The U.S. Film Exhibition Industry: A Theoretical Framework and Its Implications

Abstract

The present study develops a theoretical framework of the final stages of the theatrical distribution supply chain: distribution, licensing and exhibition. The profit functions and decisions of three actors - distributors, exhibitors, audience - are explored and used to predict the terms of the exhibition contract, exhibition market structure and features of the exhibition market. Testing these predictions against the current exhibition industry using annual reports from distributor and exhibitor trade organizations, financial data from publicly held exhibitors, box office data, and articles from the popular press and literature prove the framework's ability to accurately predict features of the exhibition industry. The framework allows for a more complete understanding of the dynamics of each actor, which forces a reevaluation of other studies. The study offers a broad framework under which a wide variety of issues pertaining the exhibition industry can be explored. Further research should mathematically model the dynamics presented, and expand the framework to other aspects of the film exhibition industry.