Movie Release Dates: Who Blinks First?

Adam CruseBrad HirschKrunch KloberdanzBrawley ReishmanAndy Ward

January 23, 2003

Rules of the Game

The date of a movie’s release impacts profitability Historically, major movies released during the holiday season

gross more than movies released during any other time of the year

We (Warner Bros.) face a crowded holiday market Two competitors are also ready to release their films Neither we nor our competitors has announced a release date When to release?

– Holidays (Nov. 15 – Dec. 31)– Post – Holidays (Jan. 1 – Feb. 15)– Later (Feb. 15 – Nov. 15)

Percentage Payoffs

120% 85% 60%

115% 138% 98% 69%

71% 86% 61% 43%

100% 120% 85% 60%

Number of Competitors’ Films Released During the Same Period

0 1 2Release

Date

HolidaysPost-HolidayLater

Percentage of average revenue expected

Game Analysis

Warner Bros.

WB NL P WB NL P WB NL P

Holiday Launch 517 458 474 733 567 671 733 795 671

Launch in Jan/Feb 733 649 586 1,035 402 415 1,035 795 586

Launch Later 733 649 822 1,035 567 822 1,035 563 582

Warner Bros.

WB NL P WB NL P WB NL P

Holiday Launch 641 649 671 454 402 947 641 795 947

Launch in Jan/Feb 454 916 415 320 284 293 454 795 415

Launch Later 641 916 822 454 402 822 641 563 582

Warner Bros.

WB NL P WB NL P WB NL P

Holiday Launch 897 649 671 897 567 947 636 563 947

Launch in Jan/Feb 897 916 586 897 402 415 636 563 586

Launch Later 636 916 582 636 567 582 449 397 411

Paramount

Paramount

New Line

Launch during Holidays

Launch during Jan/Feb

New Line

Holiday Launch Launch in Jan/Feb Launch Later

New Line

Holiday Launch Launch in Jan/Feb Launch Later

Holiday Launch Launch in Jan/Feb Launch Later

Paramount

Launch Later

Game Analysis

Warner Bros.

WB NL P WB NL P WB NL P

Holiday Launch 517 458 474 733 567 671 733 795 671

Launch in Jan/Feb 733 649 586 1,035 402 415 1,035 795 586

Launch Later 733 649 822 1,035 567 822 1,035 563 582

Warner Bros.

WB NL P WB NL P WB NL P

Holiday Launch 641 649 671 454 402 947 641 795 947

Launch in Jan/Feb 454 916 415 320 284 293 454 795 415

Launch Later 641 916 822 454 402 822 641 563 582

Warner Bros.

WB NL P WB NL P WB NL P

Holiday Launch 897 649 671 897 567 947 636 563 947

Launch in Jan/Feb 897 916 586 897 402 415 636 563 586

Launch Later 636 916 582 636 567 582 449 397 411

Paramount

Paramount

New Line

Launch during Holidays

Launch during Jan/Feb

New Line

Holiday Launch Launch in Jan/Feb Launch Later

New Line

Holiday Launch Launch in Jan/Feb Launch Later

Holiday Launch Launch in Jan/Feb Launch Later

Paramount

Launch Later

Conclusions

Warner Brothers is facing a game of chicken. In order to break the simultaneous game they

must move first and signal a later launch. This move forces the other two into a holiday

launch. The payoff for Warner Brothers: $897,000!