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Reviewing the Reviewers: The Impact of Individual Film Critics on Box Office Performance," Working Paper
, 2003
"... Abstract Critics and their opinions or critical reviews play a major role in many markets. Marketing research on how critics impact product performance has so far examined an aggregate critic effect. An obstacle in studies examining the relationship of aggregate critical opinion and product sales i ..."
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Abstract Critics and their opinions or critical reviews play a major role in many markets. Marketing research on how critics impact product performance has so far examined an aggregate critic effect. An obstacle in studies examining the relationship of aggregate critical opinion and product sales is the close association between the intrinsic quality of a product and the aggregate opinion regarding the product. Our analysis parses out these two effects, allowing us to distinguish individual critics who are simply good at identifying products with popular appeal from those who act as opinion leaders and engender early product sales. The role of critics is especially prominent in the film business, in which one finds multiple expert opinions about each movie and where critics' endorsements are used in advertising. In the context of the motion picture industry, our research investigates the impact of individual film critics on the market performance of movies, where specific key critics and reviewers may serve as market gatekeepers, and where various critics may have different types of impacts on product performance.
At the movies: The economics of exhibition contracts
- Economic Inquiry
, 2005
"... At the Movies: The Economics of Exhibition Contracts Abstract: We describe a real-world profit sharing contract- the movie exhibition contract-and consider alternative explanations for its use. Two explanations based on difficulties with forecasting fit the facts better than asymmetric information m ..."
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At the Movies: The Economics of Exhibition Contracts Abstract: We describe a real-world profit sharing contract- the movie exhibition contract-and consider alternative explanations for its use. Two explanations based on difficulties with forecasting fit the facts better than asymmetric information models. The first emphasizes two-sided risk aversion; the second emphasizes measurement costs. Transaction costs and long-term relationships also affect contractual practices. We use an original data set of all exhibition contracts involving thirteen theaters owned by a prominent St. Louis exhibitor over a two-year period to inform our theories and test hypotheses.
Production Technology and Trends in Movie Content: An Empirical Study
, 2010
"... analysis of trends in content of the Top 20 U.S. box office movies over the 1967-2008 period confirms that certain film type (or “genre”) labels such as “action, ” “animation ” and ‘scifi” have become more prevalent, while others such “drama, ” “romance ” and “musical ” have declined. We find that i ..."
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analysis of trends in content of the Top 20 U.S. box office movies over the 1967-2008 period confirms that certain film type (or “genre”) labels such as “action, ” “animation ” and ‘scifi” have become more prevalent, while others such “drama, ” “romance ” and “musical ” have declined. We find that increasingly prevalent film types tend with few exceptions to be relatively “technology intensive ” (as measured by the proportion of end credits in technology categories) while declining types tend to be non-technology intensive. These results support our main hypothesis that changes over time in movie content can be explained by advances in movie production technology, which favor profitability of certain types over others (eg, “action, ” over “drama”) by making them relatively more attractive to audiences and/or relatively cheap to produce. A correlation between movie type trends and their average “violence and gore ” ratings shows mixed results; some increasing types (eg, “action”) are violence-prone, others (eg, “family,”) are not.
Sex Doesn’t Sell—Nor Impress! Content, Box Office, Critics, and Awards in Mainstream Cinema Anemone Cerridwen
"... Although it is commonly assumed that “sex sells ” in mainstream cinema, recent research indicates a far more ambiguous relation between strong sexual content and financial performance. Moreover, such content may not be justified by either critical evaluations or movie awards. The literature even sug ..."
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Although it is commonly assumed that “sex sells ” in mainstream cinema, recent research indicates a far more ambiguous relation between strong sexual content and financial performance. Moreover, such content may not be justified by either critical evaluations or movie awards. The literature even suggests that cinematic sex may reflect long-term gender biases in the film industry. The current study investigates these issues by addressing two questions. First, what is the impact of sex and other graphic content on the central criteria of cinematic success? Second, to what extent is such content contingent on the proportion of women engaged in filmmaking, whether as producers, directors, writers, or actors? Analyses of 914 films released between 2001 and 2005 indicated that sex and nudity do not, on the average, boost box office performance, earn critical acclaim, or win major awards. Although female involvement does influence a film’s content, the only impact on the presence of sex and nudity is the proportion of women who make up the cast. Notwithstanding statistical complications, the best conclusion is that graphic sex neither sells nor impresses.
A mathematical model of cinematic box-office dynamics with geographic effects
, 2013
"... A new deterministic mathematical model for North American box-office film grosses is presented. The model may be simplified to a set of non-linear ordinary differential equations describing the evolution over time of the film's gross and exhibited sites. The novel feature of this work is the i ..."
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A new deterministic mathematical model for North American box-office film grosses is presented. The model may be simplified to a set of non-linear ordinary differential equations describing the evolution over time of the film's gross and exhibited sites. The novel feature of this work is the inclusion of geography-based effects to model moviegoer and exhibitor behaviour. Several key regimes are identified, depending on the popularity of the film, as well as how the screens are divided among geographical regions. Analytical results are presented for several relevant cases. Numerical simulations demonstrate close agreement between the model's predictions and actual box-office data.
Robust Analysis of Movie Earnings
, 2006
"... In this paper we apply recently developed nonparametric kernel regression estimation methods to quantify the conditional distribution of motion-picture earnings. The nonparametric data-driven approach allows the full range of relationships among variables to be captured, including nonlinearities tha ..."
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In this paper we apply recently developed nonparametric kernel regression estimation methods to quantify the conditional distribution of motion-picture earnings. The nonparametric data-driven approach allows the full range of relationships among variables to be captured, including nonlinearities that usually remain hidden in parametric models. The nonparametric approach does not assume a functional form, so specification error is not an issue. We find that the nonparametric regression model fits the data far better than the logarithmic regression model employed by most applied researchers, and we can reject the null hypothesis that the log-linear model is correctly specified. The nonparametric model yields substantially different estimates of the elasticity of box-office revenue with respect to production budgets and opening screens, and the model also has very good out-of-sample predictive ability, making it a potentially useful tool for studio management.
The Effects of Real Options, Returns-to-Scale, Structural Changes, and Levels of Aggregation on the Cost-Revenue Relationship
"... ABSTRACT. This paper extends the traditional, static cost and revenue model developed in manufacturing settings by studying four factors that moderate the cost-revenue relationship: real options, returns-to-scale, structural changes, and levels of aggregation. We use the motion picture industry as a ..."
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ABSTRACT. This paper extends the traditional, static cost and revenue model developed in manufacturing settings by studying four factors that moderate the cost-revenue relationship: real options, returns-to-scale, structural changes, and levels of aggregation. We use the motion picture industry as a research setting since it provides an interesting context for this type of research. For instance each product in the industry, a motion picture, is an experiential good with tractable costs and revenues. The critical costs to developing and marketing a successful motion picture are production and advertising costs. Using a sample of 1,695 motion pictures released between 1990 and 2003, we find that advertising costs – a result of the managerial exercise of real options – have a stronger association with revenues than do production costs – a first-stage investment. We also find that movies with larger costs have higher incremental revenues per cost, consistent with returns-to-scale. In addition, we discover that structural changes in the industry greatly affect the cost-revenue relationship during our observation period. Finally, we find that the cost-revenue relationship is stronger at a higher level of aggregation than at a lower level. In conclusion, our results indicate that the simple linear static model of cost-revenue relationship is limited. I.
