The Effect of Competition on Language Diversity in the Movie-Theatre Industry

Abstract

In this paper I investigate the effect of competition on Language diversity in a cultural market, the movies market, in which language is a relevant characteristic of the good. I analyse the case of the bilingual region of Catalonia to empirically test the effect of competition in two stages of the supply chain – the distribution and the exhibition – on the availability of films in the weaker language. I create a unique data set of all the screenings in the region over 10 months from different sources using advanced web-scraping techniques. I find that the concentration at the distribution level reduces the percentage of films in Catalan by 4.04 percentage points compared with the counterfactual of perfect competition. The effect of the concentration at the exhibition level is not significant. This implies that without such market failure, the total supply of films in Catalan would be 96% greater. I also look for heterogeneous effects disentangling two types of audiences: children-targeted films and adult-targeted films. I find that children have higher preference intensity over the language because the market is more responsive to them; the concentration at the exhibition level matters when it comes to this type of consumer.