ECON 414 Netflix and Redbox On Video Rentals Questions
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This week, do the case exercise on page 381, regarding Netflix and Redbox on video rentals. Answer the five questions presented, but I want us to examine another aspect of the business too. Movie theaters are in a tough spot. They have virtually NO control over their product! They have to show what the studios create, and they have to pay for the privilege. Read up on movie distribution deals here: https://entertainment.howstuffworks.com/movie-distribution.htm
In addition to questions 1-5, I want you to think about the following:
6. The DVD market, both in rentals and in purchases after the screening, has absolutely COLLAPSED with the advent of digital streaming. This used to be a reliable revenue stream for studios – and now it’s all but disappeared. How might we expect this to change the movies that get made and the experience (including prices…) at the theater?
7. Imagine you own a small chain of movie theaters. How do you plan to react to the changing marketplace? What are you going to do in order to keep customers coming back, with the wealth of entertainment options available to them and the changing studio landscape? What are you going to do with prices, offerings, etc?
8. What do you think the future of studio releases and movie exhibition will look like? What trends do we see today that might chance the landscape in the next 5-10 years? How will studios, theaters, and consumers react to those changes?
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