Week 2: Price Discrimination - Temporal Discrimination

Question 1

Temporal Discrimination

Answer 1

price discrimination based on how long you have to wait to access the product

Question 2

Temporal discrimination example

Answer 2

you can see a newly released movie in theaters for a higher cost or wait until it is available for streaming free or at a lower cost

Question 3

How do studios make more money?

Answer 3

By gradually lowering the price

Question 4

Video Release Window

Answer 4

the length of time between a movie appearing in theaters and appearing on a home video format

Question 5

What is an issue faced by producers who hope to employ this time of discrimination?

Answer 5

the more desirable you make the bargain edition, the more you’ll cut sales of normal or deluxe editions

Question 6

Explain some different strategies studios tried with the video release window during COVID

Answer 6

-one model was to release in theaters, then keep the window between home release

-another model was day and date release, typically offered as $20 premium access on streaming services the day the movie was released (e.g Premium Disney + with Black Widow)

-other studios tried to release in theaters but had day and date access free to subscribers of the streaming platform (e.g. Dune on HBO)

Question 7

What was the controversy with the day and date strategy Disney + used with Black Widow?

Answer 7

Scarlett Johansson sued Disney+ and argued that it benefits them because it sold more Disney+ premium subscriptions but cut her box office earnings

Question 8

How did video release window preferences vary between theaters and studios?

Answer 8

theaters want longer window because they rely on ticket and vending sales, while studios want shorter periods