Leasing and selling: optimal marketing strategies for a durable goods firm
Management Science
A Multichannel Model of Separating Equilibrium in the Face of the Digital Divide
Journal of Management Information Systems
Information Goods and Vertical Differentiation
Journal of Management Information Systems
Research Note---When Is Versioning Optimal for Information Goods?
Management Science
When Is Price Discrimination Profitable?
Management Science
Information Goods vs. Industrial Goods: Cost Structure and Competition
Management Science
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We study a model of film distribution and consumption. The studio can release two goods, a theatrical version and a video version, and has to decide on its versioning and sequencing strategy. In contrast with the previous literature, we allow for the possibility that some consumers may watch both versions. This simple extension leads to novel results. It now becomes optimal to introduce versioning if the goods are not too substitute for one another, even when production costs are zero (pure information goods). We also demonstrate that the simultaneous release of the versions (“day-and-date” strategy) can be optimal when the studio is integrated with the exhibition and distribution channels. In contrast, a sequential release (“video window” strategy) is typically the outcome when the studio negotiates with independent distributors and exhibitors.