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Abstract
We examine the theatrical market for motion pictures in Thailand using a sample of films exhibited in 2004-2008. Using data on weekly and cumulative film revenues, we find strong evidence of increasing returns to information as indicated by substantial concave departures from the Pareto size distribution. The distribution of cumulative revenues across films is consistent with the winner-take-all nature of an elimination tournament. In contrast to other markets dominated by Hollywood imports, several of the top-earning films in Thailand are domestically produced.
Key words: Thai film industry; returns to information; winner-take-all; heavy tails
JEL classification: L82
(ProQuest: ... denotes formulae omitted.)
1. Introduction
This short paper presents a preliminary empirical analysis of the theatrical market for motion pictures in Thailand. The Thai theatrical movie market is particularly interesting due to the competition between domestically produced films and imported foreign films, particularly Hollywood films. (Other film industries-in particular those in India and South Korea-would also appear to be excellent settings in which to study competition between domestic and imported films.) It is well known that US-produced films have become increasingly dominant in the world market with the Hollywood-based motion picture industry overwhelming nearly every other national cinema (Miller et al., 2008, Waterman, 2005). At the same time non-US markets have become increasingly important to Hollywood: The Motion Picture Association of America estimates that in 2007 the North American box-office gross was $9.6 billion and that the international box-office gross was $17.1 billion (Motion Picture Association of America, 2007). We find in our empirical analysis of the Thai movie market that domestically produced films are remarkably competitive with Hollywood films, both in terms of opening-week box-office revenue and in terms of cumulative box-office revenue. This is a relatively new phenomenon in the Thai movie market.
Domestic Thai film production hovered around 60 to 80 films per year during the 1960s. Film production increased throughout the 1970s, peaking immediately after the government raised the import tax for foreign movies in 1977. Figure 1 plots annual Thai film production for the interval 1970-2005. Changes in Thai government policies and in the release strategies of Hollywood film distribution companies, together with the rise of television and alternative forms of entertainment, led to the decline of the Thai...