We study how production and promotion budgets can play a strategic
role for movie studios to secure the most profitable release dates
by scaring off the competition. In a game-theoretic setting, where two
studios choose their budget before simultaneously setting the release
date of their movie, we prove that two equilibrium configurations are
possible: either releases are simultaneous (at the demand peak) or
they are staggered (one studio delays the release of its movie so as to
avoid any overlap with the other movie). Interestingly, in the latter
equilibrium, the first-mover secures its position by investing more in
production and promotion than the second-mover. We test the predictions
of our theoretical model on a dataset that comprises more than 1500 American movies released in ten countries from January 1, 2001 to December 31, 2013. Our empirical analysis largely confirms
that higher budgets allow studios to move release dates closer to the
demand peaks.