The Challenge of the Unknown – The Effect of Pay-What-You-Want on the Market Success of Publicly Subsidized Films

Abstract

Producers and exhibitors often rely on or emphasize artistic and cultural merit to counter the economic non-viability of publicly-subsidized films. They fail to exploit innovative pricing and promotion mechanisms to increase market acceptance. Pay-what-you-want (PWYW) options, especially, could compensate for small advertising budgets. This option would allow exhibitors of independent films to compete with large chains more successfully. The results of an empirical study show that for relatively unknown films, which were represented by a surprise movie screening in the empirical investigation, pay-what-you-want options lead to higher satisfaction and higher self-generated revenues for subsidized movies than fixed ticket prices. PWYW may be considered a pricing tool to increase movie attendance and word-of-mouth multiplier effects for publicly-subsidized films. (English) [ABSTRACT FROM AUTHOR]