Product Differentiation and Film Programming Choice: Do First-Run Movie Theatres Show the Same Films?

We present an empirical analysis of product differentiation using a rich new dynamic panel data set on film programming choice in a major U.S. metropolitan motion-pictures exhibition market. These data allow us to investigate the determinants of strategic product differentiation in a multicharacteristics space. We find evidence of stability in the degree of product differentiation over time, but also find that the degree of product differentiation between theatre pairs reflects a balance between strategic concerns and contractual constraints. Similarity in one dimension is offset by differentiation in others. Finally, we find that theatres under common ownership make more similar programming choices than theatres with different owners.