs are increasingly a major source of revenue for moviestudios. Two important strategic decisions for DVDs are the release date and price. Industry evidencesuggests studios consider various release options as evidenced by their pre-release announcements. Whendeciding DVD release dates and prices, studios must consider the following. First, weeks of high demandpotential, increase sales. Second, intense competition in weeks of peak demand might reduce marketshare, lower margins and lead to higher costs of release. Third, deferring a DVD release (e.g. to a nonpeakdemand week) after the movie’s theatrical run reduces the potential sales of the title. So how doesthe competitive equilibrium of release dates and prices evolve?