Abstract
Digital broadcast technologies have expanded the virtual capacity of live performing arts venues, but they have also raised concerns about possible cannibalisation of box office revenues. We report the results of a quasi-field experiment involving the Royal National Theatre’s live broadcasts of theatre to digital cinemas in the UK and find that, if anything, live broadcasts generate greater, not fewer, audiences at the theatre.
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Notes
Previous studies of the cannibalisation phenomenon have examined: the effects of increased TV and radio penetration on film and music sales (Liebowitz 2004); the effects of film rentals on film sales (Knox and Eliashberg 2009); the effects of PDF copies of books on demand for print copies (Kannan et al. 2009); and the effects of digital piracy on music and film sales (Smith and Telang 2012).
Strictly satellite transmission is not a ‘broadcast’, as only designated cinemas are able to receive it. However, the term ‘broadcast’ is widely used to describe this type of transmission.
What is considered ‘local’ will of course vary from consumer to consumer. In an in-depth study of the geography of cinema-going in Leicester, for example, the share of the audience claiming they visited a cinema because it was their nearest varied from 74 per cent to 4 per cent depending on the screen (Hubbard 2002). In this study, we make the plausible assumption that, on average, individuals are far more likely to go to a cinema that is in their postcode district than if it is not.
We have described this methodology as a quasi-experiment because the 70 cinemas were not randomly selected. However, the participating cinemas, once their distance to the NT’s base at London’s South Bank is allowed for, were not selected on the grounds that local audiences were more or less likely to opt for cinema screenings relative to seeing the production at the NT itself. In fact, the list of participating cinemas was agreed with the authors precisely to introduce a valid experimental design (Bakhshi and Throsby 2010). In other words, from the viewpoint of the cannibalisation hypothesis, which audiences were de facto given a choice of distribution outlet and which were not was an exogenous matter.
In principle, this could also reflect the possibility that individuals who had seen the NT Live screenings were then persuaded to go to the NT to see the play. However, in the audience surveys we found that only a very small number of NT audience members had in fact done so (Bakhshi and Throsby 2010).
In a small number of cases individuals made multiple bookings for the play. Where these bookings were made on the same date for the same performance, we treated the booking as a single booking. In cases where multiple bookings were made on different dates for the same performance, we removed all bookings other than the first from the data set. In cases where multiple bookings were made on different dates for different performances we treated these multiple bookings as different unique bookings. We then removed all non-UK bookings from the data set.
This excludes the Channel Isles and some non-residential postcodes in England and Wales.
To allow for any seasonal differences in the postcode distribution, and to ensure consistency with the data for Phèdre and After Life, the results reported here are for models where we included only bookings for performances for Never So Good from June 4th. However, the results were not sensitive to doing this.
Estimations using OLS yielded qualitatively similar results.
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Acknowledgments
We thank Albert Bravo-Biosca for valuable suggestions on the estimation and Veronica Meyer for her research assistance. We also acknowledge with gratitude the cooperation of staff at the National Theatre, London, in the conduct of the research on which this paper is based. Nesta funded the research on which this paper is based. All view expressed in this paper are solely those of the authors.
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Bakhshi, H., Throsby, D. Digital complements or substitutes? A quasi-field experiment from the Royal National Theatre. J Cult Econ 38, 1–8 (2014). https://doi.org/10.1007/s10824-013-9201-2
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DOI: https://doi.org/10.1007/s10824-013-9201-2