Fast and frequent: Investigating box office revenues of motion picture sequels

This paper conceptualizes film sequels as brand extensions of a hedonic product and tests (1) how their box office revenues compare to that of their parent films, and (2) if the time interval between the sequel and the parent, and the number of intervening sequels, affect the revenues earned by the sequels at the box office. Using a random sample of 167 films released between 1991 and 1993, we find that sequels do not match the box office revenues of the parent films. However, they do better than their contemporaneous non-sequels, more so when they are released sooner (rather than later) after their parents, and when more (rather than fewer) intervening sequels come before them. Like other extensions of hedonic products, sequels exhibit satiation to the extent that their weekly box office collections fall faster over time relative to contemporaneous non-sequels. Managerial implications of the results are discussed.     

Should sequels differ from original movies in pre-launch advertising schedule? Lessons from consumers' online search activity

Sequels have become a profitable strategy in the U.S. motion picture industry because of their strong name recognition. However, while the established positioning of a sequel may help insulate it from competing firms' advertising messages, its familiarity may cause moviegoers to be more easily satiated with advertising from the sequel. Therefore, this study examines how sequels differ from original concept movies in terms of their ad effectiveness. We focus our analysis on pre-launch periods, given these periods' importance in shaping the financial outcomes of motion pictures. We consider the weekly online search volume of a movie as a measure of consumer interest in it, and thus as an intermediate response to pre-launch advertising. We then develop a model that assumes ad effectiveness can decline, due to copy and repetition wearout, and increase, due to forgetting, over time. We find that copy wearout is greater for original movies, while repetition wearout and forgetting are greater for sequels. These findings suggest that sequels should allocate more in early pre-launch periods and less immediately before release, relative to originals, to maximize pre-launch consumer interest.     

When should star power and eWOM be responsible for the box office performance? - An empirical study based on signaling theory

Information asymmetry universally exists in the market transactions. In the movie industry, consumers usually have limited access to quality information before they actually watch the movie, which increases the difficulty of purchase decision. Quality signaling is regarded as an effective solution for information asymmetry. Drawing upon the signaling theory, this study identifies the two types of signals, namely internal signals (i.e., actor/actress power and director power) and external signals (i.e., eWOM volume and eWOM valence). We further empirically investigate how the two types of signals influence the box office performance in different time periods of the movie's theatrical running (i.e., opening week and later-run weeks). The moderating effect of the signaling environment (i.e., number of ongoing movies in the same period) on the relationship between the signals and box office performance is also examined. Analyzing the data obtained from 80 Chinese movies, this study finds that all signals except eWOM valence positively influence box office performance. Internal signals are instrumental in enhancing box office performance during the opening week, whereas external signal (only eWOM volume) is more influential in boosting box office performance in the later-run weeks. Our results also reveal that the signaling environment can augment the positive effect of internal signals on box office performance. Based on these findings, both theoretical and managerial implications are discussed for researchers and practitioners in establishing ways to produce, distribute and promote movies.     

Administrative trade barrier: An empirical analysis of exporting Hollywood movies to China

Movies are among the US’s most successful exports, and China is by far the largest market. China welcomes high-quality US movies in order to grow its own theatrical market while also diligently protecting locally produced movies. China uses a movie import quota system to limit the number of foreign movies, half of which are delayed beyond the US release date by four or more weeks. We empirically study the Chinese government’s import decisions by developing a movie market demand model that integrates two models on concurrent and delayed releases where we consider release timing as an implicit trade barrier. We find that China tends to import US movies that are likely to expand the market demand but limits them from concurrent release when the potential cannibalization effect on local movies is high. Delayed releases of US movies are strongly associated with weaker box-office performance in China, making control of release schedule another vehicle that China leverages in import decisions.     

The dynamics of the Chinese film industry: factors affecting Chinese audiences’ intentions to see movies

This study attempts to understand the dynamics of the rapidly growing Chinese film industry by relying on a revised reason action model that uses a data-mining approach with aggregated data to examine the determinants of people’s intentions to see movies. The results show that attitude towards seeing movies indicated by online film ratings, collective norms represented by box-office performance and Academy Award win(s) significantly predict intentions to see movies. In addition, a movie’s year of release, star power, country of origin, adaptation from a novel and status as a sequel were significant predictors of aggregated intentions.     

How using versus showing interaction between characters and products boosts product placement effectiveness

Placements in movies increase brand awareness. Whether they are effective beyond memory, (e.g. in terms of brand attitudes) is a contested issue. This paper argues and shows that a specific type of placement, character–product interaction (CPI), is able to achieve effectiveness across measures of placement success. A comparison of three experimental versions of the same movie demonstrates the consistent advantage of CPI placements over static prominent placements. Additional exploratory analyses suggest that placement effectiveness may also depend on characteristics of the placed product.     

Movies

ABSTRACT

The movie has been with us in a variety of forms for over a century. During that time the movie as an artefact has played a number of roles from pure entertainment to political propaganda to a way in which we preserve or pass down memories. The movie moves. Getting its name from the innovation of having moving pictures, with the first film showing a horse galloping as the camera recorded a series of stills in quick succession; the movie is about physical motion, but also about emotional provocation and films have always been implicated in the market, in creating market demand and marketing ideology. So, movies show moving pictures and they serve to move us emotionally. This paper reflects on the development of the movie as a storytelling device, the role that they play in our lives, and why the movies can be viewed as a marketplace icon.     

突发公共事件对电影行业影响的量化研究

人工收集和整理2012—2018年在中国市场上映的首轮院线电影信息数据，构建电影需求的嵌套logit回归模型，以新冠肺炎疫情为准自然实验，来量化突发公共事件对电影行业复产复工的影响。结果显示：第一，关于上映时间选择，在恢复营业后，如果所有因为疫情尚未上映的电影选择顺延上映能有效避免过度竞争的局面。第二，关于上映节奏控制，控制好未定档电影的上映节奏，保持适当的竞争能促进经济效益提升。其中，从11月份开始以每周两部的频率上映未定档电影的经济效益最佳。第三，关于上映方式选择，与线下播放相比，疫情期间选择线上播放能及时收回成本并有利于经济收益最大化的实现。研究结论为电影行业制定复产复工策略提供依据，为未来应对突发公共卫生事件提供参考。     

Trade barriers and trade flows with product heterogeneity: An application to US motion picture exports

We extend Melitz (2003) to allow for both global and bilateral fixed export costs. If global (bilateral) export costs dominate, the average sales ratio (import sales per product variety/domestic sales per variety), decreases (increases) in variable (fixed) trade barriers, due to adjustment along the intensive (extensive) margin of trade. Using novel data on bilateral US movie exports we find that (i) variation in box-office revenues per movie is much larger than in the number of movies exported, and (ii) the average sales ratio decreases in geographic and linguistic distance. These findings suggest that global fixed export costs dominate.     

The Main Determinants of Bollywood Movie Box Office Sales

ABSTRACT

The Indian film industry produces more movies and sells more tickets than any other movie industry, with revenues second only to those of the U.S. film industry. We employ a two-by-two research design to investigate the main determinants of Indian movie sales overseas using two measures of movie performance for two countries of destination. By examining data and testing our hypotheses on a sample of 330 films, we identify effects related to brand, product, distribution, and consumers during opening week as well as total box office sales both individually and collectively. Results show that the groups of variables affecting Bollywood opening week sales for both countries of destination are identical in sequence and importance (distribution, product, brand, consumer variables). For total box office sales, they are similar, with the exception of the first group. For the United Kingdom, consumer-related variables predominate while distribution-related variables predominate in the United States, followed then for both countries by product- and brand-related variables. Results underscore previous findings for Hollywood movies, indicating that movie success factors are global rather than regional or national.     

Is self-knowledge the ultimate prize? A quantitative analysis of participation choice in online ideation crowdsourcing contests

Online crowdsourcing contests are a nascent but rapidly growing method among marketers and retailers to generate and solicit creative ideas. In two studies – a dynamic model with scraped data from a well-known crowdsourcing platform using Python (study 1) and a survey among real participants in online contests with conjoint analysis (study 2) – we explore how multiple design parameters influence participation in online contests. Our empirical results support the notion that both extrinsically (i.e., prize money) and intrinsically (i.e., feedback) motivating parameters can generate value for participants (i.e., expected utility). Comparatively, however, we find evidence that intrinsically motivating design parameters that provide self-relevant feedback (i.e., feedback from organizer) can be more impactful than extrinsically motivating design parameters (i.e., award size). We also show novel time-dependent effects: as a contest nears its end, important design parameters shift in their effects on participation rates— their role over time is non-monotonic. In particular, the effect of award size becomes non-significant, but feedback remains impactful. Our findings contribute to the crowdsourcing literature, especially regarding how self-knowledge (e.g., self-efficacy) affects utility and consumer co-creation through contest participation over time; the findings also can help retail managers and marketers enhance participation in idea contests.     

The Differential Effects of Online Word-of-Mouth and Critics' Reviews on Pre-release Movie Evaluation

In this paper, we examine the persuasive influences of online user comments (or word-of-mouth) and of the reviews by movie critics on moviegoers' evaluation of to-be-released movies. Two distinctive features of this study are: (1) moviegoers are considered to be heterogeneous in their movie going frequency and (2) word-of-mouth and critical reviews are concurrently available, and the views expressed in the two messages are in conflict. Using three experiments with natural stimuli, we find that the persuasive effect of online word-of-mouth is stronger on infrequent than on frequent moviegoers, especially when it is negative (Study 1). The effect of negative word-of-mouth on infrequent moviegoers is enduring even in the presence of positive reviews by movie critics (Study 2). The relative influence of word-of-mouth and critical reviews are asymmetric with infrequent moviegoers more influenced by word-of-mouth, while frequent moviegoers more influenced by the reviews (Study 3). We validate this source–segment alignment through secondary data analysis.     

The effectiveness of post-release movie advertising

Frequent new product introductions and short product life cycles lead to unusually high levels of advertising in the movie industry. We study the effectiveness of television advertisements aired after the theatrical opening of a motion picture (‘post-release advertising’). We estimate an instrumental variables, lagged effects model using a novel dataset constructed to obviate simultaneity concerns and temporal aggregation biases. We find that post-release movie advertising exhibits a high degree of heterogeneity across films, but generates substantial returns for some movies. Our findings suggest that studios may find it beneficial to experiment with higher post-release advertising budgets. Further, exhibitors may benefit from extended movie life cycles if they share post-release advertising responsibility with studios.     

Empirical generalizations of demand and supply dynamics for movies

High financial risks in production and marketing, the hedonic nature of products, and the global cultural relevance of movies have encouraged a substantial number of researchers to analyze the success drivers of movies. This research provides empirical generalizations in managing the supply and demand of motion pictures. Prior empirical research either ignored the endogeneity of box office and screen allocation or was based on selective samples, ignoring the large amount of smaller movies released to the market. Using two large and unique samples of all movies released in two major movie markets, the US (2000–2010; n = 2098) and Germany (2002–2010; n = 1360), we extend prior research and present empirical generalizations and new fields of research.     

“See Me or Not,I Am There”: Chinese White-Collar Moviegoers’ Interpretation of Product Placements in Chinese Commercial Movies

A phenomenology study reveals the lived meanings of product placement in Chinese commercial movies among Chinese urban, white-collar workers. In total, 50 in-depth interviews were conducted to collect data. Findings indicated the socially constructed meanings of product placement in the context of Chinese commercial movies are (1) referencing practices; (2) balancing activities; and (3) connecting product, movie, and audience.     

I Want You Back: The Interplay Between Legal Availability and Movie Piracy

Abstract

Although it is well known in the academic literature that anti-piracy measures can reduce the demand for pirated content, there are relatively few papers analyzing how legal availability impacts piracy. In this study, we answer two relevant research questions: (1) Does the availability of movies in legal digital channels reduce the demand for digital piracy? (2) Is the level of piracy prior to a movie’s release in a legal digital channel a reliable signal of legal demand after release? We answer these questions using a unique data set provided by a major motion picture studio. Our data contain 1520 catalog movies introduced to iTunes between April 2011 and April 2012. We find that iTunes availability leads to an 11.8% decrease in monthly piracy. We also find that pre-release piracy positively correlates with post-release electronic sell-through sales but not with video-on-demand sales.     

Timing Movie Release on the Internet in the Context of Piracy

Offering movies on the Internet is one way of combating the issue of online movie piracy, although the tradeoff is the cannibalization of the more revenue-generating channels. Given this tradeoff and the rather unique “staggered window distribution” mechanism followed by the movie industry, this article addresses the problem of when the studio owner should release the movie online to maximize the entire revenue stream of that movie. A general modeling approach that assumes an exponential demand function and fixed release times in the remaining channels is provided. Detailed illustration using three different movie types demonstrates that a high revenue-generating movie should be released online just prior to its home video release, while the online release of an average or below-average movie should coincide with their withdrawal from the theaters. Sensitivity analyses of the results are also displayed and give the circumstances under which a different online release time is warranted. The analysis suggests, among other things, that if a movie has an excellent opening strength and is able to sustain its revenues quite well, it would be more profitable to release the movie online a few weeks before it is withdrawn from the theaters. Additionally, the standard outcomes generated by the model are found to be sensitive to any online per-unit price change.     

The effects of eWOM volume and valence on product sales – an empirical examination of the movie industry

The present research examines how quantitative and qualitative aspects – volume and valence – of eWOM on various social media platforms in the movie industry, along with other forms of marketing communications (e.g. advertising expenditure), predict box office and DVD sales for pre- and post-periods of movie releases. The analysis of aggregated big data from multiple sources – 65,665,859 social media postings from blogs, forums, news, and Twitter, Nielsen’s ad expenditure data, and Rotten Tomatoes ratings for 170 movies—revealed that the explanatory power of the model for box office revenue and DVD sales mostly comes from the volume, rather than valence, of eWOM.     

Vertical Integration in the Japanese Movie Industry

This study examines vertical integration in the Japanese movie industry. I estimate an admission price equation, and a moviegoing demand equation derived from a discrete choice model of product differentiation. In order to overcome identification problems, this study exploits a panel structure dataset. My results show that the price of vertically integrated theaters tends to be higher than nonintegrated theaters, but it appears to be due to the inherent high quality of vertically integrated theaters. On the other hand, vertically integrated theaters are more popular among consumers and have higher attendance than nonintegrated theaters. Even after controlling the theater fixed effects, attendance for vertically integrated theaters is still larger than nonintegrated theaters. That is, the integration of producers/distributors and theaters is likely to be a source of economic efficiency. Policy implications are also proposed.     

Do I know you? How brand familiarity and perceived fit affect consumers’ attitudes towards brands placed in movies

The present study uses Associative Network Theory to construct a model that explains effects of brand placement in movies. Based on a field experiment (n?=?167), we investigate the effects of plot connection and prominence on brand attitude, as well as the mediating role of brand-movie fit and the moderating role of brand familiarity. Results show that more closely connecting a brand to the plot of a movie positively impacts brand attitude by increasing the perceived fit between the brand and the movie. Brand familiarity moderates the effect of the interaction between a placement’s plot connection and prominence on brand attitude. When brand familiarity is high, there is no significant effect of plot connection on brand attitude, nor is this effect moderated by the prominence of the placement. However, when brand familiarity is low, both prominently and subtly connecting the brand to the plot of the movie positively influences brand attitude. More importantly, the effect of plot connection is significantly stronger when an unfamiliar brand is prominently placed, than when it is subtly placed.