Do Moviegoers Prefer Bigger Screens, or More Choice?

Whether customers value quality over convenience is a constant question for many businesses. For movie-theater owners, the issue is whether customers prefer bigger, higher-quality screens or smaller screens with a greater variety of show times.

Chicago Booth’s Anita Rao and Stanford’s Wesley R. Hartmann focus on moviegoers’ preferences in the densely populated cities of India, where recent economic growth has led to a boom in movie-theater construction, particularly of multiplexes showing the same film on several small screens. The preponderance of multiplexes would have one believe that Indian moviegoers prefer convenience to quality, but Rao and Hartmann’s research reveals the answer is not so simple.

The researchers collected data from 14 markets and seven theater chains across India, examining consumer choices made for nearly 600 film screenings over the course of 44 weeks. In analyzing the data, Rao and Hartmann took into account differences in a movie’s ticket price, the length of its release, and its language; a theater’s location and chain affiliation; and the demographics of theatergoers, including education, employment status, and urban versus suburban residency.

Overall, the researchers find that adding one more show time had a greater impact on ticket sales than increasing screen size, a finding that justifies the decision many Indian theater chains have made in shifting to multiplexes. But when Rao and Hartmann home in on demographic data, they uncover market-specific preferences that tell a different story: urban markets with a larger number of more-educated consumers showed a preference for wider screens, while markets with less-educated consumers preferred a greater variety of show times.

Although digital technology makes it easy for theaters to play the same movie on multiple screens at relatively low cost, that choice is not universally the right one. Using demographic data to isolate which markets prefer the quality of a bigger screen to the convenience of more show times can help marketers attract more customers and sell more tickets, according to Rao and Hartmann. Their results are a good reminder to marketers that the big picture may not tell the whole story.