The Role Of Revenue Sharing In Movie Exhibition Contracts

Provided by: University of Michigan (Ross)
Topic: Software
Format: PDF
This paper examines the nature of contracts in the movie exhibition industry, where contracts are both movie and theater specific, and entail revenue-sharing terms that change over time within the contract period and no fixed fees. This paper argues that the structure of these contracts is best explained by the distributors' desire to devise relatively simple pricing formulas that extract downstream exhibition profits while maintaining exhibitor incentives to keep the movie on the screen. They test the implications of this simple price discrimination argument for revenue sharing in this industry using detailed information from Spanish distribution contracts.

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