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Coming Soon: A Theater Near You

Coming Soon: A Theater Near You. Case Assignment April 12, 2002. Economic Relationship Between Theaters and Studios. Nature of the relationship between studios and theaters Bargaining points Bargaining strength. Holdup in the Relationship Between Studios and Theaters. What is holdup?

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Coming Soon: A Theater Near You

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  1. Coming Soon: A Theater Near You Case Assignment April 12, 2002

  2. Economic Relationship Between Theaters and Studios • Nature of the relationship between studios and theaters • Bargaining points • Bargaining strength

  3. Holdup in the Relationship Between Studios and Theaters • What is holdup? • Where does it appear in the relationship? • Bargaining strength of the two parties? • Strategies? • Studios? • Exhibitors?

  4. Stability of the Relationship • Expectations of return on investments • Contingent payout arrangements in gross receipts formulas • Renegotiation clauses for entire contracts • Should theaters renew and upgrade their investments? • Digital projection • New attractive theaters • Have exhibitors upgrades? Why?

  5. Vertical Integration • Forward integration by the studios • Pros – economic reasons • Cons – economic reasons • Long term strategy: Integrated or not? • Backward integration? What would it look like?

  6. Risk • Risk borne by the theaters? • Risk borne by the studios? • How is the risk shared?

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