wildstriker
Active member
Can someone explain what an ancillary market is?
What is an ancillary market?
- Thread starter wildstriker
- Start date
What I found: http://www.museum.tv/eotvsection.php?entrycode=ancillarymar
A bit dated with "cassette" rental and no VOD but seems like a generally good explanation.
"In the American television industry the term "ancillary markets" generally refers to markets for feature films created by new television technologies.
Before television, American films played only in motion picture theaters, and the only ancillary markets were found in theaters in international markets around the world. But the rise of commercial television in the 1950s and of pay cable and home video in the 1980s created additional venues for Hollywood product.
Today, a feature film first opens in motion picture theaters to establish its box-office value and critical reputation. It is then released to ancillary markets in the following order:
(1) home video (videocassette rental);
(2) pay cable (premium cable services such as HBO, Showtime, and Cinemax);
(3) network television;
(4) cable television; and
(5) television syndication.
This distribution pattern is designed to maximize the full economic potential of each market, or "window" as it is called in the trade. With the exception of home video, which has a window that remains open almost indefinitely, a new feature is exploited in one market at a time. In each window, the price paid by the consumer to view the picture drops. Economists call this process price tiering: a film is first released to theaters where it is viewed for a period of months at top prices by "high value" consumers, i.e., to those who are most anxious to see the film and are willing to pay $7 and more for a ticket. The film is then released at contractually specified intervals to "lower value" consumers at prices that decline with time. A consumer willing to wait two to three years to view a film can finally receive it "free" over network television. Thus, the distribution pattern taps every segment of the market in an orderly way and at a price commensurate with its demand."
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A bit dated with "cassette" rental and no VOD but seems like a generally good explanation.
"In the American television industry the term "ancillary markets" generally refers to markets for feature films created by new television technologies.
Before television, American films played only in motion picture theaters, and the only ancillary markets were found in theaters in international markets around the world. But the rise of commercial television in the 1950s and of pay cable and home video in the 1980s created additional venues for Hollywood product.
Today, a feature film first opens in motion picture theaters to establish its box-office value and critical reputation. It is then released to ancillary markets in the following order:
(1) home video (videocassette rental);
(2) pay cable (premium cable services such as HBO, Showtime, and Cinemax);
(3) network television;
(4) cable television; and
(5) television syndication.
This distribution pattern is designed to maximize the full economic potential of each market, or "window" as it is called in the trade. With the exception of home video, which has a window that remains open almost indefinitely, a new feature is exploited in one market at a time. In each window, the price paid by the consumer to view the picture drops. Economists call this process price tiering: a film is first released to theaters where it is viewed for a period of months at top prices by "high value" consumers, i.e., to those who are most anxious to see the film and are willing to pay $7 and more for a ticket. The film is then released at contractually specified intervals to "lower value" consumers at prices that decline with time. A consumer willing to wait two to three years to view a film can finally receive it "free" over network television. Thus, the distribution pattern taps every segment of the market in an orderly way and at a price commensurate with its demand."
MORE