In early 2013, the senior vice-president of customer strategies at Toronto-based Cineplex Inc. (Cineplex) was sitting in her office, working on the firm’s strategy. The firm’s chief executive officer had asked the VP to examine some strategic alternatives and present them at the upcoming meeting of the company’s board of directors. One of Cineplex’s major concerns stemmed from the seemingly inexorable continued reduction in theatrical-release windows — the period during which film distributors such as Cineplex had exclusive distribution rights. The VP and her team were considering two approaches: (1) extending Cineplex’s core business with premium offerings, and (2) vertically integrating into the digital download of movies. Cineplex dominated the theatrical exhibition market, and investors and analysts were starting to ask: “What’s next?”
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