• Journal of Digital Convergence
• /
• v.8 no.2
• /
• pp.103-114
• /
• 2010

People generally focus on the supply side when conducting a study on the movie industry. However, to understand the movie industry better, one needs to analyze both sides - the demand and supply of movies. This paper analyzes demand-side factors that have long been taken for granted in Korea's movie industry. The study used data for 1991~2008 on the following demand-factors : the average ticket prices, the number of working days and hours, the average personal income, the number of spectators for the two major professional sports, cable TV, the number of movies released each year and the number of movie screens. This study shows that ticket prices do not conform to the law of demand. According to the law of demand, increasing price leads to a decline in demand. However, in reality, the number of viewers went up along with ticket prices. The study found that demand for movies was correlated to income levels and leisure time. An increase in the number of leisure hours and income levels pushed up demand. Contrary to general belief, a growth in the availability of substitutes, such as professional sports(soccer and baseball), did not result in a fall in demand for movies. The audiences for both sports and movies grew simultaneously as the amount of leisure time increased. Contrary to the general expectations that more diversified genres of movies will draw larger audiences by satisfying different individual tastes, the diversification had little impact, but the number of movie screens was positively correlated with audience size. In sum, changes in ticket prices and the quantity of substitutes had little influence on demand in the movie industry. Rather, it was the supply side of the industry that induced demand.