(A) study on the impact of SP release on the total movie sales including VOD and theater

Abstract

As digital movie distribution channels have diversified and gained their power over the traditional box-office, there have been heated arguments around the impact of the digital movie release on the traditional theatrical revenue. This study focuses on examining whether the early home digital releases have a negative influence on the box-office revenue in the Korean movie market. We analyze the box-office data of Korea provided by the Korean Film Council (KOFIC) and VOD sales data from a domestic home video provider from January 2015 to December 2018 using the difference-in-difference (DD) method. Our results show that the availability of SPVOD does not harm the theatrical performance, yet rather has a significantly positive impact. Moreover, this positive impact of SPVOD on the theatrical performance does not notably vary by movie-specific characteristics such as review, genre, rating, and studio. With a thorough descriptive analysis on the VOD sales of SPVOD offered titles, we observe an economically significant increase in overall total sales of movies in both theater and VOD channel when SPVOD is available.