Identifying the Effect of Seasonal Industry-Wide Promotion Campaigns: Evidence from the French Movie Industry


We investigate the effects of seasonal industry-coordinated promotion sales events on movie demand in French cinemas spanning from 2001 to 2012. Employing a structural estimation approach, we identify and we disentangle the impact of these seasonal promotions on movie demand from seasonal underlying movie demand, competitive effects, and weather shocks. We use a modified nested logit model that considers capacity constraints (due to the fixed number of screens) in movie theaters to mitigate the risk of overestimating market expansion resulting from these promotions. Our findings reveal that these industry-wide promotions lead to a 20% increase in overall demand. However, due to an average price decrease of 40%, they do not demonstrate profitability. Additionally, we explore various characteristics associated with these promotions, including pre- and pro-promotion dips, interactions with revenue decay, and sensitivity to different price reduction magnitudes. Furthermore, we analyze the optimal release strategy relative to these seasonal promotions and discuss implications for optimizing seasonal promotion campaigns.


Andreea Enache - Stockholm School of Economics
Christophe Bellégo - CREST: Center for Research in Economics and Statistics