Content Distribution in the Netflix Era: Contingency-based Revenue Maximization Across Channels for Filmed Home Entertainment
(A2022-107472)

AUTHORS

Paul-Vincent Mayr, Chair of Marketing & Media | Westfälische Wilhelms-Universität Münster; Ronny Behrens, WWU Münster, Germany; Thorsten Hennig-Thurau, University of Münster; Raoul Kübler, Marketing Center Münster

ABSTRACT

The rise of online subscription services (OSS) like Netflix disrupts decades-long business models of film studios and brings uncertainty regarding its impact on established transactional channels when integrated in a film’s distribution strategy. To understand this effect and maximize total HE revenues for rights owners, the authors develop an informed contingency model (ICM) for film distribution across transactional and subscription channels, accounting for time-, channel-, product-, and customer-specific contingencies, and estimate the model applying fixed-effects panel regression for weekly DVD/Blu-ray revenues for all 1,859 theatrically released films between 2011 and 2018 in Germany. Results show substantial cannibalization when a film is available on OSS and reveal strong contingency effects across all four categories. Simulations indicate that despite the strong cannibalization, OSS can become an important complementary revenue stream for the majority of films.