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What’s Now? Chapter 10 – Changes coming to movie distribution

moviepopcornThe What’s Next? box in chapter 10, “Bits and bytes need distribution, too” describes how digital products require many of the same regrouping activities as physical goods. Sean Parker (best known for starting Napster and later as the first president of Facebook) has developed a new product (Screening Room), which would “allow people to watch movies at home on the same day they make their big-screen debuts.” The Screening Room is shaking up Hollywood which is used to a gradual evolution in distribution channels. Most movies play in theaters (where consumers pay relatively higher prices) for their first few months, before moving to lower price channels for example, DVD, premium cable (HBO, Cinemax, etc.) then Netflix and other streaming services — before possibly coming to commercial television. Read more about how Screening Room is creating problems in movie distibtion in “Is Sean Parker’s Screening Room the End of Movie Theaters?” (Daily Beast, March 16, 2016).

In this “What’s Now?” we want you to consider the traditional movie distribution model. Through what type of channel are movies typically distributed (see Exhibit 10-3)? Explain your answer. How does market exposure change over time with movie distribution? Explain your answer. Finally, these changes appear to be leading to channel conflict — another topic of chapter 10. What type of channel conflict is being created? Explain your answer. 

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