The impact of screen digitization on ticket sales : the case of Argentine cinemas

Abstract

The late 2000’s were a period of major technological innovation in the cinematographic industry, since digitization affected the entire value chain, ranging from production to distribution and exhibition activities. This paper focuses on the effect of digitization on exhibition by studying the impact of digitizing a screen on ticket sales. I perform a difference-in-differences estimation, exploiting the fact that not all screens were digitized simultaneously. Variability along time and between screens allows us to identify a causal effect. I find that digitized screens sell on average 22.2% more tickets. Furthermore, this effect was mostly attributable to 3D screens, given that 2D screens did not have a statistically significant effect on ticket sales.