Providing the variety of products necessary to meet diverse customers’ needs often entails sacrifices in quality. For example, Netflix and other movie subscription services aiming to provide a large selection of movies have trouble providing new blockbusters or classics in their lineup. A similar tradeoff between variety and quality arises in movie exhibition. New digital technology enables the same movie to be shown across multiple screens at overlapping times. The quality tradeoff in this case is that exhibitors are considering shrinking screen/auditorium sizes to expand the number of screens and hence potential show times. We consider how consumers tradeoff variety vs. quality in this case of movies where the number of screens vs. the size of each involves a relatively simple tradeoff in how square footage is allocated.
